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AbstractThis paper examines the role of heterogeneous beliefs in a cobweb model. For that purpose, we study the price dynamics resulting from the interaction of agents whose price expectations differ. We proceed in two stages. First, two groups of agents are distinguished. They are either fundamentalists, or chartists. The latter specify the expected price from an adaptive process, the former consider the expected price as the steady state price, they then have a “rational behaviour”. Second, we enrich the model by allowing that agents may choose between rational expectations and a simple adaptive process. Our work shows how market stability alters as the proportion of fundamentalists relative to chartists varies. We demonstrate twofold. The market behaviour of fundamentalists compared to chartists promotes market stability. Market stability may emerge depending on the specification of the expectations and the intensity of switching between the two behaviours.