Underground Economics: A Decade of Institutionalist Dissent

Underground Economics: A Decade of Institutionalist Dissent

Underground Economics: A Decade of Institutionalist Dissent

Underground Economics: A Decade of Institutionalist Dissent

Synopsis

In this book, Professor Kreps presents a first course on the basic models of choice theory that underlie much of economic theory. This course, taught for several years at the Graduate School of Business, Stanford University, gives the student an introduction to the axiomatic method of economic analysis, without placing too heavy a demand on mathematical sophistication. The course begins with the basics of choice and revealed preference theory and then discusses numerical representations of ordinal preference. Models with uncertainty come next: First is von Neumann- Morgenstern utility, and then choice under uncertainty with subjective uncertainty, using the formulation of Anscombe and Aumann, and then sketching the development of Savage's classic theory. Finally, the course delves into a number of special topics, including de Finetti's theorem, modeling choice on a part of a larger problem, dynamic choice, and the empirical evidence against the classic models.

Excerpt

This anthology is about institutional economics and its relation to the mainstream of the economics discipline--neoclassical economics. the collection also addresses industrial capitalism and the rising power of the corporation in the economy and society. the issues dealt with here are usually avoided by mainstream economists, but are faced squarely by the institutionalist dissenters working in the underground of the discipline. These issues are what compelled me, twenty years ago, to join the underground and to go down to the University of Texas at Austin to study institutional economics. When I got there, in 1970, institutionalism was being removed from the graduate curriculum, but not quite fast enough to spare me from its temptations. in spite of the rigorous training and orthodox indoctrination I received there, enough substance was left for me to get a good taste of the forbidden fruit. Once I had sinned, by taking a big bite out of Professor Wendell Gordon's course offerings, I was beyond redemption. I graduated with my union card (the Ph.D.) and started sinning with abandon--started writing these essays, that is.

Quite simply, the issues dealt with in the underground are the significant ones, the ones that make a difference, the ones that are more important than determining the slope of a hypothetical demand curve or the t-statistics of a static model of the steel market. Joining the underground freed my mind and satisfied my curiosity. I have also made a lot of friends down here, so it has been well worth it, and besides, it has been a lot of fun. Forbidden fruit is always the sweetest. Come... take a bite.

The introduction--The Underground Tradition: Institutional Economics at the Opening of the Twenty-first Century--has been written specifically for this volume. the Introduction describes what institutional economics is all about and puts the essays in the anthology in the appropriate context. the essays first appeared in the institutionalist-oriented academic journals, mostly the Journal of Economic Issues. They have come out over the space of the last twelve years . . .

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