Famous Allegories in Economics: The Myth of Market Failure

Author: Daniel S. Spulber (USA)
Publisher:
Publish Date: 2004-02-22
Features: The Famous Anecdotes of Economics critiques some of the cherished stories about market failures. Economists have used these elaborate anecdotes to justify broad government intervention in the economy, including the provision of public goods and services, industrial regulation, and antitrust actions against large corporations. Despite the fact that these gaudy and loud anecdotes are fundamentally flawed and inaccurate, their appeal in the fields of economics, law, and management has not diminished—they are still cited countless times in classrooms, textbooks, and academic discussions. The anecdotes examined in this book include the lighthouse, the keyboard, the bees and orchard, the General Motors merger with Fisher Body, the Freedom and learning curves, predatory pricing, and the tulip mania. This thought-provoking book reveals that many of the anecdotes beloved by economists are merely myths, and it raises fundamental questions about the role of government in society. Whether you are an ordinary reader, a student, a professional in the field of economics, or an academic, you will be able to understand the arguments presented in this book. The articles included in this book demonstrate that the economic analysis of market failures should be based on a systematic study of institutions and transaction costs, rather than relying on unrigorous anecdotes.