The study of Interaction begins where isolation ends: with multiple agents whose choices influence one another. Markets, contracts, negotiations, mechanisms, networks, and strategic environments all arise from this basic condition of interdependence. In this domain, outcomes cannot be understood by examining agents one at a time; the structure of influence among them must be treated directly.
Interaction matters because it captures the core economic question of coordination: how decentralized decision-makers shape each other’s opportunities, constraints, and information. Competition, cooperation, bargaining, price formation, incentive design, and equilibrium behavior all emerge here. This domain captures the logic of mutually responsive decision-making—how patterns of choice reinforce, undermine, amplify, or neutralize one another.
But not all multi-agent settings belong to Interaction. At some point, the determinants of outcomes shift away from cross-agent influence and toward system-level forces. To prevent the domain from swallowing everything, the boundary must be drawn sharply. That boundary is established by the Axiom that follows.
The Axiom of Economic Domains
Choice = zero interdependence; the outcome is fixed entirely by the structure of a single agent’s decision problem, with no variation arising from other decision-makers or system conditions.
Interaction = interdependence among agents; outcomes are shaped by cross-agent influence, and this domain ends the moment those cross-agent influences stop being the primary determinants of results.
Aggregation & Dynamics = interdependence with macro-states and system conditions; outcomes are shaped by system-level variables, and this domain begins the moment macro-states or propagation forces outweigh cross-agent influence.
Science Analysis Template
These are the structural patterns found across all Scientific Disciplines
1. What scale, mechanism, and assumptions define the domain of Interaction?
Interaction operates at the scale of multiple agents whose choices influence one another.
Its core mechanism is cross-agent influence—each agent’s feasible set, payoffs, or information is shaped by the actions or expectations of others.
The defining assumption is that interdependence is the primary determinant of outcomes.
This isolates the domain where economic results emerge from relations among decision-makers, not from isolated choice or system-level forces.
2. What conditions mark the exclusion zone for Interaction?
Interaction does not apply when:
- outcomes can be fully explained by a single-agent decision problem (→ Choice),
- system-level variables or macro conditions dominate the behavior of agents (→ Aggregation),
- cross-agent influence is weak enough that it is not the primary determinant,
- or the environment is best described by macro-state transitions rather than equilibrium among agents.
If the outcome no longer depends on the mutual responsiveness of agents, the problem is outside this domain.
3. How does the boundary transition away from Interaction occur?
The transition occurs when cross-agent influence stops being the main driver of results.
- If interdependence disappears or becomes irrelevant, the problem collapses back to Choice.
- If macro-states or system-level forces overpower agent-to-agent influence, the problem transfers to Aggregation & Dynamics.
Interaction ends precisely when the determinant of outcomes shifts from relations among agents to either individual structure or system structure.
4. What is the fundamental unit of analysis?
The unit of analysis is the multi-agent configuration, defined by:
- agents with interconnected choice sets,
- expectations that interact,
- incentives shaped by others’ behavior,
- constraints influenced by collective decisions,
- and an equilibrium condition that ensures mutual consistency.
In this domain, no agent can be analyzed in isolation.
5. What are the problem space, failure space, neighbor domains, and transition mechanism?
Problem space:
Environments where cross-agent influence determines outcomes—markets, games, bargaining, contracts, mechanisms, networks.
Failure space:
Any scenario where outcomes are driven instead by single-agent optimization (Choice) or by macro-states and propagation dynamics (Aggregation).
Neighbor domains:
- Choice (zero interdependence)
- Aggregation & Dynamics (macro-state dominance)
Transition mechanism:
A shift in the primary driver of variation:
- from cross-agent influence → to isolated decision structure (Choice)
- from cross-agent influence → to system-level variables or propagation forces (Aggregation)
