Cobweb Equation
The simple first-order difference equation
| y_(t+1)-Ay_t=B, |
(1)
|
where
A = [画像:-(m_s)/(m_d)]
(2)
B = [画像:(b_d-b_s)/(m_d)]
(3)
and
D_t = -m_dp_t+b_d
(4)
S_(t+1) = m_sp_t+b_s
(5)
are the price-demand and price-supply curves, where -m_d and b_d represent the slope and D-intercept, respectively, for the demand curve, and m_s and b_s represent the corresponding constants for the supply curve (Ezekiel 1938, Goldberg 1986).
A class of behaviors related to this equation is known as "Cobweb phenomena" in economics.
See also
Difference EquationThis entry contributed by Ronald M. Aarts
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References
Ezekiel, M. "The Cobweb Theorem." Quart. J. Econ. 52, 255-280, 1938.Goldberg, S. Introduction to Difference Equations, with Illustrative Examples from Economics, Psychology, and Sociology. New York: Dover, 1986.Referenced on Wolfram|Alpha
Cobweb EquationCite this as:
Aarts, Ronald M. "Cobweb Equation." From MathWorld--A Wolfram Resource, created by Eric W. Weisstein. https://mathworld.wolfram.com/CobwebEquation.html