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Hommes, Cars H.
Rosser, J. Barkley
Year of Publication: 
Series/Report no.: 
Tinbergen Institute Discussion Paper 01-013/1
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 chaosis robust and even enhanced by dynamic noise.
Document Type: 
Working Paper

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