Customer Reviews

No One Makes You Shop at Wal-Mart: The Surprising Deceptions of Individual Choice

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I read a copy of this book from the public library, but now I'm buying a copy to keep, which lets you know how much I enjoyed it. It makes an excellent companion to a book like Dixit and Nabebuff's Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life. Both of them are friendly introductions to game theory, but Slee's book is uniquely valuable for two reasons.

First, Dixit and Nalebuff want to teach you about game theory itself, and so are concerned that you learn the right terminology, know how to step backwards through a game tree, get a little sense of the historical development of the theory, and various other things that are mostly important if you want to pass a test on game theory at some point, or intend to read more advanced books later. Slee, on the other hand, wants to attack a political position and uses game theory to do it. Because he wants to use the theory rather than provide a formal introduction, his presentation eliminates jargon, technicalities, and anything else he can throw overboard to lighten the ship. The end result, for me, is a clear, unobstructed view of the raw power of the fundamental ideas of game theory as Slee puts them to work.

Secondly, Slee shows game theory in a different context than usual. Most presentations of game theory, like Dixit and Nalebuff's, primarily use examples that concern rivals and competitors. Even when discussing co-operation, the emphasis is often on the possibility of betrayal and defection. Slee goes in the other direction. Because he wants to talk about how consumer choices in the marketplace impact communities, his examples tend towards situations where people are not consciously competing with each other or even thinking about each other. This change in emphasis highlights a different side of game theory, its exploration of interdependence rather than its exploration of competition. I found that to be refreshing and useful as well.

I don't mean to criticize the Dixit-Nalebuff book; it's very good. But Slee's unusual approach makes his book a welcome and valuable addition, no matter what your politics are.

There is a theory (quite an elegant one, actually) that says that because we live in a marketplace of free choices we end up getting basically what we want -- our dollars are like votes for the society we wish to live in. Many have challenged this view, from a variety of perspectives, but Tom Slee (who calls this notion MarketThink) has chosen to focus on just one: the economic subfield of "game theory".

Slee walks through the major discoveries of game theory, explains them in simple language with reference to a fictional town of Whimsley, and discusses how they refute standard economic conclusions while still playing by basic economic assumptions with effects that appear to show up in the real world.

The book is full of dozens of examples, each with careful analysis and clear writing. Perhaps the most odd feature of the book is its politics. On the one hand, Slee is plainly a committed leftist, with positive references to Naomi Klein and other capitalist critics. But on the other hand, he never gives up on the rational actor and methodological individualist assumptions of modern economics, and shows little patience for those (typically his political allies) who have more thorough-going critiques. Nonetheless, the book is a recommended read for anyone interested in these questions.

First of all, I'm a libertarian, which makes me the type of person most likely to disagree with Mr. Slee.
I'll start with what this book is not. This book is not a critique of capitalism in general or of the market system. This book is a polemic on what Mr. Slee calls MarketThink, the belief that markets free from government intervention will *always* achieve the public good; as Slee puts it "The subtext for this book is a call for the reinstatement of collective action into politics." This book also serves as a relatively good introduction to the many ways that markets can fail.
On to the content. I really don't know where Slee sees all this MarketThink. Certainly many libertarians are guilty of MarketThink, but I don't know of *any* politician who advocates anything close to free-markets and very few who actively advocate freer markets. Even many educated libertarians say that the government has some role in regulating and correcting markets.
This book covers a wide range of market failures, regular externalities, herd choices, asymmetric information and a few others. Slee also does a good job explaining most of them. He is clear, especially if you have a science background, and he usually uses very good examples, though, once or twice I thought the examples he used were misleading as to the real world applicability of his discussion topic.
A few of the topics discussed in the book are not market failures at all. For example, Slee tries to describe lack of self control (having a large discount rate) as a market failure, which is not even slightly correct. I also though chapter six, "Divide and Conquer," on corporations, was not well thought out because it was not consistent with some of the ideas Slee had discussed earlier in the book.
Slee makes very few policy recommendations, and with good reason, for many of the market failures Slee discusses are essentially impossible for the government to fix without doing things like banning all fancy cars, and some have no readily conceivable government solution. Also, Slee's language gives me the feeling that he does not have a good understanding or awareness of Public Choice economics, which dissects all the ways in which *government* can fail.
On the whole, Slee writes well, his prose is easy to understand and he is quite engaging. He also has a good sense of humor; I laughed out loud several times reading this book.
I would never recommend this book to anyone who has not had at least introductory micro-economics, first, just to be able to understand what Slee is discussing and second, to avoid getting the impression that markets are completely hopeless without government intervention. If you've had at least basic micro-economics, and especially if you have a heavy free-market slant, then I would recommend this book as a fun introduction to market failure, but as with most things, remaining a little skeptical is a good idea.

