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Consumer memory and price fluctuations in commodity markets: An integrodifferential model

  • Jacques Bélair
  • Michael C. Mackey
Article

Abstract

A model for the dynamics of price adjustment in a single commodity market is developed. Nonlinearities in both supply and demand functions are considered explicitly, as are delays due to production lags and storage policies, to yield a nonlinear integrodifferential equation. Conditions for the local stability of the equilibrium price are derived in terms of the elasticities of supply and demand, the supply and demand relaxation times, and the equilibrium production-storage delay. The destabilizing effect of consumer memory on the equilibrium price is analyzed, and the ensuing Hopf bifurcations are described.

Key words

Commodity markets time delays stability Hopf bifurcation 

AMS (MOS) subject classifications

34K15 45J05 90A16 

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Copyright information

© Plenum Publishing Corporation 1989

Authors and Affiliations

  • Jacques Bélair
    • 1
  • Michael C. Mackey
    • 2
  1. 1.Département de Mathématiques et de Statistique and Centre de Recherches MathématiquesUniversité de MontréalMontréalCanada
  2. 2.Department of PhysiologyMcGill UniversityMontrealCanada

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