Endogenous Reactivity in a Dynamic Model of Consumer’s Choice

Figure 4

(a) obtained with this set of parameters: 𝑚=7,𝑝=1.4,𝛼=0.1,𝛾=1.276 the optimal choice 𝑥 is unstable and the dynamics are chaotic. (b) the reactivity parameter γ is endogenous and there is convergence both starting from an initial condition lower (𝑥^𝑎₀) and higher than the optimal choice (𝑥^𝑏₀).

(a)

(b)