Homeostatic trajectories for a class of adapting economic systems
Aubin, Jean-Pierre; Day, Richard H. (1980), Homeostatic trajectories for a class of adapting economic systems, Journal of Economic Dynamics and Control, 2, p. 185-203. http://dx.doi.org/10.1016/0165-1889(80)90058-5
TypeArticle accepté pour publication ou publié
Journal nameJournal of Economic Dynamics and Control
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Day, Richard H.
Abstract (EN)The existence of homeostatic and monotone trajectories is established for an abstract class of adapting or behavioral economic systems. Features of adaptive or behavioral economics explicitly incorporated are: (1) change is only determined within the limits of certain sets and not exactly; (2) behavioral rules or standard operating policies that govern routine adaptation are distinguished from the modification of such policies; (3) the choice of such rules is governed by satisficing, that is, by determining ‘good-enough’ or improving choices rather than optimal or efficient choices; (4) ‘organizational slack’ may be an objective of the system as well as other criteria, by which is meant the maintenance of states well within the possible bounds of adaptation as a tactic for protection against environmental perturbations; (5) the choice of policy depends not only on the state of the system at any time but also upon the rate of change of an evaluation of the system. It is the latter fact that presents some difficulties not dealt with in previous literature on dynamical systems. An example involving resource allocation with externalities concludes the paper.
Subjects / Keywordsdynamical systems; adapting or behavioral economic systems
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