American Economic Review Vol. 92 No. 2 2002
Explaining Diversity: Symmetry-Breaking in Complementarity Games
Abstract
Strategic complementarity games have found applications in many fields, including macroeconomics, development, and labor economics.' They provide a useful framework within which to address questions like: What generates the disparity across regions and countries? Why are there booms and recessions? and What causes gender and race discrimination in the labor market? In short, they help us think about the diversity and variations across space, time, and groups. The literature on complementarity games has emphasized coordination failures as the key notion to understand these questions. This paper argues that such emphasis is misplaced; the key to understand the diversity is symmetrybreaking. The notion of coordination failures is not only irrelevant, but also misleading when thinking about the diversity.
- DOI
- 10.1257/000282802320189339
- Volume
- 92
- Issue
- 2
- Pages
- 241-246
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref