To study the equilibrium implications of strategic misoptimization, we introduce a model of costly control in continuum-player games. We find primitive conditions for binary-action and continuous-action games such that equilibria exist, are unique, are efficient, and feature monotone comparative...

The economy is heterogeneous, complex, dynamic, interdependent and interactive. This new market paradigm developed for analyzing economic behaviors gives a holistic analysis of the system by employing the Behavioral Systems Approach, Cobweb Theorem and Evolutionary Game Theory in obtaining the...

We develop a method of solving rational expectations models with dispersed information anddynamic strategic complementarities. In these types of models, the equilibrium outcome hingeson an infinite number of higher-order expectations which require an increasing number of statevariables to keep...

This chapter studies how incomplete information helps accommodate frictions in coordination, leading to novel insights on the joint determination of expectations and macroeconomic outcomes. We review and synthesize recent work on global games, beauty contests, and their applications. We...

This paper investigates who incomplete information impacts the response of prices to nominal shocks. Our baseline model is a variant of the Calvo model in which firms observe the underlying nominal shocks with noise. In this model, the response of prices is pinned down by three parameters: the...

This chapter studies how incomplete information helps accommodate frictions in coordination, leading to novel insights on the joint determination of expectations and macroeconomic outcomes. We review and synthesize recent work on global games, beauty contests, and their applications. We...

This paper surveys the research in the past decade on imperfect information models of aggregate supply and the Phillips curve. This new work has emphasized that information is dispersed and disseminates slowly across a population of agents who strategically interact in their use of information....

This paper studies a dispersed information economy in which agents can exert costly attention to learn about an unknown aggregate state of the economy. Under certain conditions, attention and four measures of uncertainty are countercyclical: Agents pay more attention when they expect the economy...

Standard macro theories reflect a choice-theoretic orientation wherein aggregate variables are treated as acting directly on one another. Macro phenomena are thus reduced to the same order of simplicity as micro phenomena; macro variables differ from micro variables only by their larger size. In...

The logic of economic inquiry requires two distinct research programs. One program treats economic life in terms of invariant formal categories across time and place. The other program treats the continual of novelty and turbulence through time through human interaction. These programs are not...