Oprah meets a grizzly

Microeconomics and Behaviour. Fourth Edition - Microeconomics. Second Edition
May 26, 2000

By now, the narrow core of microeconomics approaches a set body of knowledge, to the point where a textbook can be not unlike a manual of plumbing or electrical wiring. It is very unlikely that anyone with substantial experience of teaching microeconomics would turn in a faulty or totally useless textbook.

This is borne out by the present offerings. So, what distinguishes either of these from any rival text and why should a student shell out the near £30.00 required in this age of copious handouts and cheaply available internet material? For example, David Friedman's complete text Price Theory: An Intermediate Text is on the internet at zero cost. Product differentiation and sales advantage thus comes from augmenting value with entertaining content or broadening the scope beyond narrow-core microeconomics.

It is harder to broaden scope when the text belongs firmly to the introductory level, hence Timothy Tregarthen and Libby Rittenberg's text sets off firmly down the road of razzamatazz. The frequent intrusion of full-colour pictures includes such highlights as a grizzly bear and Oprah Winfrey. The text is also "pre-highlighted" in yellow, simulating the practice of American students who sometimes advertise their second-hand books as "highlighted by an 'A' student". The book is generally sound - although the illustration on smoking and murder, early on in the book, misses the obvious link that smokers may have higher risk preference and therefore be more likely to get murdered. It seems to me that the hard sell is maybe too hard, with the authors being so keen to make economics exciting and applicable that students are at risk of leaving the book converted to aggressively dogmatic rational-choice imperialism. If they go on to do more economics, it may be that exposure to the right intermediate text, such as that by Robert Frank, will temper such extremism.

Frank gives an excellent guide to the tried-and-tested core, but still expands his horizons in his large and wide-ranging book. This is flagged up in the words "and behaviour" in the title of his text. This focus derives directly from his own highly acclaimed research, which results in heavy criticism of narrow rational-choice economics as early as the preface. Frank makes an impressivejob of integrating the more "behavioural" - albeit still a neoclassically grounded one - slant into the sections on consumer choice, which form the first part of the book. Notably, he provides not only a detailed account of the subjectiveexpected-utility model (which many texts at this level omit) but also a concise introduction to alternatives, based on the work of Amos Tversky and associates, which explain many of the paradoxes found indecision-making under uncertainty.

Reading further brings to light a curious dichotomy, as the production and distribution chapters are very much in the old "mechanistic" tradition, with no allusion to transaction costs, approaches to the firm and labour markets, which would bring these sections in line with the more "behavioural" tone of the first part of the book. Indeed Frank gives little consideration to non-profit maximisation models and seems strongly inclined to defend the profit-maximisation assumption.

Samuel Cameron is lecturer in economics, University of Bradford.

Microeconomics and Behaviour. Fourth Edition

Author - Robert H. Frank
ISBN - 0 07 116947 4
Publisher - McGraw-Hill
Price - £29.99
Pages - 672

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