Book Description

Changes in the world economic climate have fundamentally altered not only the way products are created, but also the way businessesform and thrive. Large organizations once grew by swallowing whole the smaller companies with which they worked. Now, growth for both large and smallcompanies is fostered and nurtured by strategic alliances.

This timely book illustrates five types of strategic alliances and how to structure them to achieve the goals of the component companies. Drawing fromindustries such as communications, healthcare, appliances, and defense, the book covers:

* How to determine the right type of alliance, and structure it to meet each company's stated goals * Sharing knowledge and building inter-company teams * Successfully ending an alliance

Filled with sample legal documents and agreements, frameworks and guidelines, the book is an essential resource for companies considering strategicalliances. ... Read more

Reviews (2)

The coming wave of alliances
This book is awesome! It represents a senior executive view on alliances, yet provides a step-by-step process to lead and manage alliances.With the conditions of the global economy dictating "Adaptive" enterprises, companies will be heavily relying on alliances to extend their core competency reach. This book provides the insights to successfully execute alliances - something that only the best of companies are doing today. It is a must read for anyone involved with alliances.

The Art of Partnering Effectively and Profitably
With Jeff Hook, Fred A. Kuglin makes a practical analysis about the conclusion and management of alliances during their lifecycle. Kuglin provides a framework to determine the need for an alliance that on its turn provides a roadmap to determine what type of alliances makes sense. Kuglin gives his readers a useful outline to draft the letter of intent, definitive alliance agreement, alliance business plan, and non-disclosure agreement. Each of these outlines is particularly useful for his readers who have already had the opportunity to take an in-depth look at these documents. To his credit, Kuglin repeatedly emphasizes the importance of involving internal and/or external counsels in drafting these documents from the beginning. Kuglin shares his experience with his readers about the working of alliances in different industries such as aeronautics, transportation, and telecommunications. Furthermore, Kuglin provides a roadmap that allows his audience to reassess the validity of keeping an alliance alive over time or not. Knowing when to disband/adapt an existing alliance is as important as making a new alliance. Finally, Kuglin builds on his expertise to define the critical success factors in establishing alliances and uses both General Electric and Cisco Systems of his "Hall of Fame" to illustrate them. In a second edition of Strategic Alliances, Kuglin could perhaps further elaborate on the first mover advantage in making an alliance or not. In their excellent Will and Vision, Gerard J. Tellis and Peter N. Golder debunk the myth of the first mover advantage by demonstrating that pioneers are rarely rewarded for their efforts at the end of the day. Is this empirical observation of both Tellis and Golder also true for the conclusion and management of alliances over their lifetime? ... Read more

Book Description

In this book Ralph Gomory and William Baumol adapt classical trade models to the modern world economy. Trade today is dominated by manufactured goods, rapidly moving technology, and huge firms that benefit from economies of scale. This is very different from the largely agricultural world in which the classical theories originated. Gomory and Baumol show that the new and significant conflicts resulting from international trade are inherent in modern economies.

Today improvement in one country's productive capabilities is often attainable only at the expense of another country's general welfare. The authors describe why and when this is so and why, in a modern free-trade environment, a country might have a vital stake in the competitive strength of its industries. ... Read more

Reviews (5)

Interesting Discussion but poor Presentation
The first thing that struck me was the large number of typo's.
Starting with page 4: "when we does development abroad help"
and on through the rest of the book. Also, the graphics appear
crude.
In part 1, I could not find any reference to the fact that
"free" trade does not exist in the real world. Countries use
tariffs, taxes, subsidies, etc. to further their own interests.

Understanding International Trade
A must read book for anyone with an interest in International Trade. Gomory and Baumol take an insightful look into trade in this era of multinational companies, expanded trade and developing countries. They develop a technique to determine whether a trade decision is mutually beneficial (or detrimental) to the parties. While no "magic" formula to precisely determine the benefits of an individual trade decision, at least there is a cogent framework to start from.

As a lay reader it was apparent that to assure our continued growth and successes that we must continually innovate to create the next big retainable industry as well as continue productivity gains to compete with low wage developing countries in easy to enter industries where we have a major interest.

An exceptionally thorough analysis of today's world of trade.

Trade For Dummies
Don't be put off by the title. This book should be called "Trade for Dummies." The authors kindly start where most of us left off in Econ 101 - with comparative advantage. We all remember that nature endowed England with a comparative advantage in wool, and Portugal in wine, so that this trade was an obviously good thing.

But what about today's vastly more complex economy where considerations go far beyond the mere geography of natural resource distribution? What about the role of industrialization? Or technology? Or information? Who has what advantage? And how to measure it? The authors have solved this seemingly daunting task, and present their conclusions in a few simple graphs that could fit easily onto Mr. Laffer's napkin.

How do I know that they solved the problem of reducing all the complexities of international trade to a few simple graphs? Well, I really don't know because I am not enough of an economist or mathematician to follow the technical stuff, but the authors very kindly put all that in the second half of this slim volume as kind of an appendix for the professionals. That the two authors are a leading economist and a leading mathematician is obvious from the brief biographies. And that the work passes professional muster is obvious from the blurbs. So while I can't personally check the authors' assumptions and methodology, I can accept and fully understand their conclusions as set forth in the first half of the book - the only part I read.

Not surprisingly, the graphs show that most international trade is indeed mutually beneficial. But not all. The graphs also reveal what the authors call a zone of conflict. It is to this area that attention needs to be paid. What attention do the authors suggest? Well, they are a little coy. I suspect that at this stage they are just trying to get acceptance for their framework of analysis. Anyone questioning any aspect of unrestricted free trade today is subject to being labeled a protectionist, which is only one step above racist, so the authors understandably tread very carefully.

A splendid and provocative little book dealing with a very big subject.

Gripping Eye Opener
These 73 pages kept this layman engrossed and enlightened. You learn why World Peace through World Trade ain't necessarily so, but can be a win-win situation for nations who understand the theory of the Global Trade game.

In cogent and concise language,the two gifted authors upset the notion that a dollar of National Trading Income is indifferent to what is being traded. National Trading Income from a "retainable" industry like computer chips produce strategic strengths for a nation compared to the same amount of National Trading Income from potato chips.

This new vector on Global Trade alerts business leaders to rearrange intellectually their risk-reward equation to secure a more favorable outcome.

Great stuff!
Gomory and Baumol are two heavy-weights from the world of Economics, Industry and Mathematics who have made use of a lifetime's worth of observations to create a new theory of international trade. Their work is truely original, theoretically rigorous, and highly applicable to real-world problems: A powerful combination. As a graduate student in economics, I have found few books so compelling. ... Read more

Reviews (5)

The Titan of the Neo-Classics
The British economist Alfred Marshall is one of the greatest political economists of all times and this book represents a deep effort to address in an orderly way the many social and economical issues that were at stake at the turn of the 19th to the 20th century. This way of addressing disturbing social questions is an Alfred Marshall trademark.

In this sense, his motto could well be the oft quoted " Natura non facit saltum" , which is Latin for "Nature does not evolves in leaps and bounds", and all things are going to be all right in the future but it will take some time untill they consolidate themselves into a coherent whole, where everyone in this world will have an opportunity to fully develop his natural propensities for love, companionship and free will. His view is helped by the many mathematical formulae he uses to illustrate his points of views, using differential calculus, due to his mathematical background. But the reader has not to worry if he/she is not proficient with this type of mathematical tools, because they are used only as a side-line to the text, which is dense and full of logical thinking in itself. Marshall, despite his mathematical background, didn't judge Mathematics as a fundamental tool to Politcal Economy.

