HOW TO CONTROL A CHAOTIC ECONOMY

An economic system which exhibits chaotic behaviour has been stabilize d on various periodic orbits by use of the Ott-Grebogi-Yorke method. T his procedure has been recently applied to controlling chaotic phenome na in physical, chemical and biological systems. We adopt this method successfully for Feichtinger's generic model of two competing firms wi th asymmetrical investment strategies. We show that the application of this control method to the particular economic process considered bri ngs a substantial advantage: one can easily switch from a chaotic traj ectory to a regular periodic orbit and simultaneously improve the syst em's economic properties. Numerical simulations are presented in order to illustrate the effectiveness of the whole procedure.