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Players have consonant interests if each has a strategy favourable to the pursuit of his own and the interests of the others when the latter adopt a best response. Reasonableness is to move according to such a strategy at the stage reached, reaping the gains this generates. Some overt games hide an underlying game in the choice of rules of choice in which reasonableness is substantively rational, credible and leads to a state that Pareto dominates the Nash equilibria of the original game. The paper contains an application to the finite prisoner's dilemma.

A standard Ricardian model is completed with the introduction of a market for land. If the economy were endowed with enough future markets, it would have no equilibria. The economy does however admit temporary equilibria of two types. The first uses equilibrium expectations; full employment instantaneous equilibrium can exist, but it can last only for a finite period, it is characterized by booms and slumps and it enjoys very strange comparative static properties. The second uses more far-sighted expectations; equilibrium is much better behaved but it is riddled with Keynesian problems.

Not all the coordination of decisions observed in real economies is produced by the market; a substantial part is the result, on the one side, of agreements and contracts, on the other, of social rules supported by punishments ministered by individuals but in name of the community. Both agreements and rules lead to some "cooperation", and its extent determines how much of the potential gains in efficiency are actually realized. If one wants the "cooperation" in question to be supported as a non cooperative equilibrium, the length of the time horizon on which individuals evaluate the effect of current actions and the willingness, not only to observe, but also to minister punishment, in order to support social rules, are important. What is argued is that there are signs that both the horizon considered by individuals and the efficacy of social rules have shrank in recent times, at least in Italy, and some of the possible causes are outlined.

Competition, hopefully perfect, both among agents and among countries, has become the ideal in recent years. In equilibrium, it maximizes the gains from specialization and division of labour and leads to Pareto efficiency. But one knows stability to be a problem; furthermore, most markets are riddled with information asymmetries, which, among other things, cause future markets to be largely absent. In these conditions, specializing, making oneself more dependent on exchange increases one's exposure to risk. This paper argues that controlling this risk may be what hinders specialization. In many cases, agents will be sensitive not so much to "market" prices, as to the array of contractual opportunities open to them, to the fact that these opportunities will persist and to the reliability of correct fulfilment. There is an interest, not only of each agent, but of society as a whole to ensure these conditions are satisfied, an interest pursued through carefully designing social and political institutions, and ensuring they work properly, perhaps much more than through the action of market mechanisms. Increasing the number of agents in a market, making exchanges more impersonal, while it may drive towards perfect competition, can be at odds with ensuring agents against the mentioned risks.

The drive for privatisation and liberalisation is still on the increase. However, the literature on contracts points out that using prices to provide incentives is quite a crucial issue. Asymmetric information prevents markets from working efficiently. Indeed, the origins of state failures do not differ from those of market failures. Support for privatisation and liberalisation should be argued on a case by case basis, and not on general assertions. A certain attention for public intervention and the implementation of the appropriate social and institutional framework should not be abandoned.