Alfred Marshall is the most influential representant of the minimalist movement called Neo-Classics Economics (Stanley Jevons, Vilfredo Pareto , Karl Menger) and in this capacity is the most notorius proponent of what today is taught and learned in all Economics Schools over the world as Microeconomics, or the economics of particular competitive or non-competitive markets. In some way, he is both the inheritor of the Utilitarian theories of Jeremy Bentham, as of the economics doctrines of David Ricardo and Adam Smith. Also, one of the interesting facets of Marshall is that he had both John Neville Keynes (the father) and John Maynard Keynes (the son) as one of his pupils in Economics.

His knowledge of History and Mathematics is astounding and if he has not reached the status of Keynes or Adam Smith, this is more due to the constraints of the Victorian era in which he wrote this book, and the influences he received, than to any lack of deep understanding of economics realities, which were indeed recognized by John Maynard Keynes himself as fundamental to the latter development he gave to the so-called Dismall Science.

The most influential book of Economics of the 20th century
This is certainly one of the most influential books ever written, and served as a pathway to a lot of governmental measures adopted at by many countries to adopt its fiscal, employment and money policies to revert the forces of recession in the United States and Europe.

But this is not a book easy to read, given the fact that Keynes had to break a lot of prior misconceptions and fallacies of earlier economists. Also to be taken into consideration is that Keynes was especially keen of linguistics and got all the opportunities to present a very refined text with big literary value. What Keynes had in mind was to discard the useless precepts of free-hand economics, in the very tradition of early British neo-classical economists like Alfred Marshall and Stanley Jevons, and to energetically recomend state intervention to secure full-employment policies.

Keynes was instrumental in many important policies adopted in the first half of the last century and along with Adam Smith, David Ricardo and Karl Marx, deserves to step to the pantheon of the most influential economists of all times.

Both reviewers are correct!!!
The other two reviews in this page are both correct but they review different books. Both reviews, however, appear under both items. I would, therefore, keep the ratings of each reviewer for each edition.
The Great Minds Series is indeed abridged and omits crucial material from Marshall's Principles. Marshall put all the mathematical apparatus in the Mathematical Appendix which is omitted in the Great Minds Series. The Porcupine edition is the unabridged edition of Marshall's 1920 8th edition of the Principles. The first edition was in 1890.
There is also a variorum (9th edition) of the Principles edited by C. W. Guillebaud, 2 vols (1961), which is out of print, but it appears as volumes 4&5 in Peter Groenewegen's Collected Works of Alfred Marshall,Thoemmes, 1997. There is also a great free on-line edition in the Library of Economics and Liberty.
The book is by all means a classic. It consolidated neoclassical economics and it was one of the most influential books on economics ever written. Indeed, the very change of the name of economic science from "political economy" to "economics", although not suggested by Marshall, is due to the influence of the Principles.
To understand Alfred Marshall (1842-1924), I would suggest to read John Maynard Keynes's "Alfred Marshall" essay in Essays in Biography (1933) or Peter Groenewegen's magisterial biography "A Soaring Eagle: Alfred Marshall 1842-1924", Elgar,1995.

The Porcupine edition is NOT ABRIDGED!
The other review on this page is incorrect! It's a cut-and-paste job from a review of the Great Minds edition, which is abridged. The porcupine edition is NOT ABRIDGED. If you are reading Marshall's principles for the first time, or if you want a copy for reference, this is the edition you want to buy. I don't know who is responsible for the cutting-and-pasting, but this error should be corrected right away.

Watch out! Great book, but this edition is abridged.
Everyone interested in economics should read this book, but this abridged edition excludes Books 4 and 6 and some interesting appendices. ... Read more

Book Description

This book brings together in one place the work of one of our most respected economic theorists on a field in which he has played a large part in originating: the New Institutional Economics. Transaction cost economics, which studies the governance of contractual relations, is the branch of the New Institutional Economics with which Oliver Williamson is especially associated.

Transaction cost economics has had a pervasive influence on current economic thought about how and why institutions function as they do, and it has become a practical framework for research in organizations by representatives of a variety of disciplines. Through a transaction cost analysis, The Mechanisms of Governance shows how and why simple contracts give way to complex contracts and internal organization as the hazards of contracting build up. That complicates the study of economic organization, but a richer and more relevant theory of organization is the result. Many testable implications and lessons for public policy accrue to this framework. Applications of both kinds are numerous and growing.

Written by one of the leading economic theorists of our time, The Mechanisms of Governance is sure to be an important work for years to come. It will be of interest to scholars and students of economics, organization, management, and law. ... Read more

Reviews (2)

A boring style
Ok...a well recognized teacher from aleading university...strong content...but...but...such a boring book. Really annoying to read. A lot of words made by the author (to sound more scientific?)....hey O. Williamson, next time you writte a book....use a simple style with understandable sentences like the author of "Iraationnal Exuberrance"! Really, there are lots of other books more interesting on the topic...AVOID!!!

A classic of transaction cost economics
Oliver Williamson is one of the seminal figures of New Institutional Economics. "The Mechanisms of Governance" is the third book in which Williamson has collected his principal writings, while working them into a coherent whole. The earlier volumes, "Markets and Hierarchies" and "The Economic Institutions of Capitalism," are justly regarded as the foundational texts of the transaction costs economics school of institutional economics. "The Mechanisms of Governance" seems certain to join them as essentials for any legally literate economist or economically literate lawyer.

Transaction cost economics focuses on institutions, in contrast to neoclassical economics' focus on individuals, providing simple models that help us understand how institutions function and how they will respond to regulation. We can analogize transaction costs to friction: they are dead weight losses that reduce efficiency. They make transactions more costly and less likely to occur. Among the most important sources of transaction costs is the limited cognitive power of human decisionmakers. Unlike the Chicago School of law and economics, which posits the traditional concept of rational choice, Williamson asserts that rationality is bounded. Put another way, he assumes that economic actors seek to maximize their expected utility, but also that the limitations of human cognition often result in decisions that fail to maximize utility. Decisionmakers inherently have limited memories, computational skills, and other mental tools, which in turn limit their ability to gather and process information. As he demonstrates, this phenomenon, known as bounded rationality, has pervasive implications for understanding how institutions work.

Accordingly, Williamson's approach provides an analytical framework that is useful not only to economists, but also to lawyers and policymakers. Among other subjects, Williamson tackles such subjects as vertical integration, corporate governance, and industrial organization.

