Complementarities and Games: New Developments

C are pervasive in economics, ranging from coordination problems in macroeconomics and finance to pricing and product selection issues in industrial organization. At the heart of complementarity is the notion, due to Edgeworth, that the marginal value of an action or variable increases in the level of another action or variable. Complementarities have been a recurrent and somewhat contentious topic of study for economic analysis. Indeed, while Paul A. Samuelson (1947) in his Foundations stated that “In my opinion, the problem of complementarity has received more attention than is merited by its intrinsic importance” (at the start of the section on complementarity, p. 183, 1979 edition), he later corrected himself in this very journal in 1974, on the occasion of the fortieth anniversary of the Hicks–Allen revolution in demand theory, when he stated at the very beginning of his paper that