The title of this book is actually ironic: Slee's claim is that the choices of other consumers often force you to do things you don't want to do. A "choice" shouldn't be viewed as an atomic economic act; real choices are entangled with what everyone else chooses to do. You choose to buy Us Weekly at the grocery store, and so do a million of your compatriots, and pretty soon that's all that's available for *me* in the checkout aisle. No one "chose" for that to happen, but that's how it worked out. Choices are constrained by other choices.

Slee wraps this all up beautifully: you should think of "best response" rather than "preference": what you choose to do is not a direct expression of what you prefer, as naïve choice theory would have it; rather, what you choose is the best response to everyone else's choices -- and theirs are best responses to yours.

The classic example of a best response that leads to a disappointing outcome is the prisoner's dilemma: each prisoner, when deciding how to act, realizes that no matter what the other prisoner does, it would be in his best interest to rat his partner out. If my partner rats me out, then I'm better off ratting him out than staying quiet. Likewise, if my partner stays quiet, I'm better off ratting him out. So no matter what my partner does, I should pick the outcome that makes life worse for both of us.

Slee's book is the best use of economics in a mass-audience context that I've yet seen. And it's entirely rigorous. The argument is perfectly simple and correct. It should be valuable to anyone who believes that the free market will apply a balm to all woes.

This book is mostly a good overview for laymen of a wide range of theory that economists use to explain why individual choice doesn't create utopia. Those who know a good deal about economics won't find much new here.
His attempts to apply these theories to the real world are disappointing, but only make up a small part of the book, so they don't detract too much from its quality.
His description of how rational individual choices to shop at Walmart (irrationality is outside the scope of this book) could lead to consumers having fewer choices seems coherent but has no obvious connection with actual effects (but would seem plausible if applied to Microsoft). His description of how Walmart has negative effect on urban areas that used to host its competitors probably has a bit of truth to it, but it seems insignificant to me, and there's no obvious way to resolve disagreements over the importance of that effect.
His most surprising argument is against school choice. He describes a coherent model which implies the main effect of school choice is increased inequality. This conclusion appears to require that changes in teaching quality are unimportant compared to the influence of students on each other. He neglects to mention the unpopular implications this would have for what teachers' salaries ought to be. There's nothing obviously wrong with his position, but it's unclear whether the reference he provides as evidence for it says what he claims, and the evidence he claims it provides for the effects of students on each other would not be enough to warrant his implicit belittling of differences in teaching quality.
He points to a desirable effect of France's 35-hour workweek rules in limiting competition for status via work. Does this shift competition for status to something more constructive or less constructive? How does it affect innovation? He doesn't ask.
He seems to believe that his arguments should convince people to support collective action more often, but the main conclusion you ought to derive from them is that it's important to have a deep understanding of economics, and that we should be suspicious of people who form strong opinions on free markets and collective action based on simple ideologies. He keeps hinting that his arguments imply markets should be regulated more, but he rarely provides any guidance about what kind of regulations would be desirable, and few of the problems that he points out seem to be unique to free markets.

This book is doomed to be attacked by economists with some kind of Austrian, neo-classical, whatever perspective about rationality from this or that angle and the meaning for freedom blah blah blah.

I found it refreshing to clearly spell out to the layman how externalities (decisions between two parties that affect third parties that have no say in those effects) can arise when things seem straightforward. The author uses a lot of good case studies, trying to cover a lot of the logical bases so as not to be quickly swatted down. However, he does it quite clumsily, and in a not so tied together order, so it works sometimes and not others.

The major problem I found with this work is that it draws on a narrow set of disciplines, sociology and game theory with a very cursory discussion of deep economics. While I'm fine with this, I can just hear the uberconservatives going absolutely wacko on this work with obscure studies that show that Wal Marts policies of setting children on fire or breaking the kneecaps of puppies is somehow beneficial to everyone involved and if we didn't allow that to happen we would all die in Chinese concentration camps.

So, let me give the standard hater response to this book, "This guy is a socialist that doesn't understand anything but a very basic level of economics. Smith et al have shown that "Insert factoid here" meaning that you cannot consider choice and rationality in the way you do. Further, it is frightening to think what would happen if we were to go down the road that is suggested by demonizing companies like Wal Mart. Look what happened in the Soviet Union. He needs to read a book by "Name of ideologue economist" and get a clue."

And here and there, some of the finer argued points in such objections are quite valid. They don't in any way take away from the authors overall point that there are lots of market transactions that can have negative outcomes and rationality of such transactions can't simply be assumed, but because of the narrow use of physical evidence in the book, the author leaves himself wide open to be drowned out by the chorus of cries of "Socialist!!!"