CentER

Edward Droste

Abstract:

Various economic and social environments feature repeated interaction of decision-makers. Firms compete for market shares continually, politicians enter into debates almost every day, and friends communicate regularly. When decision-makers accumulate experience and collect new information each time interaction takes place, they will adapt their behavior over time. This thesis analyzes dynamical systems that provide insights into the evolution of the decision-makers' behavior. The three main topics are an adjustment process leading to best-reply matching behavior, network formation in communication and coordination problems, and the interaction between behavioral routines in a Cournot model.