The knowledge constraints and transactions costs imposed by geographical distance, network connections and time conspire to justify local behavior as a good approximation for global rationality. We consider a class of games to illustrate this relationship and raise some questions as to what constitutes a satisfactory solution concept.
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Find related papers by JEL classification: D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other M39 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Other C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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Stephen Morrs, .
""Contagion'',"
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97-01, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
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