Micromotives and Macrobehavior | 
|  | | | Title: | Micromotives and Macrobehavior | | Author: | Thomas C. Schelling | | Publisher: | W. W. Norton | | Type: | Book / Paperback | | Publication Date: | 16 October, 2006 | | ISBN / ISBN-13: | 0393329461 / 9780393329469 | | List Price: | $15.95 | | You Save: | $5.10 | | Amazon Price: | $10.85 | |
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Product Description
Before Freakonomics and The Tipping Point there was this classic by the 2005 Nobel Laureate in Economics.
"Schelling here offers an early analysis of 'tipping' in social situations involving a large number of individuals."—official citation for the 2005 Nobel Prize
Micromotives and Macrobehavior was originally published over twenty-five years ago, yet the stories it tells feel just as fresh today. And the subject of these stories—how small and seemingly meaningless decisions and actions by individuals often lead to significant unintended consequences for a large group—is more important than ever. In one famous example, Thomas C. Schelling shows that a slight-but-not-malicious preference to have neighbors of the same race eventually leads to completely segregated populations.
The updated edition of this landmark book contains a new preface and the author's Nobel Prize acceptance speech.
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Customer Reviews:
• Micromotives And Macrobehavior 09 August, 2007
This is one of the best books I have ever read. I have read it at least three times and learn something new each time. Schelling is not only a great economist but a great writer. He has a knack for making arcane concepts accessible. I highly recommend it. This book uses economic methodology to tackle "non-economic" concepts, such as segregation, sorting and mixing and cooperation.
- Reviewed by customer ID: A3V382TH4MO6FA
• 1970s Freakonomics 23 March, 2006
Game theory has been criticized for being able to explain anything, yet having little predictive capability. Whatever the case, Thomas Schelling's book is a gem. He takes everyday life phenomena and applies some systematic analysis as to why these things happen. It's a quick read and when you are done you too will keep viewing any issues coming your way as if they were seeking an equilibrium. With the varied topics and colorful examples it's the 1970s equivalent of "Freakonomics".
- Reviewed by customer ID: A39PNIUJTA8LVN
• The Big Picture Relevance Of Details 25 March, 2006
I enjoyed this book for it's stimulating arguments and everyday examples of big picture, "big topics" issues. As a novice to any type of economic analysis I've found the book informative and interesting. I recommend this book to anybody wishing to increase their awareness of the relevance of everyday events and experience to bigger, more intellectual topics.
- Reviewed by customer ID: A2CZRF8JFFGRMV
• On The Importance And Fun Of Economics 23 November, 2007
Micromotives and Macrobehavior shows what fun it must be to be an economist. More specifically, it shows what fun it must be to be Thomas Schelling. It's not a book of high theory; it is a book of high particularity. When Schelling walks down the street, I imagine him with a giant grin or, barring that, a notepad in his hand to take down his thoughts on whatever he might be looking at; every last bit of the world must fascinate him. The great fun in economics, to me, is not what it has to tell me about optimal investment strategies -- finance being only a small, if important, part of life -- but rather what it has to say about human behavior, and particularly human behavior in the face of other humans.
There are some basic problems of arithmetic that our desires might well create; Schelling very charmingly entitles a chapter on this subject "The Inescapable Mathematics of Musical Chairs." If we all want to live a solitary life in the country, we'll all move to the country and find ourselves surrounded by the people we were trying to escape. We can't all dispose of our Canadian quarters, says Schelling: you pawn off your quarters on me, I pawn them off on my neighbor, and yet still the total stock of quarters is exactly where it was. This accounting for musical chairs gives economics much of its power. It's what happens when you take your eyes off individuals for just a moment and think about their behavior in crowds.
