A model of organization is proposed in which factors for increasing returns to size and factors for decreasing returns to size are in co nflict. The former effect reflects standard efficiency gains associat ed with economies of scale. The latter arises from inefficiencies (which are modeled in a...

This paper provides a survey of results concerning "eductive stability" of equilibrium in an abstract 2-period exchange economy. "Eductive stability" is based on the Common Knowledge considerations underlying the work reported in the book "Assessing rational expectations: "eductive" stability in...

The paper considers a model with two goods: a private good and an "environmental" good. The analysis has two basic ingredients : the two goods are imperfectly substitutable and the long run characteristics of substitution are uncertain. An ecological discount rate is defined. It is argued that a...

We examine local strong rationality (LSR) in multivariate models with both forward-looking expectations and predetermined variables. Given hypothetical common knowledge restrictions that the dynamics will be close to those of a specified minimal state variable solution, we obtain eductive...