Capacity improvement from transmitter and receiver cooperation is investigated in a two-transmitter, two-receiver network with phase fading and full channel state information available at all terminals. The transmitters cooperate by first exchanging messages over an orthogonal transmitter cooperation channel, then encoding jointly with dirty paper coding. The receivers cooperate by using Wyner-Ziv compress-and-forward over an analogous orthogonal receiver cooperation channel. To account for the cost of cooperation, the allocation of network power and bandwidth among the data and cooperation channels is studied. It is shown that transmitter cooperation outperforms receiver cooperation and improves capacity over non-cooperative transmission under most operating conditions when the cooperation channel is strong. However, a weak cooperation channel limits the transmitter cooperation rate; in this case receiver cooperation is more advantageous. Transmitter-and-receiver cooperation offers sizable additional capacity gain over transmitter-only cooperation at low SNR, whereas at high SNR transmitter cooperation alone captures most of the cooperative capacity improvement.