New books for teaching microeconomics to graduate students

I recently got a copy of John G. Riley’s Essential Microeconomics and today a copy of Microeconomic Foundations I: Choice and Competitive Markets by David M. Kreps. While I am pleased that Riley’s book covers standard general equilibrium approaches as well as game theory and mechanism design, I am intrigued by Kreps’s book, which covers “only” the necessities for a deep understanding of general equilibrium under certainty and uncertainty. From a very quick skimming, it appears that Kreps has incorporated in his latest book his famous lecture notes on decision theory of many years ago.

Even more, I am intrigued by the vague promise by Kreps in the preface of his book that he is planning two more volumes; one on “strategic interaction, information, and imperfect competition” and one on “institutions and behavior”. Given that I see less and less reason to teach the (admittedly quite beautiful) theory of general equilibrium, I am very impatient for the promised volumes to appear, as Kreps is a great explainer.

2 thoughts on “New books for teaching microeconomics to graduate students

  1. > Given that I see less and less reason to teach the (admittedly quite beautiful) theory of general equilibrium, […]

    Well, it is only the foundation of macroeconomics, international trade, public finance, growth and a handful of other fields…


    1. Yes it is, and it is harming the chances of these fields to be scientific. It's sad to say, as I started in general equilibrium theory (as applied to economies with public goods) but now I see how it distorts our intuitions and needs serious work to become somewhat better. I strongly feel game theory, networks, and the serious study of institutions is "where it's at", not forgetting all the ways that at the very foundation of what we do as economic theorists lies expected utility, yet another morass of beauty that leads our intuitions astray from what might be a serious science of economics. Just ask all the people who take experiments seriously. Anyway, time for coffee now before I rant longer. I do have a whole website in preparation with a friend to expound on these matters at what could be called "book length" but it's not ready yet. I will be sure to link it on this site when it has some reasonable amount of content. Then you'll have the chance to visit and read at length what we think (we were both raised on general equilibrium, by the way, but now see it a thing of the past). Oh, and of course, you will have a chance to complain in the comments there, too.


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