What happens if no one in a university can stand being in the bottom 10% of his class? The bottom 10% will leave. Now 90% of the original class is left, and there's a new bunch in the bottom 10%. They leave. And so forth. Eventually, if this process continues, the class will whittle down to 10% of its original size. An unrealistic example, surely, but it's illustrative. The most famous model of this sort in Micromotives and Macrobehavior is the segregation model. Suppose few people wish to live in a racially homogeneous community; everyone desires some integration. But suppose people don't want to be too isolated: white people have no problem living with black people, so long as the white people aren't the minority in their neighborhoods. What will happen to the racial composition of neighborhoods? Schelling simulates a small city on a standard 8Ă—8 cheesboard, with nickels and dimes representing white and black people. The board starts out in one equilibrium where everyone is satisfied with his neighbors and no one is too isolated. Then there's a minor shock to the system: a few people move away at random around the board. Suddenly black people have no neighbor on one side, and only white people on the other. What was a satisfying equilibrium before is now unsatisfying to at least one person on the board, so he moves to a neighborhood whose racial composition is more to his liking. This process continues until we've reached a new equilibrium. More often than not, this equilibrium involves massive segregation. No one desired that it be this way; people only wished that those near them looked somewhat like them.
A few questions naturally present themselves here. How many equilibria are there? How many stable equilibria are there? (Perfect integration was an equilibrium at the start of the experiment, but it was unstable in the face of mild shocks.) The convergence to segregation depends on how homogeneous people wish their neighborhoods to be; if everyone desires that 50% of his neighbors be like him, does that change anything? Also, do the conclusions change when we move from a small city modeled by an 8Ă—8 board to a larger one?
One of the lessons has been well-rehearsed elsewhere (e.g., No One Makes You Shop At Wal-Mart): in many cases, the decisions that we make individually cannot be expected to result in outcomes that we all would have chosen had we coordinated. You don't even need to look at the level of an entire society; Schelling has plenty of examples from everyday life. Maybe the easiest is something that happened to him while driving back from Cape Cod: a mattress had fallen off the roof of someone's car and had snarled traffic for hours. If the driver of that car with the mattress could somehow have borne (in the jargon: "internalized") the costs that he inflicted on everyone else, he'd probably have stopped his car, fetched the mattress, and saved everyone a lot of lost time. Or if all the other drivers could have coordinated somehow, they might have been able to get that mattress off the road and save everyone behind them the time that they all lost. Absent any coordination, though, that mattress might still be laying there.
This coordination doesn't need to come in the form of an enforcer with guns, necessarily; social norms can do it. What if we've all been trained by our parents to feel great shame at not helping others? You can certainly imagine social structures in which people would fight others for the right to clear off that mattress. If it's hard to envision this, suppose that selflessness were actually sexy.
The direction you turn from here is asking how societies solve coordination problems -- how we encourage each other to behave in a way that helps out everyone. Micromotives and Macrobehavior is chiefly valuable in that it gets you thinking about these problems, and realizing that it's not especially easy: merely scaling up your own virtuous behavior won't necessarily cut it.
- Reviewed by customer ID: A35PLM0LLD0XM9
• The Golden Rule And Self-restraint 22 November, 2006
Schelling's book covertly drafts a model of economic support for the Golden Rule. While many of his examples may be repetitive, ultimately, we learn that by restraining ourselves in various enterprises, such as energy conservation, we are able to produce overall benefits for society. However, the hitch is that without critical mass or some basis for keeping rebels in line, no one adheres to the collective system and therefore no one benefits. Thus, the author intelligently posits an argument that in properly regulated environments, cooperation and selflessness produce stability and will lead to long-term success.
What is more interesting are Schelling's numerous examples and asides about human behavior that, once examined carefully, yield a greater understanding about everyday phenomena. For example, he writes, "Most people think that inflation reduces purchasing power without stopping to notice that their own pay increases are somebody else's inflation, and at least some of it must cancel out." This book is filled with such astute and not easily apparent statements. He also carries economic theory into social theory, showing that if all men married women four years younger than them where population is growing at three percent annually, eventually women of marrying age may outnumber men by more than 12%. The book has several of these nuggets, but leaves out an obvious and one of my favorite lessons about education: when a student goes to school, s/he not only "loses" the money s/he spends on tuition, but also her/his earning power during the years spent studying. For this reason, one could argue that it seems more sensical to attend school when there is a recession and to work when unemployment is low.
The glaring gap in this book is the problem of freeloaders--what do we do, for example, about the neighbor who waters his lawn excessively during a water shortage, thereby creating less incentive for others to conserve water? The author most likely believes that education will assist this problem, but this may be an idealistic notion at best. Still, Schelling manages to prove that cooperation rather than competition in some cases may produce better results, leading to viable arguments against selfish behavior.
- Reviewed by customer ID: A18AP4GWLN3XCA
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