This book studies the implications of macroeconomic complementarities for aggregate behavior. The presentation is intended to introduce Ph.D. students into this sub-field of macroeconomics and to serve as a reference for more advanced scholars. The initial sections of the book cover the basic framework of complementarities and provide a discussion of the experimental evidence on the outcome of coordination games. The subsequent sections of the book investigate applications of these ideas for macroeconomics. The topics Professor Cooper explores include: economies with production complementarities, search models, imperfectly competitive product markets, models of timing and delay and the role of government in resolving and creating coordination problems.
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action activity aggregate analysis arise assume assumption best response capital chapter choice choose commitment competition complementarity condition consider consistency consumer consumption Cooper coordination game cost create cycle decision delay demand denoted depends determined differences discussion dominant dominant strategy dynamic earlier economy effects effort elements employment example exist expected fact Figure firms fixed function Further gain given higher implies important incentive income increasing individual inflation influence interaction interest investment labor lead less macroeconomic move multiple multiple equilibria Nash equilibrium nature Note observed optimal outcome output particular payoff period play player positive possibility preferences present private agents probability problem production profits receives relative representative result returns sector selection shocks solution strategic complementarity strategy structure supermodular games suppose symmetric synchronization tion trading utility variable