Article [Version of Record]
Is part ofCahier de recherche ; #2010-06
Publisher(s)Université de Montréal. Département de sciences économiques.
Local interactions refer to social and economic phenomena where individuals' choices are influenced by the choices of others who are "close" to them socially or geographically. This represents a fairly accurate picture of human experience. Furthermore, since local interactions imply particular forms of externalities, their presence typically suggests government action. I survey and discuss existing theoretical work on economies with local interactions and point to areas for further research.