Book contents
- Frontmatter
- Contents
- About the authors
- Preface
- 1 Overview
- I The Post Walrasian macroeconomic vision
- II The underpinnings of Post Walrasian macroeconomics
- III Modeling a Post Walrasian economy
- 8 Heterogeneity, aggregation, and a meaningful macroeconomics
- 9 Walras, complexity, and Post Walrasian macroeconomics
- 10 Team coordination problems and macroeconomic models
- 11 “Competitive” market disequilibrium: a Post Walrasian analysis of investment
- IV New structuralist macroeconomics vs. Post Walrasian macroeconomics
- IV Appendix: Literature Survey
- Name Index
- Subject Index
10 - Team coordination problems and macroeconomic models
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- About the authors
- Preface
- 1 Overview
- I The Post Walrasian macroeconomic vision
- II The underpinnings of Post Walrasian macroeconomics
- III Modeling a Post Walrasian economy
- 8 Heterogeneity, aggregation, and a meaningful macroeconomics
- 9 Walras, complexity, and Post Walrasian macroeconomics
- 10 Team coordination problems and macroeconomic models
- 11 “Competitive” market disequilibrium: a Post Walrasian analysis of investment
- IV New structuralist macroeconomics vs. Post Walrasian macroeconomics
- IV Appendix: Literature Survey
- Name Index
- Subject Index
Summary
Introduction
The analytic foundations of the approach to macroeconomics described in the essays in this book lie in game theory, and, more specifically, in coordination problems that can exist even in an equilibrium setting. The existence of coordination problems provides a reasonable explanation of how macroeconomic problems can come into existence, even as all individuals are rational.
Coordination problems have received increasing attention of late in game theory and industrial organization, as well as in macroeconomics (see, for example, James Friedman (c. 1994)). These game-theoretic coordination developments may be particularly promising for providing a Post Walrasian approach to macroeconomics, and ultimately for elucidating the role of the macroeconomic context and institutions in determining microeconomic behavior.
In this paper I consider some simple examples of coordination failure, which make the basic concept clearer, and, hopefully, more intuitively satisfying. Specifically, I develop the concept of team coordination failure which lies at the heart of Colander's proposed Marshallian aggregate production function x = f(K, L, C), where C is the “new” variable reflecting degree of coordination in the economy. In doing so I further some arguments I made in Bryant (1983, 1987, 1992, 1994).
Leigh Tesfatsion provides a clear definition of the sort of coordination failure emphasized in this paper.
A coordination failure is said to occur when mutual gains, potentially attainable from a feasible all-around change in agent behavior (strategies) are not realized because no individual agent has an incentive to deviate from his [sic] current behavior. (1994)
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- Information
- Beyond MicrofoundationsPost Walrasian Economics, pp. 157 - 172Publisher: Cambridge University PressPrint publication year: 1996
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