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Institutions and Economic Theory: The Contribution of the New Institutional Economics
2005, 2nd Edition Eirik Furubotn and Rudolf RichterThis second edition assesses some of the major refinements, extensions, and useful applications that have developed in neoinstitutionalist thought in recent years. More attention is given to the overlap between the New Institutional Economics and developments in economic history and political science. In addition to updated references, new material includes analysis of parallel developments in the field of economic sociology and its attacks on representatives of the NIE as well as an explanation of the institution-as-an-equilibrium-of-game approach.
Already an international best seller, Institutions and Economic Theory is essential reading for economists and students attracted to the NIE approach. Scholars from such disciplines as political science, sociology, and law will find the work useful as the NIE continues to gain wide academic acceptance. A useful glossary for students is included.
Eirik Furubotn is Honorary Professor of Economics, Co-Director of the Center for New Institutional Economics, University of Saarland, Germany and Research Fellow, Private Enterprise Research Center, Texas A&M University.
Rudolph Richter is Professor Emeritus of Economics and Director of the Center for New Institutional Economics, University of Saarland, Germany.
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Cover
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Title
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Dedication
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Copyright
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Contents
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Acknowledgments for the First Edition
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Acknowledgments for the Second Edition
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Preface to the First Edition
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Preface to the Second Edition
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Chapter 1. Introductory Observations
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1.1. Some Basic Assumptions and Terms
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1.2. The Strange World of Costless Transactions
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1.3. The Ideal Type of the Classical Liberal State
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1.4. The Ideal Type of Market Socialism
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1.5. Constructed or Spontaneous Orders?
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1.6. The Work of the Invisible Hand Can Be Accelerated
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1.7. Rational Incompleteness
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1.8. Enforcement
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1.9. The Political Process
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1.10. Agency
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1.11. Institutional Stability
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1.12. Once More with Feeling
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1.13. The New Institutional Economics and Modern Institutionalism
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1.14. Some Notes on the History of the Old Institutional Economics
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1.15. Suggested Readings for Chapter 1
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Chapter 2. Transaction Costs
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2.1. The Concept of Transaction
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2.2. Transaction Costs: Illustrations and Attempts at Definition
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2.3. Guesstimating the Size of Transaction Costs
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2.4. Modeling Transaction Costs: The Activity “Transaction”
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2.5. Some Notes on the Development of the Transaction-Cost Literature
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2.6. Suggested Readings for Chapter 2
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Chapter 3. Absolute Property Rights: Ownership of Physical Objects
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3.1. The Property-Rights Approach: Some Basic Concepts
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3.2. Property Rights: Illustrations and Attempts at Definition
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3.3. Property in Physical Objects: The Private Property Issue
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3.4. Common Pool Resources
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3.5. The Emergence of Property Rights
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3.6. The Economic Analysis of Property Rights: Some Notes on the Literature
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3.7. Suggested Readings for Chapter 3
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Chapter 4. Relative Property Rights: Contractual Obligations
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4.1. Basic Principles of Contractual Obligations
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4.2. Diverse Types of Contractual Obligations
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4.3. Some Elements of Contract Theory from the Economist's Viewpoint
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4.4. Three Types of Contract Theory
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4.5. Resume
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4.6. The Economics of Contract Law and Contractual Behavior: Some Notes on the Literature
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4.7. Suggested Readings for Chapter 4
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Chapter 5. Contract Theory
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5.1. Overview of the Types of Contract Theory to Be Discussed
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5.2. Managerial Theory of the Firm: The Expense-Preference Model
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5.3. The Principal-Agent Model: Moral Hazard
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5.4. The Principal-Agent Model: Adverse Selection
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5.5. Implicit Contracts
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5.6. The Incomplete Contract Model
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5.7. Self-Enforcing Agreements
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5.8. The Institution-as-an-Equilibrium-of-a-Game Approach: A Note
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5.9. Looking Back
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5.10. Bibliographic Notes on Formal Contract Theory
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5.11. Suggested Readings for Chapter 5
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Chapter 6. The New Institutional Economics Applied to Markets, Firms, and the State: General Remarks
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6.1. The Elementary Rules of a Private Ownership Economy
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6.2. General Remarks on Organizations: The Firm, the Market, and the State
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6.3. A Brief Guide to the Literature on Order, Organizations, and Social Networks
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6.4. Suggested Readings for Chapter 6
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Chapter 7. The New Institutional Economics of the Market
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7.1. The Market as Organization
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7.2. On Price Rigidity
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7.3. Market Organization as a Result of Market Cooperation
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7.4. Some Views of Neoinstitutionalists on Market Organization
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7.5. Markets: Conclusion and Outlook
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7.6. A Brief Guide to the Literature on Market Organization
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7.7. Suggested Readings for Chapter 7
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Chapter 8. The New Institutional Economics of the Firm
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8.1. The Orthodox Neoclassical Firm
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8.2. The Incentive to Integrate
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8.3. The Limits of Integration
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8.4. Ownership and Control
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8.5. Institutional Models in the Tradition of the Neoclassical Theory of the Firm
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8.6. The Traditional Soviet Firm
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8.7. The Socialist Labor-Managed Firm
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8.8. Codetermination
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8.9. A Comparison of Some Formal Models of the Firm
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8.10. The New Institutional Economics of the Firm: Forerunners and First Steps
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8.11. The New Institutional Economics of the Firm: Summary and Main Literature beyond Coase
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8.12. Suggested Readings for Chapter 8
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Chapter 9. The New Institutional Economics of the State
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9.1. A Simple Neoclassical Theory of the State
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9.2. The Role of Political Institutions
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9.3. Political Markets
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9.4. International Relations
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9.5. A Brief Guide to the Literature on the Economics of the State and International Relations
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9.6. Suggested Readings for Chapter 9
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Chapter 10. Future Development of the New Institutional Economics
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10.1. Institutionalism as Extended Neoclassical Theory
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10.2. The Initial Approach Reconsidered
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10.3. The Basis of a New Paradigm
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10.4. Modern Institutionalism: The Opportunities for Progress
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Glossary
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References
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Author Index
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Subject Index
- 978-0-472-03025-5 (paper)
- 978-0-472-02714-9 (ebook)