Endogenous Reactivity in a Dynamic Model of Consumer’s Choice

Figure 2

(a) Obtained with this set of parameters: 𝑚=4,𝑝=1.4,𝛾=0.9, and 𝛼=0.58, we have that the optimal choice 𝑥 is locally stable. (b) The preference for the good 𝑥 is marked (𝛼=0.91), the convergence to the optimal choice fails, and the consumption choices vary chaotically around it.

(a)

(b)