With the substantial development of intelligent robots, human-robot interaction (HRI) has become ubiquitous in applications such as collaborative manufacturing, surgical robotic operations, and autonomous driving. In all these applications, a human behavior model, which can provide predictions of human actions, is a helpful reference that helps robots to achieve intelligent interaction with humans. The requirement elicits an essential problem of how to properly model human behavior, especially when individuals are interacting or cooperating with each other. The major objective of this thesis is to utilize the human intention decoding method to help robots enhance their performance while interacting with humans. Preliminary work on integrating human intention estimation with an HRI scenario is shown to demonstrate the benefit. In order to achieve this goal, the research topic is divided into three phases. First, a novel method of an online measure of the human's reliance on the robot, which can be estimated through the intention decoding process from human actions，is described. An experiment that requires human participants to complete an object-moving task with a robot manipulator was conducted under different conditions of distractions. A relationship is discovered between human intention and trust while participants performed a familiar task with no distraction. This finding suggests a relationship between the psychological construct of trust and joint physical coordination, which bridges the human's action to its mental states. Then, a novel human collaborative dynamic model is introduced based on game theory and bounded rationality, which is a novel method to describe human dyadic behavior with the aforementioned theories. The mutual intention decoding process was also considered to inform this model. Through this model, the connection between the mental states of the individuals to their cooperative actions is indicated. A haptic interface is developed with a virtual environment and the experiments are conducted with 30 human subjects. The result suggests the existence of mutual intention decoding during the human dyadic cooperative behaviors. Last, the empirical results show that allowing agents to have empathy in inference, which lets the agents understand that others might have a false understanding of their intentions, can help to achieve correct intention inference. It has been verified that knowledge about vehicle dynamics was also important to correctly infer intentions. A new courteous policy is proposed that bounded the courteous motion using its inferred set of equilibrium motions. A simulation, which is set to reproduce an intersection passing case between an autonomous car and a human driving car, is conducted to demonstrate the benefit of the novel courteous control policy.