The Microeconomics of Market Failures and Institutions

"A groundbreaking approach to microeconomics, this comprehensive textbook incorporates insights from biology, psychology, history and the law to explain the evolution of institutions over 12000 years to reduce transactions cost and deal with market failure." -Luis Garicano, London School of Economics, former member of the European Parliament "An exciting and crystal clear text book on institutions. Its interdisciplinary approach is exceptional, expanding the reader's perspective while preserving the analytical precision and rigor of economics." - Jonathan Schultz, George Mason University, affiliate of Harvard's Culture, Cognition, and Coevolution Laboratory "In the last few decades, the field of economics has been transformed by interdisciplinary research on how institutions and culture shape economic and political outcomes. This wonderful book is the first systematic and accessible exposition of these new insights. It is much more than a textbook, and it will be a precious companion to anyone who seeks a deep understanding of the historical roots of modern economies." - Guido Tabellini, Bocconi University, co-author of the book "The Economic of Effects of Constitutions" "In the economy, perfect markets are the exception, market failures are the norm. With the growing prevalence of monopolies, tariffs and polarization, "The Micro-Economics of Market Failures and Institutions" is a Copernican revolution in economics teaching, putting institutions at the center of the economic universe. A timely and necessary textbook for budding and accomplished economists alike." - Jan Eeckhout, University College London, Universitat Pompeu Fabra, author of the book "The Profit Paradox" "For those of us who seek to understand the foundations of a modern economy, the authors have written the ideal book. It is wide ranging in its intellectual reach and rigorous in its exposition. An outstanding textbook for ambitious undergraduates!" - Sanjeev Goyal, Cambridge University, New York University at Abu Dhabi, author of the book "Networks: an Economics Approach" This graduate textbook explores key microeconomic concepts to provide insight into financial markets, comparative economic development, and political institutions. Theoretical concepts are accompanied by historical and real life case studies to highlight the evolution of institutions and the solutions to market failures. General mathematical models are presented in a practical and clear manner and can be applied to problem solving scenarios. Key dilemmas relating to monopolies, institutional design, economic policy, power in society, and the rule of law are also discussed. This multidisciplinary book aims to provide a real world understanding of microeconomics and game theory, enabling readers to review policy and institutional requirements. It will be relevant to students and policymakers interested in institutional economics, the political economy, financial economics, and economic governance. Coen Teulings is Professor of Economics at Utrecht University. He was previously Professor at the University of Cambridge and President of CPB Netherlands Bureau for Economic Policy Analysis. Martijn Huysmans is Associate Professor of Political Economy at Utrecht University.