Abstract
This paper examines an overlapping generations version of the Shapley-Shubik market game. We show existence of equilibria for the simple one commodity model and analyze the dynamics of the equilibrium trajectories generated in the model. Because of the non-linearities generated by strategic interaction of agents in the model, we find that complex and chaotic equilibrium dynamics are possible in this model for a much broader range of preferences than those for which Grandmont (Econometrica 53, No. 5 (1995), 995-1045) found complicated dynamics in the perfectly competitive version of this model. These results, then, provide an alternative to the usual technology-based explanation for the historical fact that business cycles became an important economic phenomenon only with the onset of industrialization. Journal of Economic Literature Classification Numbers: C72, C73, D51, L16.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 97-125 |
| Number of pages | 29 |
| Journal | Journal of Economic Theory |
| Volume | 81 |
| Issue number | 1 |
| DOIs | |
| State | Published - Jan 1 1998 |
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ASJC Scopus subject areas
- Economics and Econometrics
Cite this
Endogenous strategic business cycles. / Goenka, Aditya; Kelly, David; Spear, Stephen E.
In: Journal of Economic Theory, Vol. 81, No. 1, 01.01.1998, p. 97-125.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Endogenous strategic business cycles
AU - Goenka, Aditya
AU - Kelly, David
AU - Spear, Stephen E.
PY - 1998/1/1
Y1 - 1998/1/1
N2 - This paper examines an overlapping generations version of the Shapley-Shubik market game. We show existence of equilibria for the simple one commodity model and analyze the dynamics of the equilibrium trajectories generated in the model. Because of the non-linearities generated by strategic interaction of agents in the model, we find that complex and chaotic equilibrium dynamics are possible in this model for a much broader range of preferences than those for which Grandmont (Econometrica 53, No. 5 (1995), 995-1045) found complicated dynamics in the perfectly competitive version of this model. These results, then, provide an alternative to the usual technology-based explanation for the historical fact that business cycles became an important economic phenomenon only with the onset of industrialization. Journal of Economic Literature Classification Numbers: C72, C73, D51, L16.
AB - This paper examines an overlapping generations version of the Shapley-Shubik market game. We show existence of equilibria for the simple one commodity model and analyze the dynamics of the equilibrium trajectories generated in the model. Because of the non-linearities generated by strategic interaction of agents in the model, we find that complex and chaotic equilibrium dynamics are possible in this model for a much broader range of preferences than those for which Grandmont (Econometrica 53, No. 5 (1995), 995-1045) found complicated dynamics in the perfectly competitive version of this model. These results, then, provide an alternative to the usual technology-based explanation for the historical fact that business cycles became an important economic phenomenon only with the onset of industrialization. Journal of Economic Literature Classification Numbers: C72, C73, D51, L16.
UR - http://www.scopus.com/inward/record.url?scp=0001871137&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0001871137&partnerID=8YFLogxK
U2 - 10.1006/jeth.1997.2380
DO - 10.1006/jeth.1997.2380
M3 - Article
AN - SCOPUS:0001871137
VL - 81
SP - 97
EP - 125
JO - Journal of Economic Theory
JF - Journal of Economic Theory
SN - 0022-0531
IS - 1
ER -