Dynamic Systems of Social Interactions

We state conditions for existence and uniqueness of equilibria in dynamic microeconomic models with an infinity of locally and globally interacting agents. Agents face repeated discrete choice problems. Their utility depends on the actions of some designated neighbors and the average choice throughout the whole population. We show that the dynamics on the level of aggregate behavior can be described by a deterministic measure-valued integral equation. If some form of positive complementarities prevails we establish convergence results for aggregate activities. If the coupling between different agents is sufficiently weak, the dynamics is ergodic: macroscopic quantities converge to a unique limit independently of the initial conditions. We apply our convergence results to study a glass of population games with random matching. Preliminary Comments Wecome JEL classification: C63, D50, D71.