Article ID: | iaor200953 |
Country: | Germany |
Volume: | 9 |
Issue: | 1/2 |
Start Page Number: | 51 |
End Page Number: | 70 |
Publication Date: | Jul 2001 |
Journal: | Central European Journal of Operations Research |
Authors: | Matsumoto Akio |
This study discusses a possibility that chaotic fluctuations might be preferable to a steady state. For this purpose, it uses a simple macro disequilibrium model in which inventory can be chaotically fluctuated. In such a model, the profit of an inventory-holding firm fluctuates accordingly. This raises the question of its average profit in the long-run. This study analytically and numerically demonstrates that the long-run average profit of a chaotic trajectory can be greater than the profit resulting in the stationary state.