In sum, highly recommended. If so, you might ask, of course, why did I subtract one star? Mainly because of Williamson's unfortunate writing style. Although "The Mechanisms of Governance" is largely free of the recreational mathematics that plagues much modern economic writing, which is useful for those of us who flunked Differential Equations, it is very jargon-intensive. Worse yet, much of the jargon is self-created. All of which makes reading Williamson an effort-intensive project. Usually the cost-benefit analysis nevertheless comes out in his favor, but sometimes one puzzles out the jargon to find a rather obvious point that could have been conveyed far more simply. ... Read more

Book Description

In this provocative book, Paul Glimcher argues that economic theory may provide an alternative to the classical Cartesian model of the brain and behavior. Glimcher argues that Cartesian dualism operates from the false premise that the reflex is able to describe behavior in the real world that animals inhabit. A mathematically rich cognitive theory, he claims, could solve the most difficult problems that any environment could present, eliminating the need for dualism by eliminating the need for a reflex theory. Such a mathematically rigorous description of the neural processes that connect sensation and action, he explains, will have its roots in microeconomic theory. Economic theory allows physiologists to define both the optimal course of action that an animal might select and a mathematical route by which that optimal solution can be derived. Glimcher outlines what an economics-based cognitive model might look like and how one would begin to test it empirically. Along the way, he presents a fascinating history of neuroscience. He also discusses related questions about determinism, free will, and the stochastic nature of complex behavior. ... Read more

Reviews (3)

Good first effort towards integrating neuro and econ
One of this book's greatest gifts is to clearly explain how our thinking about our thinking (neuroscience) has evolved over the past 2000 years. This book makes a significant contribution to the readers' historical understanding of psychology, philosophy, mathematics, and game theory.

One weakness of the book's approach is the lack of references to affect (emotion), which is suggested to have an impact on human utility and probability estimations in (Loewenstein, Loewenstein, Weber, & Welch, 2000), (Slovic, Finucane, Peters, and MacGregor, 2002), and (Knutson and Peterson, 2003). In fact, Glimcher states: "Neuroeconomics provides a model of the architecture that links brain and behavior. Mind, though it may very much exist, simply does not figure in that equation (p343)."

The author's conclusions are limited to a logical, computational frame of reference - a form of computational behaviorism. This style certainly has applications within limited experimental games, but it is doubtful that it will provide significant insight into the workings of complex dynamic systems, such as the financial markets, without incorporating symbolic psychological concepts (such as affect).

This book is an excellent introduction to the field of neuroeconomics. Glimcher's exposition of the evolution of neuroscientific thought is fascinating and worth savoring. Glimcher's discussion of game theory is fascinating, but applications to real-world environments are not directly posited.

The latter half of the book, while intellectually interesting, reads much like an expanded academic journal article. Glimcher explains his lab's experimental trials and tribulations in much of the second half...

Neuro and economics, not neuroeconomics
Deisions, Uncertainty, and the Brain feels undigested, as if the author crammed in the library for a month and wrote a book on his notes.

Part I covers the neuro-, Part II covers the -economics, but instead of Part III, covering neuroeconomics, there's a 17-page-short chapter called "Putting It All Together."

For most of the book, things don't merge. For example, chapter 5 describes important experiments by Newsome and Shadlen that are not really neuroeconomics. Four seemingly tacked-on paragraphs at the end of the chapter argue that neuroeconomics has something to say about the experiments. But it's not clear what that is, and it's not clear why Glimcher didn't choose a more obviously relevant example.

A more general problem is that Glimcher argues throughout that current approaches to neuroscience are all reflex-based, and we need a major paradigm shift to make any more progress in brain research. But the examples he gives that employ his new paradigm seem to be well within the realm of normal cognitive neurophysiology. For example, the Ciaramitaro et al. attention experiments described in chapter 13 are elegant, but don't come across as paradigm shifting, in either the chapter, or the original Vision Research paper. Neuroeconomics comes to seem like just another tool in the toolbox, instead of a big new theory.

It may be that there is no Part III because the science has not yet happened. In which case, not writing more about it was a good thing to do. Parsimony is a virtue, but if there is not enough of a story to tell, I would have liked to see the author present his ideas about the major problems for the field, a Hilbert's 23 for neuroscience in the 21st century. Instead chapter 13 gives us four toy problems in primate physiology.

The best parts of the book are the history. Some of the stories are familiar, but most are not, and all are told engagingly. Although they don't really come together into a cohesive whole, they are interesting on their own, and a reader with a detailed knowledge of the field can connect most of the dots.

Thinking Outside the Black Box
70 years ago, behavioral economists were trapped outside the black box for the same reasons everyone was: science couldn't see inside the brain directly. Like behavioral psychologists, they decided to make a virtue out of a neccessity and ignore the black box.

Now behavioral economists can look inside the black box, but most choose to ignore it, perhaps because the learning curves on physiology and imaging are so steep.

Glimcher argues in this wonderful book that neuroscientists are unwittingly trapped inside the same black box, and need a way out. Maybe they can befriend those behavioral economists. Consider this book an arranged date that will hopefully turn into a long marriage.

It is rare for a book aimed at the public to be written by a young and active scientist. The obvious comparison is Spikes, by Reike, et al. But whereas Spikes was too mathematical for the general reader, Decisions, Uncertainty, and the Brain never gets
boring. It describes fascinating experiments, both 100 years old and being done right now. Experiments that you've never heard of, but you should. Best of all, it describes them passionately and non-scarily.

More importantly, Decisions points throughout to directions for future research, rather than only describing past experiments.

Don't be fooled by the book's elegance. It is meticulously crafted to be enjoyable to the lay reader but also highly rewarding someone more familiar with the research described. In short, a masterpiece. ... Read more

Amazon.com

With Fortune Favors the Bold: What We Must Do to Build a New and Lasting Global Prosperity, Lester Thurow follows on his bestsellers The Zero-Sum Society and The Future of Capitalism by addressing the path to globalization. Thurow--a Professor of Management and Economics at MIT's Sloan School--draws uncompromising conclusions: only a bold embrace of globalization will bring prosperity, and nations that fail to engage in global economics will fall behind the world's dominant powers.

He sees three simultaneous revolutions that fuel the rush to global business: the birth of knowledge-based industry, the creation of a global economy built on a worldwide information infrastructure, and the victory of capitalism. But Thurow is not naively optimistic about the prospects for prosperity in this new framework. The U.S. trade deficit, the Chinese export economy, the SARS epidemic, and the stagnating Japanese economy all offer real threats to short-term and long-term well-being.

Some readers will be frustrated that Fortune Favors the Bold does not deliver a detailed set of solutions to these impediments to global prosperity, despite Thurow's thorough research. The U.S. trade deficit, like the absence of international intellectual property rights, he labels a "dilemma": a problem that has no prescriptive answer. Crises will occur, he suggests. The challenge is to prepare for them and manage them well. Thurow urges the creation of new institutions to confront these dilemmas head on, notably the creation of a Chief Knowledge Officer (CKO) for governments and major corporations. The CKO will provide a central intelligence to steer nations and corporations through the difficulties of economic revolution. For Thurow, fortune will favor those leaders who boldly shape globalization and invest in emerging technologies. Those who stand by will be doomed to marginalization. --Patrick O'Kelley ... Read more

Reviews (26)

Thurow's mistake
Lester Thurow has some choice remarks to make about China in the new century. He is certainly right that if you extrapolate China's GDP, that country will still be small in 2100. But yes, he neglected to figure exchange rates fluctuations into the equation.

China's GDP in 2001 was $1.159 trillion - a mere 28% of Japan's $4.141 trillion. (Let's ignore purchasing power parity for the moment.) After two decades of China growing at 7% per year and Japan at 2% per year, China's nominal GDP will still be a mere $4.486 trillion, versus Japan's $6.153 trillion, in 2021. By contrast the US will be $20 trillion (at 3.5% a year), which is almost twice as big as Japan and China combined. Although China will still be the fourth largest economy in the world, after the EU, US and Japan (and EU must be counted as a unit by then), China will clearly still be a small fry - less than a quarter the size of America's economy!

