Rothschild, and three most helpful referees. Very special thanks for many years of helpful insights are due to Richard Day and Luigi Ermini. Hamlet: “What a piece of work is a man! how noble in reason! how infinite in faculties!”

Economists have long been ambivalent about whether the discipline should focus on the analysis of markets or should be concerned with social interactions more generally. Recently the discipline has sought to broaden its scope while maintaining the rigor of modern economic analysis. Major theoretical developments in game theory, the economics of the family, and endogenous growth theory have taken place. Economists have also performed new empirical research on social interactions, but the empirical literature does not show progress comparable to that achieved in economic theory. This paper examines why and discusses how economists might make sustained contributions to the empirical analysis of social interactions.

We examine the force of three types of behavioral dynamics in quantity-setting triopoly experiments: (1) mimicking the successful firm, (2) rules based on following the exemplary firm, and (3) rules based on belief learning. Theoretically, these three types of rules lead to the competitive, the collusive, and the CournotNash outcome, respectively. In the experiment we employ three information treatments, each of which is hypothesized to be conducive to the force of one of the three dynamic rules. To a large extent, the results are consistent with the hypothesized relationships between treatments, behavioral rules, and outcomes.

This paper presents experimental results from an analysis of two similar games, the repeated ultimatum game and the repeated best-shot game. The experiment examines whether the amount and content of information given to players affects the evolution of play in the two games. In one experimental treatment, subjects in both games observe not only their own actions and payoffs, but also those of one randomly chosen pair of players in the just-completed round of play. In the other treatment, subjects in both games observe only their own actions and payoffs. We present evidence suggesting that observation of other players ' actions and payoffs may a ect the evolution of play relative to the case of no observation.

Theories of the fertility transition now routinely reserve a place for diffusion effects (Mason 1997). Such effects arise because individuals are themselves members of larger groups. The information that is held by group members, the choices they make, and the outcomes that flow from them—all these can exert a powerful influence on individual incentives to innovate. In settings in which fertility has been high, such innovation may take the form of modern contraceptive adoption and fertility limitation. Under certain conditions, the individual-to-group connections establish pathways along which such innovative demographic behavior can diffuse. What empirical evidence supports the view that diffusion matters to fertility decline? As we will show, proponents can find in the fertility literature numerous hints and indirect suggestions of a role for diffusion. Until very recently, however, the available data were insufficient to withstand rigorous scientific scrutiny. Over the past several years, several groups of researchers have initiated longitudinal studies that promise to better illuminate the contribution of diffusion. 1 With the study of diffusion effects about to enter a new phase, this is an appropriate moment to take stock of what has been learned and to describe the new research directions that lie ahead. Our aim in this paper is threefold: to assemble the disparate concepts of the diffusion perspective into a coherent whole; to

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A large and growing literature on reputation in games builds on the insight that the possibility of one or more players being boundedly rational can have significant effects on equilibrium behavior. This literature leaves unexplained the presence of behavioral players in the first place, as well as the particular forms of irrationality assumed and the population shares of the various types. In this paper we endogenize departures from rationality on the basis of an evolutionary stability criterion, under the assumption that rational players incur a cost which reflects the greater sophistication of their behavior.

I present a formal model of symmetric n-firm Cournot oligopoly with a heterogeneous population of profit optimizers and imitators...

This paper explores the impact of memory in Cournot oligopolies where firms learn through imitation of success (as suggested in Alchian (1950) and modeled in Vega-Redondo (1997)). As long as memory includes at least one period, the long-run outcomes correspond to all the quantities in the interval between the Cournot quantity and the Walras one. There is a conceptual tension between the evolutionary stability associated to the walrasian outcome, which relies on inter-firm comparisons of simultaneous profits, and the stability of the Cournot-Nash equilibrium,

We apply the stochastic evolutionary approach of equilibrium selection to macroe-conomic models in which a complementarity at the macro level is present. These models often exhibit multiple Pareto-ranked Nash equilibria, and the best response-correspondence of an individual increases with a measure of the aggregate state of the economy. Our main theoretical result shows how the equilibrium that is singled out by the evolutionary dynamics is directly related to the underlying externality that creates the multiplicity problem in the underlying macroeconomic stage game. We also provide clarifying examples from the macroeconomic literature.