ABSTRACT
In most economists' view, aggregate economic activity results from the interactions of many small economic agents pursuing diverse interests. To some, this statement is a normative proposition. This chapter discusses that research which has attended to the dynamics of systems continually subject to random perturbations, or noise. It presents a "local interaction" model; that each player directly competes with only a few players in the population. Other topics have also been studied, including local interaction with endogenous partner choice, forward-looking behavior, and variable and endogenous population size. Both the short-run and the long-run behavior of population models are important objects of study. Long-run behavior is characterized by the process' ergodic distribution. When the population is large, the short-run dynamics are nearly deterministic, and can be described by the differential equation which describes the evolution of mean behavior.
