We have constructed a polarizable potential model for benzene using molecular dynamics techniques. The atomic site polarizabilities for carbon and hydrogen were taken from the recent work of Applequist [J. Phys. Chem. 97, 6016 (1993)], which reproduced the experimental molecular polarizability of the benzene molecule very accurately. Our model describes well the available experimental data such as the structure and thermodynamic properties of liquid benzene and the equilibrium properties of the liquid/vapor interface of benzene. The lowest minimum-energy structure of the benzene dimer predicted by our model has a T-shape with a potential energy of -2.5 kcal/mol. This value agrees with the experimentally obtained value (-2.4 +/- 0.4 kcal/mol), which was determined from a high-precision ionization measurement. The cyclic minimum-energy structures are found for both the benzene trimer and tetramer clusters. The computed density profile shows that the interface is not sharp at a microscopic level and has a thickness about 5 Angstrom at 300 K. The calculated surface tension is 25 +/- 2 dyn/cm, which is in excellent agreement with the experimentally obtained value of 28 dyn/cm. The results of our model also compare well with the corresponding results for benzene obtained by Jorgensen and Severance [J. Am. Chem. Soc. 112, 4768 (1990)], who used nonpolarizable potential parameters. We also report the details of our study of K+(C6H6)(n=1-6) clusters. We found that the polarization effects were quite significant in these systems.