Notes On The Theory Of Choice (Underground Classics in Economics) [Paperback]

David Kreps (Author)

Book Description

ISBN-10: 0813375533 | ISBN-13: 978-0813375533 | Publication Date: May 12, 1988

In this book, Professor Kreps presents a first course on the basic models of choice theory that underlie much of economic theory. This course, taught for several years at the Graduate School of Business, Stanford University, gives the student an introduction to the axiomatic method of economic analysis, without placing too heavy a demand on mathematical sophistication.The course begins with the basics of choice and revealed preference theory and then discusses numerical representations of ordinal preference. Models with uncertainty come next: First is von Neumann–Morgenstern utility, and then choice under uncertainty with subjective uncertainty, using the formulation of Anscombe and Aumann, and then sketching the development of Savage’s classic theory. Finally, the course delves into a number of special topics, including de Finetti’s theorem, modeling choice on a part of a larger problem, dynamic choice, and the empirical evidence against the classic models.

Editorial Reviews

About the Author

David M. Kreps is the Paul E. Holden Professor of Economics in the Graduate School of Business, Stanford University.

Product Details

• Paperback: 224 pages
• Publisher: Westview Press (May 12, 1988)
• Language: English
• ISBN-10: 0813375533
• ISBN-13: 978-0813375533
• Product Dimensions: 8.6 x 6 x 0.5 inches
• Shipping Weight: 13.1 ounces (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (7 customer reviews)
• Amazon Best Sellers Rank: #165,757 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

12 of 13 people found the following review helpful:

4.0 out of 5 stars Useful, concise, requires some background, February 27, 2001

By 

A. Wakefield "Partial Observer" (Indian Fortress, NY) - See all my reviews

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This review is from: Notes On The Theory Of Choice (Underground Classics in Economics) (Paperback)

I think this book certainly deserves its good reputation as a primer on the variations and developments of utility theory. It must be noted that the book requires a fair amount of mathematical background that students coming to choice theory from non-economic backgrounds might not have. The book may be almost inscrutable if you are not ready to think mathematically about choice an aren't familiar with mathematic-decision speak. To that reader, I would refer you to a book called "Thinking and Deciding" by Jonathan Baron and/or the Psychology of Judgment and Decision Making by Scott Plous. For a reader with a psychology background such as myself, those were much gentler introductions, although the material in this book is worth mastering if you want to do serious work in the field of decision making research.

11 of 13 people found the following review helpful:

5.0 out of 5 stars a splendid book, March 25, 2000

By A Customer

This review is from: Notes On The Theory Of Choice (Underground Classics in Economics) (Paperback)

I have read this book more than 10 times since I came across it. Every time I read this book, I find something new. This book is based on lecture notes on axiomatic choice theory presented by David Kreps(the author) at the Stanford University. If you want to major in economics, in particular, choice theory, this book will enable you to access this area very easily.

7 of 8 people found the following review helpful:

5.0 out of 5 stars Start thinking with a decision-theorist mind, March 26, 2004

By 

Gabriel Natividad (N.Y., N.Y.) - See all my reviews
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This review is from: Notes On The Theory Of Choice (Underground Classics in Economics) (Paperback)

The book seems harmless at the beginning with the mathematical proofs of some binary relations, which require a little bit of logic - and very careful writing down, if you have to turn in the problems as homework. But it gets more and more challenging - and pushes you to use some Real Analysis and Probability Theory concepts to really master the issues presented. This is not a reference book, nor a traditional textbook: it is a collection of lectures on economics of decision. The Von Neumann Morgernstern model is developed in all its magnitude, going further than any game theory textbook. You start to feel the 3 axioms and the numerical representation as second nature! But then, the Aumann/Anscombe and Savage models are introduced, as well as the limitations of the perfect VNM model. Everything you've learned seems to fall apart.
The problem sets are mainly excursions, in the very Kreps' style (if you have read his Course on Microeconomic Theory, you know what half a page problem without any equation is). In general, you don't need economics to get a good grip of the content: it is decision theory, not micro theory. Engineers and mathematicians will love it - and some economists will find it too tough!