An Economic Theory of Greed, Love, Groups, and Networks

Why are people loyal? How do groups form and how do they create incentives for their members to abide by group norms? Until now, economics has only been able to partially answer these questions. In this groundbreaking work, Paul Frijters presents a new unified theory of human behaviour. To do so, he incorporates comprehensive yet tractable definitions of love and power, and the dynamics of groups and networks, into the traditional mainstream economic view. The result is an enhanced view of human societies that nevertheless retains the pursuit of self-interest at its core. This book provides a digestible but comprehensive theory of our socioeconomic system, which condenses its immense complexity into simplified representations. The result both illuminates humanity's history and suggests ways forward for policies today, in areas as diverse as poverty reduction and tax compliance. Advance praise: 'What I particularly like about this book is the serious and fruitful extension of the homo oeconomicus by including love and loyalty. An attentive reader will greatly benefit from this easy-to-read book.' Bruno S. Frey, Distinguished Professor of Behavioural Science, Warwick Business School Advance praise: 'Mainstream neo-classical economics offers powerful insights into many complex and puzzling patterns of human behavior. Yet these insights go only so far, as many - perhaps, most - behavior patterns fail in untold ways to conform to the simple stimulus-response insights offered by this discipline. Frijters (with Foster) has fundamentally extended this economic paradigm. They have waded into a variety of other human motivations (featured in other disciplines), and selected those patterns that best complement the insights of conventional economics. Concepts of love, friendship, loyalty, power, coalitions, ideals, joy and compassion are all explored, and are used to temper, leaven and expand the insights of self-interested maximization. This is a formidable task, and their efforts are reflected in the breadth and depths of the insights that they offer on issues such as trade policy, environmental regulation, tax compliance, and income redistribution.' Robert Haveman, University of Wisconsin, Madison Advance praise: 'This is the most remarkable book I have read in the last decade. It argues that your life, and society, is shaped by a giant version of the Stockholm Syndrome. If you have no idea what that sentence could mean, and you like a book that is intellectually taxing but unforgettable, this is for you.' Andrew Oswald, University of Warwick, and Visiting Fellow and Acting Research Director, IZA Institute, Bonn Advance praise: 'In the grand tradition of Gary Becker, Paul Frijters offers a unified theory of human behavior ...This impressive book seems to explore every nook and cranny of human behavior, and beautifully articulate[s] economic matters on every page.' Jeffrey G. Williamson, Laird Bell Professor of Economics Emeritus, Harvard University, and Honorary Fellow in Economics, University of WisconsinPart I. Greed and Love: 1. Individual materialism, organizations, and power; 2. Love: the missing building block; Part II. Groups, Power and the Development of Institutions: 3. Groups and power; 4. Networks and markets; Part III. Implications and Examples: 5. The aggregate view; 6. Theoretical appendix.