Description
Book SynopsisRecent years have seen the development of new theories of market failure based on asymmetric information and network effects. According to the new paradigm, we can expect substantial failure in the markets for labor, credit, insurance, software, new technologies and even used cars, to give but a few examples. This volume brings together the key papers on the subject, including classic papers by Joseph Stiglitz, George Akerlof and Paul David.
The book provides powerful theoretical and empirical rebuttals challenging the assumptions of these new models and questioning the usual policy conclusions. It goes on to demonstrate how an examination of real markets and careful experimental studies are unable to verify the new theories. New frontiers for research are also suggested.
The first systematic analysis of these important new theories, Market Failure or Success is required reading for all who seek to better understand one of the most exciting debates in economics today.
Table of ContentsContents: INTRODUCTION 1. Introduction Tyler Cowen and Eric Crampton PART 1 NEW MARKET FAILURE THEORIES 2. Toward a general theory of wage and price rigidities and economic fluctuations Joseph E. Stiglitz 3. Keynesian economics and critique of first fundamental theorem of welfare economics Joseph E. Stiglitz 4. The market for ‘lemons’: quality uncertainty and the market mechanism George A. Akerlof 5. Path dependence, its critics and the quest for ‘historical economics’ Paul A. David PART 2 THEORETICAL RESPONSES 6. Information and efficiency: another viewpoint Harold Demsetz 7. Efficiency wage models of unemployment: one view H. Lorne Carmichael 8. Do informational frictions justify federal credit programs? Stephen D. Williamson 9. The demand for and supply of assurance Daniel B. Klein PART 3 EMPIRICAL AND EXPERIMENTAL RESPONSES 10. Beta, Macintosh and other fabulous tales Stan J. Liebowitz and Stephen E. Margolis 11. Some evidence on the empirical significance of credit rationing Allen N. Berger and Gregory F. Udell 12. An empirical examination of information barriers to trade in insurance John Cawley and Tomas Philipson 13. A direct test of the ÔlemonsÕ model: the market for used pickup trucks Eric W. Bond 14. Public choice experiments Elizabeth Hoffman 15. Non-prisoner’s dilemma Gordon Tullock 16. Group size and the voluntary provision of public goods: experimental evidence utilizing large groups R. Mark Isaac, James M. Walker and Arlington W. Williams 17. Cooperation in public-goods experiments: kindness or confusion? James Andreoni Index
