The Present State of Consumer Theory: The Implications for Social Welfare Theory / Edition 3

by Timothy P. Roth

Overview

The neoclassical theory of choice is an integral part of a large and growing literature. Its elegance, simplicity and apparent generality appear, increasingly, to influence the thinking of psychologists, sociologists, and political scientists. At the same time, the theory is subject to robust attack. The theme of the book is that the critics have it right. Account must be taken of the endogeneity of preference and value structures, of decision makers' cognitive limitations, of information asymmetries, of opportunistic behavior, and of positive transaction and decision costs. Yet these considerations militate against the specification of both the efficiency frontier and the Social Welfare Function. This, in turn, suggests that Social Welfare Theory is an inappropriate guide for the formulation of distributional and other economic policies. A corollary is that economists' (and others) attention should center less on 'getting the prices right' and more on 'getting the institutions right'.

Product Details

ISBN-13:	9780761809449
Publisher:	University Press of America
Publication date:	12/29/1997
Edition description:	Third Edition
Pages:	236
Product dimensions:	5.52(w) x 8.50(h) x 0.67(d)

About the Author

Timothy P. Roth is A.B. Templeton Professor of Economics and Finance at the University of Texas at El Paso.

Editorial Reviews

Undertakes systematic investigation of new ideas concerning demand theory such as bounded rationality and the roles that transaction costs, asymmetrical information, and opportunism play in shaping economic behavior. Several models of consumer behavior are examined in detail. Annotation c. by Book News, Inc., Portland, Or.

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