Preferable disequilibrium in a nonlinear cobweb economy (Q1808167)

The paper deals with a piecewise linear mapping on interval as a cobweb model of market dynamics. It is well known that such mappings may produce chaotic dynamics. The purpose is to demonstrate that chaotic fluctuations are sometimes preferable to competitive equilibrium. The author shows with the aid of numerical examples that the long-run average profit and utility obtained in perpetual disequilibrium can be greater than the profit and utility at equilibrium. Piecewise linear Markov mappings are used. A mapping is Markov if the domain is divided into disjoint subintervals and the restriction of the mapping to one subinterval is a homeomorphism onto some subintervals. One-kinked and two-kinked ergodic dynamics are investigated.