‘X-efficacy’ vs X-efficiency
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‘X-efficacy’ vs X-efficiency book
By 1979, Leibenstein was explaining general X-efficiency as a clear example of what he proposed as micro-micro theory, and suggesting that it represented a clear sense of a new research frontier in economics, the first since the macroeconomic revolution of the 1930s. With hindsight, there was actually a revolution in microeconomics going on at the time, but it was in game theory (which is also a
micro-micro theory and something for which Leibenstein was an early advocate, especially in relation to ‘effort games’). Leibenstein’s focus on the behavioral realities of activity and coordination was subsequently relegated en passant, and a renewed push on coordination anomalies and principal-agent problems entered the space that Leibenstein had helped to open. By the late 1980s there was little further reference to Leibenstein (although see Frantz, 1988), and his ‘Carnegie school’ exemplars of micro-micro (Simon, Cohen, Cyert, Day, Elliason, Nelson and Winter) had variously transmuted into Schumpeterian evolutionary economists. And with the rise of non-linear dynamics in the late 1980s and complexity theory in the 1990s, he soon became better known for his observations of feedback (bandwagon) effects in consumption dynamics (Leibenstein, 1950).