Two destabilizing strategies may be jointly stabilizing

The paper contributes to the literature on learning dynamics with heterogen eous agents, demonstrating that heterogeneity as such may be conducive to s tability. The point is made in the framework of the cobweb model, where two different forecast procedures are considered. Either one destabilizes the price dynamics when it is uniformly adopted by all firms, or the price equi librium becomes locally stable if firms are heterogeneous and the two rules are suitably mixed within the population. It is also indicated that such a stabilizing composition is endogenously brought about by an adjustment pro cess in which the population shares evolve under evolutionary pressure.