Introduction and Outline

Abstract

Economic theory deals primarily with the existence of equilibria, i.e. prices at which market clearing occurs. If such equilibrium prices exist, the question arises how they are attained. The problem of how economic agents can coordinate on such an equilibrium has received much less attention than the problem of existence, but nevertheless is highly important. Indeed, if this problem cannot be solved satisfactorily, economic predictions and comparative statics based upon equilibrium analysis are strongly hypothetical. In this monograph we discuss, in a number of different equilibrium models, some different adjustment processes and try to gain some insights into out-of-equilibrium dynamics and the question whether coordination on an equilibrium will in general be achieved or whether other dynamical phenomena may be encountered.