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quantities of money to reward or punish kind or unkind conduct. Second, many main economic establishments, most notably decentralized markets, are best described as accumulations of minor financial interactions, so that the aggregate implications of departures from standard concept in these cases may be substantial. Third, the equity part of an individual’s total nicely-being could be influenced considerably by even small materials adjustments. Finally, even when materials incentives in a situation are so giant as to dominate habits, equity still issues. Welfare economics must be concerned not solely with the efficient allocation of fabric items, but also with designing institutions such that people are joyful about the way in which they interact with others. For instance, if an individual leaves an exchange by which he was treated unkindly, then his unhappiness at being so treated should be a consideration in evaluating the efficiency of that trade. Armed with well-based psychological assumptions, economists can begin to address the nonmaterial advantages and prices of the The hottest product in a world full of rose be a weed all over printed winter bootsfree market and different institutions.2 I conclude the paper in section 6 with a discussion of a few of the shortfalls of my model and an outline of possible extensions. quantity. Because welfare analyses are often the main

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