Interactive behavior modeling of multiple agents is an essential challenge in simulation, especially in scenarios when agents need to avoid collisions and cooperate at the same time. Humans can interact with others without explicit communication and navigate in scenarios when cooperation is required. In this work, we aim to model human interactions in this realistic setting, where each agent acts based on its observation and does not communicate with others. We propose a framework based on distributed potential games, where each agent imagines a cooperative game with other agents and solves the game using its estimation of their behavior. We utilize iLQR to solve the games and closed-loop simulate the interactions. We demonstrate the benefits of utilizing distributed imagined games in our framework through various simulation experiments. We show the high success rate, the increased navigation efficiency, and the ability to generate rich and realistic interactions with interpretable parameters. Illustrative examples are available at https://sites.google.com/berkeley.edu/distributed-interaction.

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