This paper adopts a unified approach to an understanding of the development processes of the East Asian economies, Chinese, Japanese and South Korean, in terms of common five phases starting with Malthusian equilibria and extended to forthcoming post-demographic transitions characterized by the shrinkage of the working-age group share in the population. Notwithstanding of the basic commonality, however, there are also marked differences among the East Asian economies in the timing of turning points, durations, and substantive forms of the phases. The paper claims that those differences need to be co-explained by accompanying variations in institutional trajectories. It identifies the Malthusian origins of contrasting political-economic and social-norm characteristics in Chinese and Japanese institutional arrangements and discusses their transformations over successive phases. By delineating institutional characteristics of China and Japan from a game-theoretic perspective, it implicitly challenges prevailing views that contrast the East and the West in such general terms as kinship vs. the third party enforcement of contracts, Confucianism vs. Protestantism, collectivism vs. individualism, authoritarianism vs. liberal democracy, and the like. These dichotomies are too simplistic for explaining the uniqueness, commonality and variations of institutional arrangements in East Asia and their impacts on development processes of respective economies.

The 2008–2009 financial crisis demands we look anew at the role of corporations, and the working of financial markets around the world. In this challenging and insightful book, one of our most eminent economists provides a compelling new analysis of the corporate firm; the role of shareholders, managers and workers; and institutional governance structures.

In recent decades the firm has predominantly been seen as an organization run and governed in the interests of shareholders, where management acts as the agent of shareholders, and the workers simply as instruments for share-value maximization. This book reverses this viewpoint. It sees corporations as associational cognitive systems where "cognitive actions" are distributed amongst managers and workers, with shareholders supplying "cognitive tools" and monitoring their use in the systems. Aoki analyses the different relationships that can exist between shareholders, managers, and workers from this perspective, and identifies a range of different models of organizational architecture and associated governance structures. He also discusses ways in which corporations act as players in social, political, and organizational games, as well as global economic games; how these inter-related social dynamics may change particular, distinctive national structures into the diversity incorporated in the global corporate landscape; and how they now call for new roles for financial markets.

"Masahiko Aoki uses the social mathematics of game theory to reveal the deep structure of corporate governance systems, in the process explaining the persistence of diversity under conditions of globalization. His profound and highly original analysis speaks directly to the issue of corporate governance reform in the aftermath of the financial crisis of 2008–9."
-Simon Deakin, Professor of Law, University of Cambridge
"The recent wave of fraud, corruption, and fiscal irresponsibility at the highest corporate levels dramatizes the need for a model of the modern corporation that is at the same time deeply economic in the recognition of the centrality of incentives, and deeply sociological in the recognition of the centrality of social norms and a culture of corporate morality. Professor Aoki has combined his magisterial knowledge of business organization with a foundational study of the role of culture in epistemic game theory to produce, for the first time, a truly transdisciplinary model of the corporation."
-Herbert Gintis, Santa Fe Institute
"This is a path breaking book that provides a rigorous analysis of the cognitive underpinnings of corporations. It gives fundamental insights into the diversity of organizational forms that exist and the association of these with the historical, political, social, and technological contexts within which they operate. As with so much of Professor Aoki's work, it will radically alter the way in which we view the corporation."
-Colin Mayer, Peter Moores, Dean, Saïd Business School, University of Oxford
"A pioneering contribution which formalizes in game theoretic language complex institutional structure and environment of the corporation both at a moment of time and over time."
-Douglass C. North, Nobel Laureate in Economics 1993, Spencer; T. Olin Professor in Arts and Sciences, Washington University in St. Louis