In the meantime, however, it seems inconceivable that the Chinese currency will still be pegged to the dollar at 8.28 yuan. Most likely China's currency will rise gradually as the central government slowly loosens its grip on the trading band over the next 17 years. Should China's yuan be worth twice its present value by 2021, China's GDP, $4.486 trillion in 2001 dollars, should double to almost $9 trillion. While $9 trillion is still small compared to America's $20 trillion and EU's even larger economy, it is no chump change. To say therefore that China will still not be an economic powerhouse by 2200 - 79 years after 2021 - is a prognostication unworthy of a C+ student at Thurow's own MIT management school. After all, in 2003 Japan's economy is only 44% as big as America's, and though it's struggling to grow, it is nothing to sneeze at. China could grow to 45% America's size in less than two decades.

In short, my calculations show that in 2021 America could be worth $20 trillion, China as much as $9 trillion, and Japan over $6 trillion. The EU may end up bigger than America - or may not. (EU's path to grow lies more in bigger membership than in economic growth.) That means China will likely be the second or third largest economy in the world less than two decades from now, measured in nominal GDP at 2001 dollars.

For those of you who are surprised by this, consider that in 2005 China will surpass the UK in nominal GDP to be the fourth largest economy in the world after the US, Japan, and Germany. Jumping from 4th place to 3rd place from 2005 to 2021 (16 years!) is not exactly my idea of a spectacular improvement. (Some Africa states can leap - or in some cases tumble down - by ten places in a single year! There are 180 some countries, remember.) Can a CEO boast that his company's sales or market value miraculously went up by one Fortune 500 rank in 16 years?

The vagaries of currency rates mean that the PPP remains the single best, if unperfect, measure of comparing economies' sizes. The best forecasts show that China's economy will be worth $20 trillion in 2020 or 2021 - exactly equal to America's - given 7% growth for China and 3.5% for America. By THIS measure China could be the largest economy in the world in our lifetime.

In either case, China will be huge - like a hot air balloon blowing up before our eyes.

How big China will get by 2100 is anyone's guesses. I won't hazard an estimate if only because anything can happen 96 years from now. Thurow should not have gone into this fortune-telling business. Leave that to other "professionals."

I cannot believe a distinguished economist like Thurow could have made such an elementary error. British astronomer Martin Rees diffidently puts his money on the Big Bang Theory at "only" 98% chances of being correct, adding, "Astronomers are often in error but never in doubt." In fairness to Sir Martin, the record of economists is far worse. Mr. Thurow is over-confindent in his views, as this book shows.

How can one be wrong so much and still be called an expert?
It is so sad how wrong someone can be proven over and over again and still, he/she is rewarded, called a genius and is allowed to teach our youth. Here is a quote from the author: "Can economic command significantly... accelerate the growth process? The remarkable performance of the Soviet Union suggests that it can... Today the Soviet Union is a country whose economic achievements bear comparison with those of the United States." This was in 1989, just shortly before the Societ Union collapsed. Unfortunately, being this wrong in economics gives one awards and allows you to teach college students while being described a genius. Sad. Mr. Thurow may be a 'genius', but geniuses can be wrong too.

Infrastructure
One of the wildest claims in this book has to do with the question of infrastructure. Thurow claims India has better infrastructure than China. But today the chairman of GE, Jeff Immelt, told his audience in India that they would never catch up with China unless they improve their infrastructure. Immelt said India lagged behind China in health and in things like airports and roads. And this, he said, was a major reason why India was a "disappointing" market for GE.

Somebody must be wrong - either the GE chairman or the MIT professor. There are many other errors in this book, not only in facts and statistics, but also in analysis. (Another whopper, of the analysis variety: Thurow says that Confucianism and Communism combined to emphasize education in China, and that this is one reason why China is so highly educated for a developing country. I don't know about Confucianism, but I do know that for years Mao decimated higher education in China, so that at one point college students had the reading ability of a junior high student while junior high students could barely read.)

Logical and important.
A thorough and logical overview of economics and globalization, with predictions as well as prescriptions to manage potential problems. Although the predictions may or may not come true, the book is important because it allows readers the opportunity to understand in a clear, readable and factual manner, the issues we face as a "world economy".

If you want to read only one book which explains globalization, the rationale behind government run fiscal policies, the impact of trade deficits, and changing roles of governments and the world bank, this is a great one.

Fortune Favors the Bold : What We Must Do to Build a New and
Thurow's premise is that globalization will proceed at a rapid pace whether or not firms and nations choose to participate, that this process has created great challenges, and that the economic future of the world is at stake. Thurow (Massachusetts Institute of Technology, and author of numerous books, e.g., Building Wealth, CH, Mar'00; Head to Head, CH, Sep'92; The Future of Capitalism, 1996) contends that the world is experiencing three simultaneous revolutions: new technologies producing the third industrial revolution; emerging communications technologies that make possible a global economy; and a worldwide movement toward capitalism. He compellingly argues that, although no firm or country is forced to participate in globalization, firms that choose not to will be driven out of business and nations will opt out of the development process. Thurow also analyzes threats to the globalization process, including a collapse of the dollar, the lack of international guarantees of intellectual property rights to stimulate technology development, and the lack of life-saving drugs necessary for development of the poorest nations. To be successful in the global economy, nations, like firms, need a technology strategy. Although no revolutionary ideas are presented, the analysis is thorough and the ideas thought-provoking. ... Read more

Amazon.com

Why do otherwise intelligent individuals form seething masses of idiocy when they engage in collective action? Why do financially sensible people jump lemming-like into harebrained speculative frenzies -- only to jump broker-like out of windows when their fantasies dissolve?We may think that the Great Crash of 1929, junk bonds of the '80s, and overvalued high-tech stocks of the '90s are peculiarly 20th century aberrations, but the excerpts of these two classics--first published in 1841 and 1688, respectively--show that the madness and confusion of crowds knows no limits, and has no temporal bounds. These are extraordinarily illuminating and, unfortunately, entertaining talesof chicanery, greed, and naivete. Essential reading for any student of human nature or the transmission of ideas.

In fact, cases such as Tulipomania in 1624--when tulip bulbs traded at a higher price than gold--suggest the existence of what I would dub "Mackay's Law of Mass Action": when it comes to the effect of socialbehavior on the intelligence of individuals, 1+1 is often considerably less than 1, and sometimes less than 0. ... Read more

Reviews (5)

Oh, Yeah!
Extraordinary Popular Delusions and the Madness of Crowds has been a favorite of mine for years, so while I'm happy to see it popularized, there's so much I miss! This is the first book of Urban Legends. There's so much to the book, and so much is so funny, and the financial stuff is the driest part of the book.

That said, I understand Fridson has a theme, and by using these two old works, one Victorian, and one Louis XIV, he shows that nothing much changes: people will do very stupid things if that's what everyone else is doing. More to the point, people will do very risky things with their money, if everyone else is doing so. Examples abound in these two great books, and Fridson doesn't miss a chance to make a point, and usually gets a good laugh in as well.

Tulipomania (when the price of tulip bulbs in Holland inflated beyond the ridiculous) is especially revealing, and though Fridson is using it to make a point about price inflation, I couldn't help thinking also about the marketing technique by which the public is convinced it needs something, then that something is doled out like Oreos to a diabetic. I'm thinking specifically of diamonds, but there are lots of examples.

