Includes bibliographical references (pages 297-311) and index.

The liberal tradition and the challenge from behavioural economics -- The view from nowhere -- The contractarian perspective -- The inner rational agent -- Opportunity -- The invisible hand -- Regulation -- Psychological stability -- Intrinsic motivation, kindness, and reciprocity -- Cooperative intentions -- The principle of mutual benefit.

Normative analysis in economics usually aims at satisfying individuals' preferences, valuing economic freedom and viewing markets favourably. Behavioural research, however, shows that individuals' preferences are often unstable. Robert Sugden proposes a reformulation of normative economics compatible with psychology of choice.