The authors present new ways of looking at economic organizations andsystems. Individuals' judgments entail errors (they sometimes reject good projects and accept bad projects). The architecture of an economicsystem, specifying how the decision making units are organized togetherwithin a system,...

The authors examine a situation in which insurance is characterized by moral hazard. When market insurance is provided, supplementary mutual assistance between family and friends (unobservable to market insurers) will occur. When nonmarket insurers have no better information than market...