ABSTRACT
Economic theorists are more than a little testy these days. Their allegiance to the Walrasian programme has been a major washout, although the news may not have filtered down to the average economist in the trenches yet. Many economists of the post-war generation placed their bets with game theory as a viable alternative; and while game theory has provided a quick publication route, the intellectual climate there has proven equally stormy. The spectacle of all those rigorous mathematicians wrangling endlessly over philosophical issues such as the nature of rationality, the meaning of common knowledge, the possibility of induction and the like, has begun to seep into the consciousness of lesser folk and bring to mind an earlier débâcle. The inability to agree on a solution concept also signals that something is rotten in the land of von Neumann. These disputes broke out into the open at the 1994 American Economic Association meetings, where a few sessions found advocates of game theory and the Walrasian approach coming into conflict with partisans of a third alternative (sometimes called ‘the complexity approach’), often associated with the Santa Fe Institute.
