However, after Robert Lucas, Jr.'s critique of econometric policy evaluation spurred the development of microfoundations for macroeconomics, the notion of the representative agent became more prominent and more controversial.
For example, a macroeconomist might analyze the impact of a rise of oil prices on a typical 'representative' consumer; but some analyses of auctions involve heterogeneous agent models because competing potential buyers can value the good differently.
Therefore, almost all the earliest general equilibrium macroeconomic models were simplified by assuming that consumers and/or firms could be described as a representative agent.
Because representative agent models simply ignore valid aggregation concerns, they sometimes commit the so-called fallacy of composition.
In his view, the representative agent "deserves a decent burial, as an approach to economic analysis that is not only primitive, but fundamentally erroneous."
Another alternative is to construct dynamic stochastic general equilibrium (DSGE) models with heterogeneous agents, which is difficult, but is becoming more common (Ríos-Rull, 1995; Heathcote, Storesletten, and Violante 2009; Canova 2007 section 2.1.2).
Chang, Kim, and Schorfheide (2011) make a point similar to that of Kirman, in the context of a DSGE model where agents are heterogeneous because of uninsured labor income risk.