Customer Reviews

A Course in Microeconomic Theory

5 star:		(2)
4 star:		(1)
3 star:		(3)
2 star:		(0)
1 star:		(0)

 

 

The quality of the text is very uneven. The foundations of choice theory and game theory are presented with great clarity and insight. This would have been enough to get five stars. Alas, the author yielded to the temptation of trying to make it a comprehensive first-year microeconomics text (instead of a complement to, say, Varian's Microeconomic Analysis). The parts on traditional topics like cost and demand functions, partial and general equilibrium have all the flavor of an after-thought addendum. That lost it one of my stars.

Kreps is different from the usual graduate-level Economics textbooks. There is no orderly march of 'lemmas', 'propositions' and 'theorems' supported by stern proofs. Instead you have examples that are taken apart to help build your intuition of how Microeconomics works, arguments that make you aware of the limitations of the standard models. But the story-telling is not at the cost of precision. Enough details and references are provided for the mathematically-inclined reader to build or find proofs.

While all the standard micro topics are covered, the five chapters on game theory are truly exceptional in conveying the logic of the many equilibrium concepts of classical game theory and their relevance to economics. The treatment of choice theory is also much more careful than in many other books. These chapters set the stage for the detailed treatments in Notes On The Theory Of Choice (Underground Classics in Economics) and Game Theory and Economic Modelling (Clarendon Lectures in Economics).

Comparison to MWG? MWG's style is the no-nonsense official style. If you want to efficiently learn the 'official version' of things for that exam you have coming up then MWG is the book to go to. MWG also has more exercises and it covers much more material than Kreps. Its treatment of general equilibrium theory is much superior.

So if you can read only one book in graduate micro, I would recommend MWG. But if your purpose is to learn how to think about microeconomics, you cannot do without also reading Kreps.

A Course in Microeconomic Theory is one of the best mainstream price theory texts available. There are mistakes in this book. Kreps takes Walrasian equilibrium a bit too seriously. He admits to the unreal nature of important parts of Walrasian equilibrium. He admits that it does not tell us how markets work, and that it omits important institutions, like money. Kreps refers to the Walrasian Auctioneer as fairly unrealistic (p 195), when the adjective utterly might be more fitting.

He also takes 'benevolent social Dictators' too seriously. The next edition of this book would be much superior if the author were to pay more attention to Public Choice theory.

However, he does explain economic concepts fairly well. This is not just an exercise in mathematical games. Much of the math that he uses is game theoretic. Kreps included an entire section on game theory. He uses more math than one really needs to understand economics, but the math that he does use is the most useful there is.

There is an entire section on information economics. It goes farther than most other price theory texts in discussing this important topic, though not far enough.

This books biggest strength is its' section on transaction costs theories of the firm. Here the author remedies much of the unreal character of price theory. This alone sets it apart from other mainstream texts.

This book is the best at teaching mainstream economics. Kreps is modest in his claims about the realism regarding standard models of competitive equilibrium, and explains concepts and techniques well. He also focuses on the many of the right concepts and techniques. The main defect in this book is that it does not go far enough in adding realism to price theory.

About a decade after I took my first year doctoral microeconomics course, I ran across this textbook on Amazon and was surprised to see that its rating was less than 5 stars, so I want to add my 2 cents. I'm a smart person, very quantitative, with A's in all my doctoral level statistics courses and now I consult to many people on statistics issues. In my first year of my PhD program, I struggled with my microeconomics course's required text by Andreu Mas-Colell. I supplemented with this book and Hal Varian's, and they really got me through in the many many places where Mas-Colell was unclear. This book was more helpful than Varian. It is written in a humorous and clear style that I found reassuring. The layout was clear and easy to read. And this textbook is the one thing that I feel positively about microeconomics. No specific examples, but if I feel good about this text a decade later, it has to be good, right? Kreps's other book Notes on the Theory of Choice was a main text for a decision theory course that I took, and I really liked that book as well and found it easy to follow and even enjoyable to read and prove the little theorems along the way.

at the important spot. kreps says that it is left to you. i dislike this author.
I need other books that explain in some more detail. the chapeter on choice under uncertainty need complementary book.

You are better off spending your money elsewhere. This book is not well written, and gives cursory treatment to many important areas of Micro theory. Compared to the other dominant Micro texts, it falls way short.