Customer Reviews

Microeconomic Theory

5 star:		(28)
4 star:		(7)
3 star:		(12)
2 star:		(8)
1 star:		(6)

 

 

a classic book of microecomomics. I bought this and will keep it on my shelf so that I can look up or refer to it whenever I get questions in microecomomics

There appears to be a significant difference in opinions regarding the approach used by MWG. I believe that at the end of the day one has no choice but to conclude that the mathematical dependence by MWG is not conducive to critical thinking. Such a conclusion reveals the tragedy of modern day economics: mathematical elegance is preferred to practicality and intuition.

The main question that a reader of this book should ask is: Does MWG present a framework of analysis that enhances an individual's ability to develop economic policy that can effectively address the economic problems we face in the real world?

I believe that the answer is unambiguously NO. Instead, this book represents all that is wrong with modern day economics. That is to say that the real world plays a minimal role in MWG. In fact, most economists seem increasingly less and less concerned with solving real world problems. A look through most mainstream journals reveal that many economists enjoy inventing mathematical problems and presenting a clever mathematical solution to them. Whether what they have produced contributes to our knowledge about how the world works is rarely, if ever, a consideration.

Economists need to decide whether they want to be theorists or contribute to policy. These two roles require significantly different skill sets. Unfortunately, to pursue graduate studies in economics, students are required only to learn the mathematical tools for theory; there is no requirement or real inclination in graduate schools to instill students with a firm understanding of the political economy that goes on in policy work. This explains why macroeconomics and econometrics has proved to be increasingly unhelpful, and many cases causes damage, when used in practice.

The book presents a very complete treatment in theoretical microeconomics. It is rigorous but plenty of explanations and examples.

Some readers complain about the lack of real world examples and the math level. Well, the book is intended for graduate students in economics and requires full command of calculus in several variables, nonlinear optimisation (Kuhn-Tucker), and some concepts in real analysis. Without, this background I understand it may be painful to read it. One advice is reviewing the mathematical appendix and using a complementary text like Simon&Blume. Once you get used to this the story changes a lot (own experience).

It is true that you don't find here many real world examples, but simply the book is not intended for this purpose. If you want this try another one.

In sum, if you want a good background in theory this is the benchmark (I've read Varian also and some parts of Kreps).

Most people complaining about the level of math do apparantly not realize that the mathematics used in graduate textbooks on economics is quite elementary. This means, if you don't know the tools needed to understand MWG, read an optimization text like sundaram and you will be ready. No prerequisites for that. it is funny to read all the reviews complaining about the lack of intuition. You guys do not have any idea of what science is about.

Put it this way: my Dad opening the book, thinking that it might be interesting, and said, "Yaaahh!!", not in ectasy but in agony. There's more notation in the book than words. It's terse. It's huge, and it's scary. I really hate this book. It gets worse as you go farther along. (Otherwise) simple concepts are made a mystery by the tricky wording and endless proofs. I'm sure that the trio made a lot of money off the book, yet another example of those who know that they can profit from the misery of others. JERRY TOOK THE FALL!!!!!!!!!!!!

This book does an excellent job of representing cutting edge economic theory. Economic theory now consists largely of commonsense propositions that academics translate into the least comprehensible form. Instead of clear and concise verbal logic that most anyone can understand, Mas Colel, Whinston and Green employ sophisticated math models. Why?

I have heard many arguments in favor of this approach. 'Verbal logic is not logical'. 'The verbal approach is too easy'. 'You can only understand economics using math'. 'Math models are really cool'. 'Math is formal'. 'You need to learn the tools of mathematical analysis so you can read professional journals'.

The fact if the matter is that one can depict complex concepts either with words or with math. Math does not guarantee necessarily deliver the right answers. Some math models 'prove' that markets are efficient, others 'prove' that markets fail. This proves only that some math models must be dead wrong. As for formalism, this is an application of the fallacy of style. The validity of any idea never depends upon the manner in which we present it. As for reading journals, the argument that we must learn math modeling because we cannot read journal without it begs the question. Why do we need complex math models in journals?

We do not. Logic is logic, verbal or mathematical. Of course, verbal presentations can be flawed too, but anyone who dismisses the verbal approach for this commits the fallacy of false comparisons. There are bad uses of math too. The verbal approach is superior because more people can understand it more easily. The 'formal' approach in this book also tends to distract academics from real issues. The notion of competitive equilibrium is a mere thought experiment that has absolutely no relevance to the real world. Yet, many economists focus their attention on constructing ever more sophisticated Walrasian thought experiments. What does this accomplish?

Unfortunately, many enter the economics profession simply because they enjoy solving systems of mathematical equations. Some like solving math models for the same reasons that others like solving cross word puzzles- it's a game! For others, constructing math models is a contest to see who can perform the most spectacular intellectual gymnastics. Is this what tuition and taxes should fund? Some also contend that they can use math models for central planning. Since we now all know that socialism does not work, that argument fails too.

