We develop a simple model to study the coevolution of interaction structures and action choices in prisoners' dilemma games. Agents are boundedly rational and choose both actions and interaction partners via payoff-biased imitation. The dynamics of imitation and exclusion yields polymorphic...

We present and analyze a local interaction model where agents play a bilateral prisoner's dilemma game with their neighbors. Agents learn about behavior through payoff-biased imitation of their interaction neighbors (and possibly some agents beyond this set). We find that the [Eshel, I., L....

In this paper we propose a three–level computational equilibrium model that allows to analyze the impact of the regulatory environment on transmission line expansion (by the regulator) and investment in generation capacity (by private firms) in liberalized electricity markets. The basic...

In liberalized electricity markets strategic firms compete in an environment characterized by fluctuating demand and non-storability of electricity. While spot market design under those conditions by now is well understood, a rigorous analysis of investment incentives is still missing. Existing...