Economies with Interacting Agents

This paper discusses economic models in which agents interact directly with each other rather than through the price system as in the standard general equilibrium model. It is suggested that the relationship between micro and macro behavior is very different than that in the standard model and that the aggregate phenomena that can arise are rich. The models considered include ones with global interaction in which all agents can interact with each other and ones in which agents can only interact with their immediate neighbors. Both static and dynamic models are considered and the latter includes the class of evolutionary economic models.