Stability analysis of asset flow differential equations (Q617013): Difference between revisions

The author finds that there is a line of fixed points (equilibrium points) for the asset flow differential equations (AFDEs) in the paper of \textit{G. Caginalp} and \textit{D. Balenovich} [Philos. Trans. R. Soc. Lond., Ser. A, Math. Phys. Eng. Sci. 357, No.~1758, 2119--2133 (1999; Zbl 0935.91011)] and examines different qualitative features depending on market price, fundamental value and the coefficient of value-based sentiment. The existence of the infinitely many fixed points may suggest that this version of AFDEs is a structurally unstable system mathematically by using an extension of the Peixoto Theorem for two-dimensional manifolds to a four-dimensional manifold. Moreover, the Author finds that there is no critical point if the chronic discount over the past few weeks is nonzero for the version of AFDEs in the paper of \textit{A. Duran} and \textit{G. Caginalp} [Optim. Methods Softw. 23, No.~4, 551--574 (2008; Zbl 1151.91716)].