Microeconomics : Behavior, Institutions, and Evolution

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In this novel introduction to modern microeconomic theory, Samuel Bowles returns to the classical economists' interest in the wealth and poverty of nations and people, the workings of the institutions of capitalist economies, and the coevolution of individual preferences and the structures of markets, firms, and other institutions. Using recent advances in evolutionary game theory, contract theory, behavioral experiments, and the modeling of dynamic processes, he develops a theory of how economic institutions shape individual behavior, and how institutions evolve due to individual actions, technological change, and chance events. Topics addressed include institutional innovation, social preferences, nonmarket social interactions, social capital, equilibrium unemployment, credit constraints, economic power, generalized increasing returns, disequilibrium outcomes, and path dependency. Each chapter is introduced by empirical puzzles or historical episodes illuminated by the modeling that follows, and the book closes with sets of problems to be solved by readers seeking to improve their mathematical modeling skills. Complementing standard mathematical analysis are agent-based computer simulations of complex evolving systems that are available online so that readers can experiment with the models. Bowles concludes with the time-honored challenge of "getting the rules right," providing an evaluation of markets, states, and communities as contrasting and yet sometimes synergistic structures of governance. Must reading for students and scholars not only in economics but across the behavioral sciences, this engagingly written and compelling exposition of the new microeconomics moves the field beyond the conventional models of prices and markets toward a more accurate and policy-relevant portrayal of human social behavior.show more

Product details

  • Paperback | 608 pages
  • 152 x 230 x 36mm | 839.16g
  • Princeton University Press
  • New Jersey, United States
  • English
  • 69 line illus. 40 tables.
  • 0691126380
  • 9780691126388
  • 349,493

Review quote

"This important and highly impressive volume is intended as an overview of cutting-edge developments in microeconomics for graduate students. . . . The work is well written and carefully structured. . . . [T]his is a very fertile and inspiring book, of much broader use than its intended audience. . . . Its analytical accounts of institutional structures and its masterly fusion of institutional and evolutionary themes might eventually warrant its status as a modern classic."--Geoffrey M. Hodgson, Economics and Philosophy "There must be dozens of introductory books with the word 'microeconomics' in the title, but for ambition alone Samuel Bowles's volume stands out. Not only does Bowles convey the elements of the conventional theory of capitalist economics--he offers a wealth of cutting-edge material as well . . . . [His] theory is neat, thought-provoking, and highly original--as is much else in this most unusual take on microeconomics."--Eric Maskin, Scienceshow more

Back cover copy

"Sam Bowles reminds the student from the first page to the last that microeconomic theory is an attempt to understand economic institutions in order to inspire us to improve the world. This book may be a turning point in bringing economics back to its real political economic roots."--Ariel Rubinstein, Tel Aviv University and Princeton University "The standard neoclassical competitive model of economic behavior has been significantly extended in the last fifty years by emphasis on interaction among small groups (game theory), on extended models of human motivation based in part on human evolution, and on divergent information bases of participants. A rich but scattered literature has now received a brilliant synthesis and development in Samuel Bowles's new book. Microeconomics will be an indispensable part of future teaching in microeconomics at the graduate or advanced undergraduate levels, as well as an excellent source of information for the practicing economist."--Kenneth J. Arrow "Homo economicus is dead, but whose Homo behavioralis will replace him? For those who care, this sustained and honest attempt to explore the implications for economic theory of one of the leading candidates is essential reading."--Ken Binmore, University College London "An important and highly original book that shows how an evolutionary version of microeconomics can be brought to bear on central questions of economic growth and organization."--Peyton Young, Johns Hopkins University "This is one of the most engaging books of its kind that has been written, intellectually challenging and a pleasure to read. It presents an innovative and unconventional perspective on microeconomics and, as such, is a book that many will want to teach from--I will."--Kaushik Basu, Cornell University "Bowles does a masterful job of expanding the boundaries of received microeconomic theory by drawing upon cutting edge ideas from behavioral and experimental economics, evolutionary game theory, and the new institutional economics. I don't know of anyone who has woven such a wide range of literature into an equally coherent vision of post-Walrasian microeconomic theory."--Gregory Dow, Simon Fraser Universityshow more

About Samuel Bowles

Samuel Bowles is Research Professor and Director of the Behavioral Sciences Program at the Santa Fe Institute and Professor of Economics at the University of Siena. He is coauthor of Notes and Problems in Microeconomic Theory (North Holland Texts in Mathematical Economics) and Schooling in Capitalist America (Basic Books), and has published articles, most recently, in the American Economic Review, Nature, the Quarterly Journal of Economics, the Economic Journal, and the Journal of Theoretical Biology.show more

Table of contents

Preface ixPrologue: Economics and the Wealth of Nations and People 1Part I: Coordination and Conflict: Generic Social Interactions 21Chapter One: Social Interactions and Institutional Design 23Chapter Two: Spontaneous Order: The Self-organization of Economic Life 56Chapter Three: Preferences and Behavior 93Chapter Four: Coordination Failures and Institutional Responses 127Chapter Five: Dividing the Gains to Cooperation: Bargaining and Rent Seeking 167Part II : Competition and Cooperation: The Institutions of Capitalism 203Chapter Six: Utopian Capitalism: Decentralized Coordination 205Chapter Seven: Exchange: Contracts, Norms, and Power 233Chapter Eight: Employment, Unemployment, and Wages 267Chapter Nine: Credit Markets, Wealth Constraints, and Allocative Inefficiency 299Chapter Ten: The Institutions of a Capitalist Economy 331Part III: Change: The Coevolution of Institutions and Preferences 363Chapter Eleven: Institutional and Individual Evolution 365Chapter Twelve: Chance, Collective Action, and Institutional Innovation 402Chapter Thirteen: The Coevolution of Institutions and Preferences 437Part IV: Conclusion 471Chapter Fourteen: Economic Governance: Markets, States, and Communities 473Problem Sets 502Additional Readings 529Works Cited 537Index 571show more

Review Text

Using advances in evolutionary game theory and the modeling of dynamic processes, this book develops a theory of how economic institutions shape individual behavior, and how institutions evolve due to individual actions, technological change, and chance events. It is aimed at students and scholars in economics, and across the behavioral sciences.show more

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61 ratings
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3 15% (9)
2 2% (1)
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