Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2001-02-06
Number: 01-013/1
Author-Name: Cars H. Hommes
Author-Email: c.h.hommes@uva.nl
Author-Workplace-Name: University of Amsterdam
Author-Name: J. Barkley Rosser
Author-Workplace-Name: Jr., James Madison University
Title: Consistent Expectations Equilibria and Complex Dynamics in Renewable Resource Markets
Abstract: Price fluctuations under adaptive learning in renewable resourcemarkets such as fisheries are examined. Optimal fisherymanagement with logistic fish pOpUlation growth implies a backward-bending, discounted supply curve for bioeconomicequilibrium sustained yield. Higher discount rates bend supplybackwards more to generate multiple steady state rationalexpectations equilibria. Under bounded rationality adaptive learningof a linear forecasting rule generates steady state, 2-cycle as weIl as chaotic consistent expectations equilibria (CEE),which are self-fulfilling in sample average andautocorrelations. The possibility of "learning to believe in chaos"is robust and even enhanced by dynamic noise.
File-Url: https://papers.tinbergen.nl/01013.pdf
File-Format: application/pdf
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Handle: RePEc:tin:wpaper:20010013