In a population with a local interaction structure, where individuals interact with their neighbors and learning is by way of imitating a successful neighbor, cooperation is shown to be a stable strategy that cannot easily be eliminated from the population.

The authors study a population of agents, each of whom can be an altruist or an egoist. Altruism is a strictly dominated strategy. Agents choose their actions by imitating others who earn high payoffs. Interactions between agents are local, so that each agent affects, and is affected by, only...

We consider a market with "red" and "green" workers, where labels are payoff irrelevant. Workers may acquire skills. Skilled workers search for vacancies, while firms search for workers. A unique symmetric equilibrium exists in which color is irrelevant. There are also asymmetric equilibria in...

In the economic modeling of bargaining, outside options have often been naively treated by taking them as the disagreement payoffs in an application of the Nash bargaining solution. This paper contrasts this method of predicting outcomes with that obtained from an analysis of optimal strategic...

Models of (horizontal) product differentiation generally admit many equilibria. These include concentrated equilibria, in which few firms each offer many products, and fragmented equilibria, in which many firms each offer one product. Since these outcomes depend in a delicate way on features of...

Where should experimental economics go next? This paper uses the literature on inequity aversion as a case study in suggesting that we could profit from tightening up our act.