# Market impact function

I have the following Dynamical system for market impact function

$$p_{t+1}-p_t=a(d_t-s_t)$$

$$s_{t+1}-s_t=bp_ts_t-cs_t$$ $$d_t=y-rp_t$$

where $$s_t$$ is quantity supplied, $$d_t$$ is quantity demanded, $$p_t$$ is market price, $$a,b,c,y,r>0$$ are fixed.

What is the name of the model? And most importantly,how can I interpret these equations?

Thanks

The first equation gives you the evolution of prices. It says that there will be inflation if there is excess demand $$d_t>s_t$$ and deflation if there is excess supply (that’s why the first equation has ($$d_t-s_t$$).
The third equation is a demand function. The $$y$$ is most likely income - hence higher income the higher demand, and then the demand is decreasing in price