Fridson pulls this altogether, and as big a fan as I am of Extraordinary Popular Delusions and the Madness of Crowds, the original work he has created by mating a part of it with the other work, and with his own explanatory text is a great book.

I am not an investor, and generally find economics petrifyingly boring, but this book was a fun romp. Even if you have no interest in finance, read this book just to have a good laugh at our species.

Tales of Great Greed and Fear, and Market Manipulation
The stories in this book will have appeal as long as human beings exhibit great greed and fear in their investing. Those traits will encourage people to manipulate those emotions to their advantage, and these tales will recur with new investments every few years or so. Some few winners will garner long-term wealth while most will lose their seats in this game of financial musical chairs . . . known as speculating in endless opportunity. Fast success draws attention, which draws new investors, which creates more fast success. The price takes off like a rocket ship to eventually crash to earth when it runs out of the fuel of optimism and greed.

No one can hope to be a successful investor without absorbing the stories of these timeless follies.

You will find in this book three sections from Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay in 1841, and Confusion de Confusion by Joseph de la Vega from 1680. The Mackay material describes the almost simultaneous Mississippi Scheme in France and the South Sea Bubble in England, as well as the earlier speculation in tulips in the Netherlands. Confusion de Confusion is a translation from the Spanish about speculation in Amersterdam in the securities of the Dutch East and West India Companies.

The Mississippi scheme involved the use of private bank notes to improve the French debt and currency that were eventually tied into investments in a colony in Mississippi. John Law, a Scotsman, was the originator of the scheme, which grew out of control when the French printed too much money and the Mississippi colony foundered. You can read more about this in the recent book, The Millionaire. The basic facts are more easily absorbed, however, in this volume. Following along shortly thereafter, the English began to speculate in stock in a monopoly to develop trade with the Spanish, also tied to reducing public debt. That became the South Sea bubble and the speculation was encouraged by the early success of stock investors in the Mississippi scheme in France. Tulipomania is considered the best of the financial parts of this book, and recounts the amazing heights that a single tulip bulb could bring (with a famous table of the buying power of a florin at thta time) and the problems encountered, such as when a sailor mistook a rare bulb for an onion and had it for his lunch! These three essays are about psychology, and do not go into the market details too much. The descriptions about how the government dealt with these disasters provide relevant information for regulators.

In Confusion de Confusion, there are four dialogues about how bull and bear markets can be manipulated and the consequences, in the context of speculation in hopes of gain for the new colonies and trade. These dialogues are superb examinations of how markets actually work, and will be an illumination to the new investor of who she or he may be up against. The lesson: Be sure you know the rules and think about how they could be used against you.

This book is greatly improved by a series of essays. One is by Peter L. Bernstein in which he makes comparisons of the current markets to these early essays. Herman Kellenberg's introduction explains many of the details of the Amsterdam markets very well to make the de la Vega material more accessible. I especially liked the introduction by Martin S. Fridson in which he points out some of the errors and hyperbole in the Mackay material, and puts that work into a current context. Without these essays, I would simply encourage you to seek out the originals instead of this book. But these modern essays will add a great deal to your understanding.

Mackay's book was reportedly a favorite of Bernard Baruch's, which has helped its popularity enormously over the last 70 years. After you read this book, I do recommend that you read the entire book. Although it is a tough slog in places, you will come away with a much better understanding of crowd psychology than these three sections alone will give you.

The fundamental mechanism for each of these mania is that a new investment opportunity arises that seems to offer great potential. No one is quite sure what the future will hold, and optimism takes over. The price starts to rise, and that attracts attention. As more people invest, the market rises more. That draws more attention and investors. This continues until either pessimism starts to balance excess optimism, or the market simply runs out of new investors. It takes ever more money to create the same growth, so the market eventually has to fall. Along the way, a few are smart and take out their money. The rest lose.

This mechanism occurs about once a decade. Some of the recent examples are Internet stocks in the 90s, biotechnology stocks in the 80s, the Nifty Fifty in the 70s, the conglomerates in the 60s, electronics companies in the 50s, radio companies in the 20s, utility trusts around 1900, railroads in the 1880s, and so forth back in time. The key lesson: If you think a mania will form, do your buying and selling very early in the game or ignore the game altogether and go into safe securities. Either one will work. If you want to split your money in half with half for speculation and half for safety, that would give you the best and safest route. Most people do not have the emotional discipline to sell in time, so it is dangerous to play. The markets will fall many times faster than they rose, so the time to escape is on the way up.

I hope you will buy and read this book, and share it with your children when they start to invest.

When you are done with the book, I also hope you will also consider where else mania take over. These occur in consumption patterns (not unlike tulip bulbs), activities (remember disco?), businesses (franchised door-to-door selling), and entertainment (quiz shows will come and go many times). Be sure you watch out for your exposure to these mania as well. Avoiding wastes of time and resources are an important part of achieving true growth.

Excellent Historical Perspective
This is a must read if you work in any kind of market-related profession. The historical perspectives offered in both books are well-written and provide ample documentation into the history of panics, manias and crashes.

The book, despite its age, holds up well against many modern books on the same topic and should definitely be considered a finance classic!

Indispensable Reading
Last week's over 25% percent decline in the Nasdaq surprised and scared all of us. . . ahh but not if you had read this book.

So after the meltdown we had this past week, I picked up the book and read it again over the weekend. Everything was put into perspective.

If I may borrow from the book, from the introduction by Fridson to be more specific, "Popular Delusions makes a forceful case that when a price trend is overdone, fine-tuned analysis becomes superfluous. Nevertheless, 'obviously' overvalued markets sometimes proceed to become even more overvalued. It is not a bad idea, therefore, to leaven Mackay's emphasis on mass hysteria with Joseph de la Vega's attention to the coldly calculating side of things."

You will understand why the even the most talented have been lured into the hysteria of joining the dot.com world for those lucrative (or at least they were)stock options which aren't worth much anymore and why they will never reach the highs that they experienced not too long ago. It's not mathematical, it's psychological. Crowd psychology actually.

So if you haven't yet read these classics that are truly timeless even a century and a half later, what are you waiting for?

A Parable for Today
This book has been around for over 100 years. The lessons of those events is applicable to the present time. I highly recommend it. ... Read more

Book Description

This is a history of how physics has drawn some inspiration from economics and how economics has sought to emulate physics, especially with regard to the theory of value.The author traces the development of the energy concept in Western physics and its subsequent effect on the invention and promulgation of neoclassical economics, the modern orthodox theory. ... Read more

Reviews (5)

Excellent Book
Mirowski's argument is that economists as it is practiced today is simply thermodynamics circa-1855. The neoclassical notion of "utility" is the thermodynamic notion of potential energy, which is a version of the vis viva of Kant. The Laplacian dream of a perfectly mathematizable, atomic world is preserved, as if mummified, in economics even though the mathematics (and the physics) is nearly 150 years old. Mirowski goes back to Adam Smith and notes that in Smith there is the same dream of a "social physics," except that Smith understood physics more as Cartesian vortices than Newtonian gravity. Mirowski has a very interesting story to tell, the basic problem is that he mixes it with his own homegrown theory of Western Civilization that only confuses the basic argument. The equation of body-motion-energy may or may not be a central motif in economic history, but that argument is separate from the very interesting story of economics as social physics. Too bad he didn't save his little pet theory for another book.

