The cobweb model where firms choose between rational and naive forecasting strategies has a 2-cycle when the slope of supply is greater than the slope of demand for a number of different dynamics describing the evolution of strategy choices. This paper proves that the 2-cycle is exponentially...

The new learning dynamic of Brown, von Neuman and Nash (1950) is introduced to macroeconomic dynamics via the cobweb model with rational and naive forecasting strategies. This dynamic has appealing properties such as positive correlation and inventiveness. There is persistent heterogeneity in...