Various approaches used in Agent-based Computational Economics (ACE) to model endogenously determined interactions between agents are discussed. This concerns models in which agents not only (learn how to) play some (market or other) game, but also (learn to) decide with whom to do that (or not).

Global games of regime change - coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attacks it - have been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change. We extend the...

This chapter reviews recent experimental data testing game theory and behavioral models that have been inspired to explain those data. The models fall into four groups: in cognitive hierarchy or level- k models, the assumption of equilibrium is relaxed by assuming agents have beliefs about other...

Global games of regime change – coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attacks it – have been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change. We extend...

I study the effects of improved public information on equilibrium welfare and price dispersion, providing sufficient conditions for negative and positive effects. Public information affects welfare by reducing excessive (though rational) pessimism induced by sequential learning. Reduced...

Economic theory reduces the concept of rationality to internal consistency. The practice of economics, however, distinguishes between rational and irrational beliefs. There is therefore an interest in a theory of rational beliefs, and of the process by which beliefs are generated and justified....

While payoff-based learning models are almost exclusively devised for finite action games, where players can test every action, it is harder to design such learning processes for continuous games. We construct a stochastic learning rule, designed for games with continuous action sets, which...

Based on contribution patterns to parties in Germany and elsewhere, we suggest that European democracies should use a mixed system where private funding can play a larger role than public funding. In Germany the high level of public funding for parties can be reduced without expecting...

We consider an oligopolistic market game, in which the players are competing firm in the same market of a homogeneous consumption good. The consumer side is represented by a fixed demand function. The firms decide how much to produce of a perishable consumption good, and they decide upon a...

This paper describes a parametric approach to weakening rationality assumptions in game theory to fit empirical data better. The central features of game theory are: The concept of a game (players, strategies, information, timing, outcomes); strategic thinking; mutual consistency of beliefs and...