Imaginary worlds of theory
This fascinating upgrage of the author's earlier _Against Mechanism_ gives a severe account of the state of mathematical economics as it has been since the marginalist revolution. It is a reminder that mathematical technique and basic modeling are two separate activities and that understanding what it is that one is attempting to make into a science is not so easy. It is probably true no deterministic mathematical science of any type known is possible in a medium involving human consciousness. Yet the obsession to treat these different domains of discourse as analogous to physics or amenable to predictive science via the apparatus of differential equations simply refuses to die. It is a peculiar history, that some very good mathematicians of the nineteenth century, who understood the physics, found bizarre at the start, before the bad habits of phantom thinking became institutionalized. Mirowski's expose of the whole game is priceless, and almost unnerving. Hm, ideology perhaps Very important book.

Update
Since having reviewed this book in September 1999, I was inspired by it to resolve Mirowski's Thesis in a recent paper called 'The Futility of Utility' (Physica A,2000). My resolution shows that both Varian and Mirowski were partly wrong. Mirowski is right in one sense: when dynamics is taken into account in the theory of production then the generic case (nonintegrable dynamics) is that utility is a path-dependent functional, and so doesn't exist mathematically as a function of demand. In this case (as Osborne observed from empirical data) price as a function of demand does not exist (the 'cartoons' passing as graphs in Samuelson's textbook can't be constructed from real market data). Varian was wrong: the most trivial integrability conditions are violated in this case because utility as a function cannot be postulated but either exists or doesn't according to dynamics. On the other hand, Mirowski was wrong that an analog of kinetic energy, or even a conserved quantity, is required. Utility is not, as Mirowski believed, analogous to potential energy: it is analogous to what physicists call the action. When optimization-control dynamics (Hamiltonian dynamics in econometrics) is integrable, then the action is a function, not merely a path-dependent functional (see Liouville's integrability theorem, ca. 1880, also discussed in 1916 by Einstein in the context of why Bohr-Sommerfeld quantization fails).

A DAUNTING MASTERPIECE
Mirowski's incredible work deserves better than a 1000-word review by a layman. And yet the reviews of other economists have often been inept and misleading. (When a scholar allows a major mistake to see print, that's regarded as a pretty serious intellectual shortcoming. But there's a worse one. Accusing a scholar of making a major mistake he didn't actually commit. That's essentially what the well-known economist Hal Varian did in his review.)

As a history of the energy concept, MORE makes for facinating if demanding reading. An interest in economics is not at all required for that section of the book. Anyone with a little curiosity about physics and its history will be intrigued.

When it comes to criticizing neoclassical economics, Mirowski is in a class by himself. Witty but substantive zingers abound. Zingers that can't be dismissed as mere rhetorical potshots.

The grace and depth of MORE HEAT THAN LIGHT readily justify the effort required to finish it. Still, for laymen unwilling to tackle Mirowski, there is a pale substitute. Paul Ormerod's [spelling?] THE DEATH OF ECONOMICS. That's a breezy critique of neoclassical doctrine aimed at the general reader.

Whether you plan to ever look at it or not, buy Mirowski's book NOW. Forget rave reviews -- what he really deserves (to strike the proper, academic note)is your money.

Theoretical economics as pseudo-physics
This is an amazing book! It exposes what is hidden in Samuelson and every other economics text, namely, that the theory of equilibria and utility were merely lifted from physics (Hamiltonian dynamics) without any support from economic data. What is more amazing is the complete discussion presented by the author that 'utility' doesn't exist mathematically because the required differential form is nonintegrable. Economists and statisticians may not be able to undestand this point, but it should be familiar to researchers in dynamical systems theory. The inventors of marginal utility theory, Fisher, Walras, and Pareto, literally did not know enough mathematics to know what they were talking about. Equilibrium can't be reached in a Hamilton system (there is no friction to permit the approach to equilibrium), but this contradiction was no worse than all the others inherent in econo-pseudophysics.

This book should be read and understood by every economics student who reads Samuelson and asks: what has 'utility' to do with the data. A very good complementary book is Osborne's "The stock market from a physicist's viewpoint". Osborne introduced tha idea of lognormal stock prices (thereby paving the way for the Black-Scholes equation and derivatives trading). In his first two chapters, without the benefit of the historic perspective offered by Mirowski, Osborne explains why the supply-demand curves drawn by Samuelson are wrong and misleading, and then goes on to illustrate how one could obtain correct discrete plots real data. For example: if 25 tomatoes are available (supply) then what's the price? Clearly, there is no answer. Price does not exist as a function of supply, nor of demand (nonuniqueness). Osborne goes on to suggest that the three related assumptions of equilibrium, continous price changes and efficiency are not supported by the data, and observes that there are traders who make money out of the inefficiency of the market. Mirowski and Osborne are strongly recommended to anyone who wants to understand economics. ... Read more

Book Description

What drives our social mood? Our actions? Our motivations? Can we look into the make-up of the universe and apply it to who we are and what we do?The answers to these questions are to be found in the new science of socionomics.

Socionomics evolved from the Wave Principle, a theory of patterns in financial markets. Now Robert Prechter proposes that this very same principle can be applied to our own social and cultural lives. Prechter shows that dominant aspects of our unconscious mentation are characterized by measurable patterns.Those patterns form the building blocks of humankind's social interaction, and in turn, the Wave Principle.

"WOW stuff! Prechter is doing the most creative work that I have seen in my career on Wall Street." –John R. Greeley, professional market analyst, co-founder, Market Technicians Association"Spectacular. I was absolutely impressed. A most brilliant work." –David Johnson, PhD, MD

"Congratulations to Robert Prechter for his interesting, insightful and trail-blazing work. Anyone willing to take the time to read this volume will be rewarded with a new understanding of human behavior, markets and events." –Tom Spradley, retired college mathematics professor

"Learning about socionomics has proven to be one of those rare intellectual epiphanies that results in an absolute change in the direction of my life. So much about the human experience that had mystified me all of my adult life seems so clear now, so understandable – even to the point of being predictable." –Jack Hobson-Dupont, President, Monadyne Corp.

"I love this theory. Socionomics is sure to be a primary reference source for quite some time. The volume and value of analysis that Prechter has conducted is something hard to over-appreciate. There should be university courses and degrees in the science of socionomics and perhaps Nobel Prize winners as well. I recommend many readings of the book to appreciate it in depth." Professor Valeri Safonov, PhD, former First Secretary of Ministry of External Affairs of USSR and economist with the Russian Embassies in Canada and India ... Read more

Reviews (3)

Spooky feeling of a breakthrough into the unknown
Imagine you were one of the first people to look through a telescope - and you suddenly found out that the sky was not merely wallpaper. You would have known that the discovery was a breakthrough, but what would happen would be spooky to think about.

That's how I feel reading Prechter's book about the new science of Socionomics. The telescope made sense of the jumble of lights in the night sky, as well as strange events like eclipses. The new science of Socionomics makes sense of a huge jumble of information in financial markets as well as strange events like crashes, manias, fads and fashions. The personality of markets and societies is linked directly to how our brains respond to certain types of input.

It is also a book that stirs up the back of your mind - are we really as independant in thinking as we imagine ourselves to be: how strongly are we influenced by the society around us? The book shows frightening evidence that our brains are hard wired to respond immediately to impulses stimulated by the human herd.

