People may change their expectations as a function of the expectations of the others with whom they are in contact. A first approach to analysing this sort of problem is to define a suitable sort of static equilibrium which takes account of interaction. The latter may be local or global that is in the first case agents will be limited as to whom they have contact with, in the second agents may meet any other agent. Many of the static search equilibria la Diamond, for example, can be viewed in this way. In this sort of model, however, the notion of equilibrium remains a static fixed point.
Agents still react to an anonymous signal, the price distribution.
In addition the only stochastic element is the random matching of the agents. Yet much interaction in economic activity is stochastic in its nature. He showed that if the characteristics of agents are random but dependent on those of others, the effect of large numbers of agents is not enough to eliminate uncertainty at the aggregate level. Once again removing the independence of agents has important consequences for the way in which micro behaviour is related to aggregate pheomena. This is the case when individuals react to idiosynchratic, but independent, shocks whereas they also react to common exogenous shocks.