Price expectations and cobwebs under uncertainty

Price expectations and cobwebs under uncertainty

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Article ID: iaor20031288
Country: Netherlands
Volume: 114
Issue: 1
Start Page Number: 167
End Page Number: 181
Publication Date: Aug 2002
Journal: Annals of Operations Research
Authors: ,
Keywords: economics
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 with either variable or constant stepsizes. Relying upon quite weak and natural assumptions we prove new convergence results.

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