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Readings in Applied Microeconomic Theory: Market Forces and Solutions


Readings in Applied Microeconomic Theory: Market Forces and Solutions presents both classic articles fundamental to microeconomic analysis as well as modern treatments of frontier issues in applied theory. Complementary standard textbook treatments, the readings and their bibliographies offer further coverage of fields such as game theory, decision making under uncertainty theory, and auction theory.

Designed for students in advanced microeconomic theory, the book is accessible to students with diverse mathematical backgrounds. Although some selections contain mathematical treatments higher than the standard advanced level, all text presentation can stand alone to explain the material.

The book concentrates on the forces generated by the market economy and the nature of the solutions created to deal with them. Kuenne's complementary Readings in Social Welfare: Theory and Policy examines solutions to social welfare issues.

Robert E. Kuenne is Emeritus Professor of Economics at Princeton University and Director, General Economic Systems Company. His research focuses on general economic equilibrium theory, oligopoly theory, spatial theory, and defense economics. The author of numerous scholarly articles and 18 books, he is Associate Editor of the Journal of Regional Science and a board member of many acclaimed journals. He holds his Ph.D. from Harvard University, has received an honorary Ph.D. degree from the University of Ume?, Sweden, and has lectured and consulted widely.
Notes on Editor and Authors.



Part I: Models, Methods and Challenges in Microeconomic Analysis.

Introduction and Integration.

1. Robert E. Kuenne, "On Methodologies in Modern Microeconomics" (original).

2. Herbert A. Simon (1959) "Theories of Decision-Making in Economics and Behavioral Science," American Economic Review.

3. Donald N. McCloskey (1983) "The Rhetoric of Economics," Journal of Economic Literature.

4. Daniel M. Hausman (1989) "Economic Methodology in a Nutshell" Journal of Economic Perspectives.

Part II: Consumer Behavior.

Introduction and Integration.

A. Under Conditions of Certainty.

1. Gary S. Becker (1965) "A Theory of the Allocation of Time," The Economic Journal.

B. Under Conditions of Uncertainty.

1. George Akerlof (1970) "The Market for Lemons: Qualitative Uncertainty and the Market Mechanism," Quarterly Journal of Economics.

2. Charles. T. Clotfelter & Philip J. Crook (1990) "On the Economics of State Lotteries," Journal of Economic Perspectives.

Part III: The Firm's Decision Making in Differing Market Structures.

Introduction and Integration.

A. The Firm's Decision Making Under Certainty: All Market Structures.

1. H. Leibenstein (1966) "Allocative Efficiency vs. X-Efficiency," American Economic Review.

2. P. Milgrom & M. Roberts (1990) "The Economics of Modern Manufacturing," American Economic Review.

B. The Firm's Decision Making Under Certainty: Perfectly Competitive Markets.

1. George J. Stigler (1957) "Perfect Competition, Historically Contemplated," Journal of Political Economics.

2. Paul Milgrom & Robert J. Weber (1982) "A Theory of Auctions and Competitive Bidding," Econometrica.

C. The Firm's Decision Making Under Certainty: Monopolistically Competitive Markets.

1. Michael Spence (1976) "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies.

D. The Firm's Decision Making under Certainty: Oligopoly Markets.

1. Richard J. Gilbert (1989) "The Role of Potential Competition in Industrial Organization," Journal of Economic Perspectives.

2. Severin Borenstein (1991) "The Evolution of U.S. Airline Competition," Journal of Economic Perspectives.

3. Robert Gibbons (1997) "An Introduction to Applicable Game Theory," Journal of Economic Perspectives.

E. The Firm's Decision Making Under Certainty: Monopolized Markets.

1. Keith Cowling & Dennis Mueller (1978) "The Social Costs of Monopoly Power," Economic Journal.

F. The Firm's Decision Making Under Uncertainty.

1. Mark V. Pauly (1968) "The Economics of Moral Hazard: Comment," American Economic Review.

2. Michael Spence (1973) "Job Market Signaling," Quarterly Journal of Economics.

3. Stephen A. Ross (1973) "The Economic Theory of Agency: The Principal's Problem," American Economic Review, Papers and Proceedings, 63.

4. Mark J. Machina (1987) "Choice Under Uncertainty: Problems Solved and Unsolved," Journal of Economic Perspectives.

5. Charles A. Holt & Lisa Anderson (1996) "Understanding Bayes's Rule," Journal of Economic Perspectives.

Part IV: The Market Economy as a Whole. .

Introduction and Integration.

G. The Integrated Market Mechanism.

1. R. A. Radford (1945) "The Economic Organization of a P. O. W. Camp," Economica.

H. Social Welfare Judgements.

1. R. C. Lipsey & Kevin Lancaster (1956) "The General Theory of the Second Best," Review of Economic Studies.

2. Garrett Hardin (1965) "The Tragedy of the Commons," Science.

3. Amartya Sen (1995) "Rationality and Social Choice," American Economic Review.

I. Dynamics of the Market Mechanism.

1. Paul M. Romer (1996) "Why Indeed in America? Theory, History and the Origins of Modern Economic Growth," American Economic Review.

Part V: The Role of Government.

Introduction & Integration.

J. When Markets Fail or Falter.

1. James M. Buchanan (1995) "An Economic Theory of Clubs," Economica.

2. Steven N. S. Cheung (1973) "The Fable of the Bees: An Economic Investigation," Journal of Law and Economics.

K. Regulation.

1. Alfred E. Kahn (1988) "Surprises of Airline Deregulation" American Economic Review.

2. Jeffrey A. Miron & Jeffrey Zwiebel (1995) "The Economic Case Against Drug Prohibition," Journal of Economic Perspectives.

3. W. Kip Viscusi (1996) "Economic Foundations of the Current Regulatory Reform Efforts," Journal of Economic Perspectives.

L. Managing Public Assets.

1. John McMillan (1994) "Selling Spectrum Rights," Journal of Economic Perspectives.

R. Preston McAfee & John McMillan (1996) "Analyzing the Airwaves Auction," Journal of Economic Perspectives.