Overall, the book is like reading about the first observations from telescopes - it is a spooky glimpse into a world right in front of our faces that we've not understood until now. If you read it thoughtfully, the book will be both unsettling and inspiring in its implications.

Flat Earthers vs: Round Earthers
If you use Elliott Wave in your investment analysis you know it works. If you try to point this out to a non-waver you feel like the round earth advocates must have felt 500 years ago defending their position to the flat earthers. After all it does look flat; and stock charts do just look like a bunch of squiggly lines.

After reading this book you begin to understand the science that is at work in Elliott Wave Theory, and believe me, they are not just a bunch of squiggles. Mr. Prechter makes his case brilliantly.

Incredible book!
As someone who is extremely interested in how the brain works and why we 'do what we do', as "rational" human beings, I found this book to be extremely compelling. I simply could not put it down. Prechter takes a huge compilation of material (from neuroscience, psychology, fractal anaylsis to technical stock market analysis) and boils it down into a beautifully written and fascinating look at how our mind and society is shaped and guided by an underlying mathematical pattern that is the foundation for all living systems.

We are lead by Prechter through a basic understanding of Ralph N. Elliott's Wave Principle - a technical method of stock market analysis Elliott discovered during the 1930's - and come to find that this pattern is fractal based, and not only indicates where the NASDAQ is going to go tomorrow, but shows us where we will go as a society!

This book is a must read for anyone studying brain function, psychology, or philosophy AND for the beginning and seasoned trader! I wish I had found this type of information years ago. ... Read more

Book Description

Over the past twenty years, the study of industrial organization--the analysis of imperfectly competitive markets--has grown from a niche area of microeconomics to a key component of economics and of related disciplines such as finance, strategy, and marketing. This book provides an issue-driven introduction to industrial organization. It includes a vast array of examples, from both within and outside the United States. While formal in its approach, the book is written in a way that requires only basic mathematical training. Supplemental materials posted on the Web make more extensive use of algebra and calculus. ... Read more

Reviews (2)

Outstanding.
The layout and content of this book is truly outstanding. Cabral's lucid explanations and balance of theory and examples, make this book a pleasure to read. The text also provides a much needed framework for thinking about the ambiguous term, "strategy." Several of the author's reviewers comment that this text is destined to become the definitive introductory text on the industrial organization and I support that view.

A clearly superior text
Just when you thought there was no need for another Industrial Organization textbook, L. Cabral has written a book so breathtaking lucid that it may stand as the definitive introductory textbook for a generation. The author adeptly combines classic industrial organization theory with the latest advances in research and modern examples. The result is at once current and timeless, and will surely engage the beginning student more than any book currently on the market, or any book likely to be written. A must have for any introductory industrial organization class. ... Read more

Amazon.com

Over 150 years ago, Scottish essayist Thomas Carlyle dubbed economics the "dismal science." But it certainly doesn't seem that way in the skillful hands of Todd G. Buchholz, author of New Ideas from Dead Economists. In this revised edition of a book first published in 1989, economics is accessible, relevant, and fascinating. It's even fun--for example, when he uses the cast of Gilligan's Island and Henny Youngman jokes to explain complex economic theories. "Why not have the last laugh on Carlyle by using the dead economists themselves to reverse their bad reputations and to teach the lessons they left to us?"

Buchholz surveys and critiques economic thought from Adam Smith's invisible hand of the 18th century to the depression-fighting ideas of the Keynesians and money-supply concepts of the 20th-century monetarists. He also relates classic economic principles to such modern-day events as the fall of communism, the Asian financial meltdown, and global warming. Buchholz includes plenty of anecdotes about the lives of the great economists: Karl Marx, for instance, was an unkempt slob; David Ricardo, the early-19th-century English politician and economist, was among the rare economists to get rich trading stocks; and Maynard Keynes was so homely his friends called him "Snout." Here's a lively and authoritative read for those interested in the past, present, and future of economics. --Dan Ring ... Read more

Reviews (18)

The economists are not all dead, and the ideas are not new
This is a very good book, but I was somewhat disappointed with it. The problem is the title, which is misleading. It should have been called "A Modern Interpretations of Some Great Economists". There are no new ideas, nor really any new interpretations of old ideas. Another possibility, to apply these ideas to contemporary situations, is done very superficially and with none of the wit and imagination the author uses in their exposition. As a professional economist, I did not find the book very useful. What the book is, is a very good introduction to the history of economic thought. If some day I give an economics course, in particular to non-economists, this book will provide its basis. The witty and light way in which some of the greatest ideas in economics are presented is very appealing. With a book such as this, the countless students who hate the subject of economics will see that it is a living and human endeavor. My congratulations to the author although I suggest he change the title.

Introductory Economics Text Par Excellence
The first time I read this distinguished work by Buchholz, I began the book having half forgotten the economics which I took at college level, and ended the book self-congratulating myself for picking up most of what I had forgotten. When I re-read the book, this time the economic theories that I was taught in a post-graduate course still fresh in my mind, I was in awe with the brilliance and clarity with which Buchholz explains the insights of economic theories without compromising the insight and depth of difficult concepts. As economics comes increasingly under the grips of ever more esoteric mathematics, Buchholz shows the path toward a refreshing style of describing economic behaviors, sans mathematica, without compromising the dazzling insights elucidated by gurus from Adam Smith through Alfred Marshall, John Maynard Keynes to present day giants in the field (e.g. Coase, Friedman, Buchanan). While Buchholz clearly intended the book for the layman, it is actually an introductory economics text par excellence.

Much Better Than Heilbroner's Worldly Philosophers
I've read both Worldly Philosophers by Robert Heilbroner and New Ideas From Dead Economists, by Todd Buchholz. I wanted to get a good rounded layperson introduction to great economists in the past.

First let me examine Heilbroner's book first since that's more widely known, has sold more, and more Economics 101 classes use it as a supplemental text. I'll then compare Heilbroner's book to Bucholz's and explain why I think Bucholz's book is far superior in every way.

I found Heilbroner's book to be neither useful to the layperson nor to people who have a good background in Economics. Let me explain.

Heilbroner spends a LOT of time in awe of these economists and spends a great deal of time explaining how great they were, how revolutionary, how brilliant, how much of a genius, how wonderful these men were, ad nauseum. Ok, I get the point. Unfortunately, all this fawning and fan worship clouds what should've been the more interesting and more important part of the book, which are the central economic ideas put forward by these thinkers. In fact, there's a lot of emphasis on putting their economic ideas in perspective to the prevailing moral philosophical thought at the time.

It's almost as if this books is written for people who have already taken Economics 101, and know all the basic economic principles and can nod, "yes, uh huh, I didn't know those personality quirks or their moral philosophical outlook about these economists - good to know. By the way, it's great that he didn't go over his economic ideas since I already know them."

For example, the entire chapter devoted to David Ricardo fails to mention the theory of Comparative Advantage anywhere in the chapter. Isn't that a MAJOR omission? That's just one example. Omissions such as this are everywhere.

So the layperson is stuck getting a vague feeling that these people were wonderful people, but that a little less fuzzy on their ecnomic ideas. It also leaves a person with economics background feeling like this is less a book about economics and more a book about Heilbroner's fan worship.

Neither audience is served. I can't recommend the Heilbroner book.

Right after I read this book, I read Todd Buchholz's New Ideas From Dead Economists.

