Price Expectations, Cobwebs and Stability
Abstract
There is given a market for several perishable goods, supplied under technological randomness and price uncertainty. We study whether and how producers eventually may learn rational price expectations. The model is of cobweb type. Its dynamics fit standard forms of stochastic approximation. Relying upon quite weak and natural assumptions we prove new convergence results.
KEYWORDS: cobweb models, adaptive learning, rational expectations, stochastic approximation, fixed point, stability.
KEYWORDS: cobweb models, adaptive learning, rational expectations, stochastic approximation, fixed point, stability.