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Conflict and Cooperation: Institutional and Behavioral Economics


For those who wonder how ethics and psychology fit into economics, Allan Schmid’s innovative text, Conflict and Cooperation,explores the importance of moral judgments in settling conflicts of interest, and the vast effects of human behavior on economic theories and models. Investigating the institutional 'rules of the game' – both formal and informal – and how these rules change to serve competing interests, this text addresses the substantive impact of alternative institutions and institutional evolution. An economic framework emerges, acknowledging human learning and preference change, bounded rationality, and disequilibrium.

With its broad applications and numerous practice and discussion questions, this text will appeal not only to students of economics, but also to those studying sociology, law, and political science.

A. Allan Schmid is University Distinguished Professor in the Department of Agricultural Economics at Michigan State University. He is the author of eight books, including Property, Power, and Public Choice (second edition, 1987), and Benefit–Cost Analysis: A Political Economy Approach (1989).
Forword by Warren J. Samuels.


1. Introduction.

2. Institutional and Behavioral Economics Theory.

3. Behavioral Economics.

4. Individuals and Institutions.

5. Institutions and Organizations.

6. Sources of Human Interdependence.

7. Methods.

8. Markets.

9. Macro-Economic Institutions.

10. Technology, Growth, and Institutions.

11. Labor Institutions.

12. Political Institutions.

13. Institutional Change Analysis.

14. Recapitulation.