From Micromotives and Macrobehavior by Thomas Schelling. (Thanks BMP.)
I like to believe that I can present significant ideas without formal models or mathematics. (3)
Well-said. You have to be smart to understand academic discourse, but you have to be even smarter to explain it in clear and accessible terms. (And Schelling did win a Nobel prize.)
I define game theory as the study of how rational individuals make choices when the better choice among two possibilities, or the better choice among several possibilities, depends on the choices that others will make or are making. (3)
Concise and lucid. See quote #1, perhaps?
How well each does for himself in adapting to his social environment is not the same thing as how satisfactory a social environment they collectively create for themselves. (19)
That’s the “systems” approach to social science, normative and positive components, in one short and straightforward sentence.
There are a lot of requirements for making the free market work well, or even work at all. In addition to physical protection and contract enforcement, there has to be a lot of shopping around so that people know what trades are available, or enough information so that without shopping around people know what to expect when they buy or sell. Behind a typical free market is centuries of patient development of property rights and other legal arrangements, and an extraordinary standardization of goods and services and the terminology for describing them. Think of all the things you can actually purchase by telephone, confident that you will get what you asked for or be able to tell the difference at a glance. A lot of legal and institutional arrangements are designed to protect the rights of people who might, though affected by a transaction, be left out of it. (29)
The institutional substrate? At least in part, I suppose. OTOH this is kind of Macroeconomics 101.
When we ask why the “free market” in Christmas cards doesn’t lead to optimal exchange, the answer is that there is not a market and there was no reason to expect optimal results in the first place. The free market, when it works, is that special case of knowledgeable voluntary exchange of alienable commodities. (33)
The market as a special sort of social system, a particular social phenomenon. I dig.
Information networks, racial segregation, marital behavior, and language development are often overlapping and interconnected. It is commonly observed that the work force of a shop or store or taxi company or motel is homogeneous. Whether it is Irish or Italian, Cuban or Puerto Rican, black or white, Protestant or Catholic, the homogeneity suggests purpose or design. But the determinant is likely to be a communication network. Positions are filled by people who learn of openings; people learn of the openings from acquaintances who already work there; acquaintances are from the same schools and neighborhoods and families and churches and clubs. And, the nearest thing to a guarantee that a new employee can have is an older employee who vouches for him. (40)
To be continued.