Where Heilbroner failed, Buccholz succeeds in so many ways. He puts the central ideas of these economists as the main focus of each chapter. When talking about David Rircardo, the theory of Comparative Advantage is front-and-center. When talking about Marx, Heilbroner meanders and throws a lot of Marx's ideas around and you don't get a sense of how they all fit together in Marx's mind or why modern economists find fundamental flaws in his reasoning. In Buccholz's book, the central point is Marx's ideas, how they fit together and it's very clear why most economists (and the reader) will find Marx's basic premise wrong in light of emperical evidence. This goes on and on.

I initially thought Heilbroner would be a good read, since it was recommended by econ majors when I was in college and they'd never heard of Buccholz's book. I'm glad I read both.

Do yourself a favor - read the better book.

New Ideas from Dead Economists: An Introduction to Modern Ec
In an introduction explaining the plight of the economist--having to convey to popular political and social forces that in a world of scarcity one must choose--Buchholz implicitly illustrates his own dilemma. He improves upon Heilbroner's classic nonponderous history of economic thought, The Worldly Philosophers (6th ed., 1986), albeit at some sacrifice of breadth and depth. Nevertheless, his highly entertaining look at 200 years of economic thought via contemporary issues has far more hits than misses. His treatment of the giants--Smith, Marx, Keynes, is good, and the coverage of Marx, even before the political upheavals of the last 12 months, is devastating; the other standard names--Ricardo, Malthus, Mill, Marshall, Friedman, are all included; and, taken together, chapters 9 through 12 offer an excellent review of contemporary macroeconomic theories and issues. In a few instances, Buchholz's use of numerical examples seems awkward; some of his facts and formulations are wrong; and, despite the muted, somewhat flip apology with respect to the title (i.e., many of the economists he cites are living not dead), it's still a poor choice. But, everything being equal, as economists are wont to say, it does not get any better than this, and Buchholz deserves, and will certainly get, much credit for this solid contribution to our understanding of both the economists and the issues. Academic and public library collections.

Perfect intro to economics!
This is the most delightful book - I'm finding myself recommending it to everyone! I am a first year law student, and don't have much time to read outside of class. I took no economics courses in undergrad, and wanted to learn a little about economic theory on my own... I'm SO glad that I found this book, because it is really a pleasure to read. In addition to be humorous and very informative, it is a great learning aid because the author writes in a way that makes it easy to remember the material. Even my husband - who knows a lot more about economics that I do - is enjoying the book. I highly recommend this book for anyone interested in the subject (or, actually, to anyone who thinks they are NOT interested in economics too)!! ... Read more

Book Description

David M. Kreps has developed a text in microeconomics that is both challenging and "user-friendly." The work is designed for the first-year graduate microeconomic theory course and is accessible to advanced undergraduates as well. Placing unusual emphasis on modern noncooperative game theory, it provides the student and instructor with a unified treatment of modern microeconomic theory--one that stresses the behavior of the individual actor (consumer or firm) in various institutional settings. The author has taken special pains to explore the fundamental assumptions of the theories and techniques studied, pointing out both strengths and weaknesses.

The book begins with an exposition of the standard models of choice and the market, with extra attention paid to choice under uncertainty and dynamic choice. General and partial equilibrium approaches are blended, so that the student sees these approaches as points along a continuum. The work then turns to more modern developments. Readers are introduced to noncooperative game theory and shown how to model games and determine solution concepts. Models with incomplete information, the folk theorem and reputation, and bilateral bargaining are covered in depth. Information economics is explored next. A closing discussion concerns firms as organizations and gives readers a taste of transaction-cost economics. ... Read more

Reviews (5)

It's a game theory approach
Anyone who reads this book and expects traditional micro is an idiot. Kreps is one of the main movers and shakers of game theory over the past 30 years and this text reflects that. If you want more quant and trad micro, go to Mas-Colell or, at a somewhat less intense level, Varian.

Nice but....
Well: I've given four, but it actually would deserve 3.5, in my opinion. Anyway, instead of giving three I've finally decided it would have been nicer to round up the average a little toward the maximum: this, in order to be fair.

In fact, this IS - in my opinion - a nice microeconomic text: I would define it a good "Introduction to Advanced Microeconomic Theory". I add that I'm asserting this, not from the point of view of the PhD economics or business administration student: but from that of the theoretical physicist interested in economics, who - some eight years ago - was looking for a really good introductory text in microeconomics.

For "really good introductory", I mean a text written with the exactness and rigour standards I'm accustomed to: i.e., the kind of rigour one would find in an advanced undergraduate or graduate text in mathematics. This, because, let's face it: I think it's impossible to really explain/learn the formal apparatus of modern microeconomics without a formal and precise statement of every concept and the exact derivation of every property in the typical "definition-and-theorem-and-proof", hypothetico-deductive style one would find in a serious mathematical analysis text. All in all, this is what modern microeconomics is about: a formal apparatus, conceptually (even if quite remotely, by now, and with a lot of other contributions from elsewhere) derived from that of analytical mechanics. And as it would be funny to think one could learn a.m. in some sucker text, verbal, verbose and falsely simple, so IMHO it would be kind of a self-deception to think one could learn the real microeconomics thing in one of those books à la "intermediate microeconomics" and the like. I'm really sorry with the authors of all the books falling into this latter cathegory, but I honestly believe things stand more or less this way. Of course, my point here is about the pedagogical style in which these introductory books are written: NOT about the (great) authors of the books. It's the same sort of complaint I make toward the introductory books in elementary physics, or toward mathematical analysis taught by means of "the calculus-way" ^_^;;;

Now, to come back to Kreps, this is the book with which I've begun to see some sort of light in the otherwise quite intricate - per se - but superficially stated (I'd say "superficially intricate") bunch of concepts one can find in any intermediate or introductory text. From this point of view, I'd give it five stars: precise and clear, with well-defined concepts, formal derivation of the main results and, above all, the constant use of the mathematical apparatus of infinitesimal calculus, which I believe makes things a lot more clear indeed. [And here I would address every undergraduate or first year graduate student, to say: you don't have to fear mathematical analysis! When it is correctly used (I mean: when there is some substance behind equations, and mathematics isn't used to try to hide some conceptual emptiness lying behind: which, and once more I'm sorry with the economists, is quite often what I'm tempted to think when I try to delve into some recent "high theory" paper) mathematics isn't but a way of summarizing concepts which, otherwise, would need lots of pages of words to be stated. Try always to go under the surface of the equation or the formula, and to grasp the concept lying behind. It could take a lot of effort to succeed in doing so: but after a while, everything will look simpler :) ]

But, and here are the "cons", in my opinion Kreps hasn't had the courage to go to the very end of his attempt: so it seems like he leaves things half-way, and very often looses himself in a lot of words which probably could have been avoided if he had decided to go completely formal. From this point of view, two stars. And then, to sum up, three and a half :D

The kind of book I have in mind, in the aforementioned formal fashion, isn't - as one might logically conclude from what I've been saying to this point - the enormous Mas-Colell, et al.: on which I still have to make up my mind. I'm rather thinking about Edmond Malinvaud's "Lectures on Microeconomic Theory", North-Holland, ISBN 0-444-87650-2, in my opinion a true five stars (cum laude), a sort of microeconomical analogue of Walter Rudin's "Principles of Mathematical Analysis": which, by the way, I believe is by far the best book in introductory mathematical analysis one can find around (alas!!... if only he had included also a chapter on differential equations, at least at the introductory level!!!).