The net result of the approach of this book is that many academic economists are doing work that is not worth the paper it is written on. Many Econometricians and Economic Historians do interesting work. Few theoretical economists write things that are worth reading these days. Obsession with math modeling has made cutting edge theoretical economics largely irrelevant, except to those who like playing math games. It is also the fact that some formalists fail to understand even the most basic principles of economics, even in their own fields. They are too busy working out formal proofs, like the ones that litter this book, to bother with the concepts that math is supposedly indispensable for understanding. This book stands as a monument to these sad facts.

The style of this book is [bad]. It teaches students the toys that they can use to perform intellectual gymnastics as academics. The authors do work a few substanative concepts into their math. Unfortunately, the substance of this book is almost as poor as its presentation. The authors demonstrate little understanding of the transactions costs/property rights economics developed by Coase, Demsetz, and Alchian and no understanding of Hayek's knowledge problem. This books discussion of public goods and monopoly suffer from a lack of understanding of these concepts. There is little Public Choice in this book. They take a run through the Arrow theorem, but that's about all you will find on Public Choice here. Real institutions and processes get almost no play in this book. The best parts are the parts on game theory. Here the authors stray away from their useless thought experiments and hit on some real issues. There are vastly superior books on game theory, so this bright spot hardly makes up for this books general deficiencies.

If you are unfortunate enough to get this book assigned to you in a class, you will have to plow through it (as I did). Otherwise, reading it is a complete waste of time. ...

In its coverage and depth, this book needs help from only several other books such as Fudenberg and Tirole's(Game), Freixas and Rochet's(Banking), Tirole's(IO) and Salanie's(Contract) in the standard topics of microeconomic theory.
In the meantime, this big book provides relatively unified and consistent core in "mathematical analysis"-like terms and tones. This may make the students frustrated and bored. Simply, this problem can be fixed in only one way. "Stand and Be accustomed!"

One thing is that we'd better get accustomed to Real Analysis, Functional Analysis, Vector Analysis and the like.

This is a really good book for those who are taking graduate courses or comprehensive exams in Microeconomics. It covers almost everything one needs to know about microeconomics and can be used as a reference book. It sure gets into technicalities too, but one has always the option to skip them and focus on general ideas. Only that the "Game Theory" section is not the best you can find. Some complementary texts is recommended for that section.

Just like Samuelson's introductory text was for many years a standard in undergraduate economics courses, so is MWG the canonical choice for first-year graduate microeconomics. It is a comprehensive treatment that leaves out neither the rigorous mathematics that the subject deserves nor discussions of the applications and intuition, and while the size can be intimidating, instructors generally only choose the chapters most appropriate to their own exposition. The only quibble about the book is that while it covers the 50-year-old foundations but does not go into new developments of microeconomics too much, for which I would suggest _The Structure of Economics_.

Many reviews below state that you need a lot of mathematical sophistication to read this book. Well, the fact is that the only prereqs you need are multivariate calculus, linear algebra, a (tiny) bit of set theory, and the KT theorem (which is in the appendix anyway). Every grad student in economics should already know all that stuff, so I don't see what the fuss is about. Moreoever, the ratio of discussion to mathematics in the book is extremely high. The idea that the authors are trying to "show off" their math talents is ludicrous; take a peek in Mas-Collel's "Theory of General Economic Equilibrium : A Differentiable Approach" to get an idea of how simplified the treatment given in MWG is.

There are also a lot of reviews below which criticize the text simply because they don't like microeconomic theory. This book is a textbook, not a research publication, so I don't see how that is a fair criticism. Anyway, what those reviews fail to mention is that MWG present several *negative* results about the power of microeconomic theory (see eg ch. 17) which do not typically appear in micro textbooks, so you can hardly accuse the authors of harboring some kind of ideological agenda.

Anyway, I think this book is generally pretty good, although the quality varies a lot in different sections. The best section is definitely Part 4 (general equilibrium). In particular, ch. 17 is very nice. Part 1 (individual choice) is also good. The other parts are ok. Unfortunately several of the exercises in part 3 did not provide enough information to obtain a solution, which was very irritating. It is clear that the authors have not solved all the problems themselves. The solution manual is also incorrect in several places.

I do like this book, but the biggest problem for me is that the theory often ends up seeming clunky and inelegant. I would like to see a more terse treatment than is given in this book, without any sacrifice of rigor. Several of the more peripheral topics could surely be omitted. Also there are a lot of examples that could go, and a lot of redundant discussions too. Some of the proofs seem to go on forever, when in fact the essentials could be communicated in a much shorter space. Chopping a lot of stuff out would help to make the book more readable and less heavy. Basically I would like to see the book written more in the flavour of Debreu's "Theory of Value".

Anyway, I can't think of a better text for first year graduate econ students.