Chapter

The Market and the Firm

Mario Amendola and Jean‐Luc Gaffard

in Out of Equilibrium

Published in print July 1998 | ISBN: 9780198293804
Published online November 2003 | e-ISBN: 9780191595851 | DOI: http://dx.doi.org/10.1093/0198293801.003.0005
 The Market and the Firm

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Complementarity problems, coordination issues, and organizational aspects, essentially characterize the processes of change. It is therefore paramount to understand—how they arise and how they interact sequentially out of equilibrium—to sketch out the guiding lines of a strategy designed to secure the viability of the economy. The interaction of the different firms involved in the process of change contributes heavily to determine the path actually followed by the economy. The market is called to secure the right kind of interaction, the coordination required for viability. A sequential strategy, by establishing new and changing relations with the environment in order to deal with the constraints arising along the way, appears as the best tool for acquiring information and knowledge, and thus to assure the required coordination.

Keywords: Bounded behaviours; Organizational design; sequential strategy; Transaction costs

Chapter.  10435 words. 

Subjects: Macroeconomics and Monetary Economics

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