Contents

1. Preface
2. Authorship and production
3. 01 Cooperation, conflict, and the environment
   1. 1.1 Introduction: Why were the kids in Kellogg, Idaho, sick?
   2. 1.2 What is economics and why do people cooperate?
   3. 1.3 How laws and rules of behavior affect what people do
   4. 1.4 How do people interact strategically?
   5. 1.5 The importance of options outside of the game and how they affect the players
   6. 1.6 People in conflict over possible benefits
   7. 1.7 People doing the best they can
   8. 1.8 Predicting what people will do
   9. 1.9 Conclusion: How good is the model?
4. 02 Changing the rules: Power and fairer bargains
   1. 2.1 Introduction: Democratic rights and changing the rules of the game
   2. 2.2 Changing the rules: The structures of the economy
   3. 2.3 Changing the rules: Democracy and bargaining
   4. 2.4 Sharing the economic benefits
   5. 2.5. Application: Environmental inequality
   6. 2.6 The economy: Government, firms, households, and the environment
   7. 2.7 Conclusion: How good is the model?
5. 03 Our world transformed: Institutions, inequality, and planetary limits
   1. 3.1 Introduction: The changes in life as we know it
   2. 3.2 History’s income hockey sticks
   3. 3.3 The institutions of capitalism
   4. 3.4 Capitalist institutions and living standards
   5. 3.5. Varieties of capitalism: Institutions, government, and politics
   6. 3.6 Another hockey stick: Climate change
   7. 3.7 Global poverty and inequality
   8. 3.8 Conclusion: The big economic picture
6. 04 Innovation, incentives, and technology
   1. 4.1 Introduction: What was farmwork like 200 years ago?
   2. 4.2 Types of technology
   3. 4.3 Inefficient technologies
   4. 4.4 Technology, innovation, and costs
   5. 4.5. Production functions: Turning inputs into outputs
   6. 4.6 Specialization, comparative advantage, and markets
   7. 4.7 Application: Technology and the Industrial Revolution
   8. 4.8 Conclusion: How good is the model?
7. 10 The firm and its workers: Finding a match
   1. 10.1 Introduction: Finding jobs
   2. 10.2 Why are labor markets different from other markets?
   3. 10.3 Workers finding jobs and firms filling vacancies
   4. 10.4 How do people find jobs in a modern economy?
   5. 10.5 Application: Matching and group inequality
   6. 10.6 Conclusion: Lessons of the model
8. 11 The firm and its workers: Effort and wages
   1. 11.1 Introduction: Workers work hard during recessions
   2. 11.2 Profits and ownership
   3. 11.3 Contracts, principals, and agents
   4. 11.4 The cost of losing a job
   5. 11.5 The labor discipline model: A best-response equilibrium between workers and employers
   6. 11.6 Conclusion: Lessons of the model
9. 12 The firm and its customers: Demand, costs, and profits
   1. 12.1 Introduction: Decisions, decisions, decisions
   2. 12.2 Profits
   3. 12.3 Production and costs
   4. 12.4 Demand and buyers’ willingness to pay
   5. 12.5 Deciding how much to produce and what price to set
   6. 12.6 Doing the best you can as the owner of a firm
   7. 12.7 Conclusion: Lessons from the model
10. 13 The firm and its customers: Market power and the benefits of exchange
    1. 13.1 Rising markups
    2. 13.2 How do buyers respond to price changes?
    3. 13.3 Shaping demand
    4. 13.4 The benefits of exchange and market power
    5. 13.5 Conclusion: Lessons from the model