Alternatives and Supplements: Fun on the
Internet
(For an explanation of what this page is all about, read
the explanation at the bottom.)
Information, Risk & Exclusion
Economist have actually asked questions such as, "Why are
there business organizations and not just individuals buying
and selling in markets?" Ronald Coase helped provide a good
answer, as explained by Michael Munger:
http://econlib.org/library/Columns/y2008/Mungerfirms.html
What happens when one side of the market has better
information about product quality than the other? Three
economists who answered that question received a Nobel Prize
in 2001:
http://nobelprize.org/nobel_prizes/economics/laureates/2001/public.html
Here is an explanation of arbitrage, one of the several
topics discussed in this section:
http://www.riskglossary.com/link/arbitrage.htm
Insurance markets are strange markets, and give rise to a
phenomenon called moral hazard. This entry in The Concise
Encyclopedia of Economics explains a bit about this
market and the problems in it:
http://www.econlib.org/LIBRARY/Enc/Insurance.html
(I have not yet found an appropriate entry for this
topic.)
Wikipedia explains the free-rider problem:
http://en.wikipedia.org/wiki/Free_rider_problem
Network economies, or the lock-in effect, are an
interesting phenomenon that explains a lot of what has
happened in certain parts of the software market:
http://en.wikipedia.org/wiki/Network_effect
These links were checked on May 27, 2007
CyberEconomics arose from my dissatisfaction of the
standard college economics textbook of the 1960s and 1970. I
set out to write a book that would reflect a different way
of organizing the course, a way that I thought better
reflected the state of economics in the 1970s and 1980s than
what I saw in the textbooks. In the years since, other
authors have moved towards my organization, and on some
topics they have moved past me.
A few years ago I began to question the need for any
economics textbook, even mine. With the new technology of
the internet, could the textbook as we know it be obsolete?
What would a textbook look like if it were composed of bits
and pieces that could be assembled from the internet? In the
summer of 2007, I decided to find out by composing such a
textbook, and this page and the pages like it are the
result. However, in making this alternative textbook, I kept
the same structure that exists in CyberEconomics. If
I were really serious about getting rid of the textbook, I
would want a different organization, one that dropped many
of the topics from the traditional textbook and went into
more depth on a few key remaining ideas. But the cost of
that project is too high, given my time, abilities, and
alternative opportunities.
I am moderately satisfied with the results. In many cases
finding readings that were roughly compatible with topics
and coverage of the chapter was difficult. I used a lot of
entries from Wikipedia because they seemed better
than the alternatives I could find in the limited time given
to this endeavor. I found Wikipedia an uneven source:
some articles are very good, others are overly technical,
and a few are a mess. I also used many entries from The
Concise Encyclopedia of Economics even though in many
cases they were longer and more detailed that what I really
wanted. The temptation to link to the work of the many great
economists who have written for The Concise Encyclopedia
of Economics was just too great.
Even though this first (summer 2007) version leaves much
to be desired, with feedback future editions might develop
into something much better. I am especially interested in
relatively short readings that have stable urls. Newspaper
articles sometimes have stories that illustrate economic
concepts in entertaining ways, but finding them is very time
consuming, and often they do not have lasting urls. If you
have suggestions of sites that are informative,
entertaining, and/or interactive, send them to me at schenk
at saintjoe.edu.
The reason these sections are called "Alternatives and
Supplements" is that they can serve not only as alternative
readings, but they can also be used to explore the topics in
more depth or from another point of view. I really do not
want to make my text obsolete: I am hoping that this new
feature will make it more useful, not less useful.
 
Copyright
Robert Schenk
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