J. Barkley Rosser Jr.
- Consistent expectations equilibria and complex dynamics in renewable resource markets
- Amsterdam / Rotterdam: Tinbergen Institute
- Tinbergen Institute Discussion Paper
- Volume | Edition (Serie)
- TI 1999-052/1
- Document type
- Working paper
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
Price fluctuations under adaptive learning in renewable resourcemarkets such as fisheries are examined. Optimal fishery managementwith logistic fish population growth implies a backward-bending,discounted supply curve for bioeconomic equilibrium sustained yield.Higher discount rates bend supply backwards more to generate multiplesteady state rational expectations equilibria. Under bounded ra-tionality adaptive learning of a linear forecasting rule generatessteady state, 2-cycle as well as chaotic consistent expectationsequilibria (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.
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