A Course in Microeconomic Theory

Rating:
Summary: Apart from the Rest...
Review: A Course in Microeconomic Theory is one of the best mainstream price theory texts available. There are mistakes in this book. Kreps takes Walrasian equilibrium a bit too seriously. He admits to the unreal nature of important parts of Walrasian equilibrium. He admits that it does not tell us how markets work, and that it omits important institutions, like money. Kreps refers to the Walrasian Auctioneer as fairly unrealistic (p 195), when the adjective utterly might be more fitting.

He also takes 'benevolent social Dictators' too seriously. The next edition of this book would be much superior if the author were to pay more attention to Public Choice theory.

However, he does explain economic concepts fairly well. This is not just an exercise in mathematical games. Much of the math that he uses is game theoretic. Kreps included an entire section on game theory. He uses more math than one really needs to understand economics, but the math that he does use is the most useful there is.

There is an entire section on information economics. It goes farther than most other price theory texts in discussing this important topic.

This books biggest strength is its' section on transaction costs theories of the firm. Here the author remedies much of the unreal character of price theory. This alone sets it apart from other mainstream texts.

This book is the best at teaching mainstream economics. Kreps is modest in his claims about the realism regarding standard models of competitive equilibrium, and explains concepts and techniques well. He also focuses on the many of the right concepts and techniques. The main defect in this book is that it does not go far enough in adding realism to price theory.

Rating:
Summary: It's a game theory approach
Review: 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.

Rating:
Summary: It's a game theory approach
Review: 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.

Rating:
Summary: Excellent first-year graduate text on choice and game theory
Review: The quality of the text is very uneven. The foundations of choice theory and game theory are presented with great clarity and insight. This would have been enough to get five stars. Alas, the author yielded to the temptation of trying to make it a comprehensive first-year microeconomics text (instead of a complement to, say, Varian's Microeconomic Analysis). The parts on traditional topics like cost and demand functions, partial and general equilibrium have all the flavor of an after-thought addendum. That lost it one of my stars.

Rating:
Summary: Nice but....
Review: 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!!!).

Rating:
Summary: Save your money
Review: You are better off spending your money elsewhere. This book is not well written, and gives cursory treatment to many important areas of Micro theory. Compared to the other dominant Micro texts, it falls way short.