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The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor--and Why You Can Never Buy a Decent Used Car! By Tim Harford ( Oxford University Press, USA )
Release Date: 2005-11-01
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List Price: $35.00
Price: $23.10
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Product Description
An economist's version of The Way Things Work, this engaging volume is part field guide to economics and part expose of the economic principles lurking behind daily events, explaining everything from traffic jams to high coffee prices.
The Undercover Economist is for anyone who's wondered why the gap between rich and poor nations is so great, or why they can't seem to find a decent second-hand car, or how to outwit Starbucks. This book offers the hidden story behind these and other questions, as economist Tim Harford ranges from Africa, Asia, Europe, and of course the United States to reveal how supermarkets, airlines, and coffee chains--to name just a few--are vacuuming money from our wallets. Harford punctures the myths surrounding some of today's biggest controversies, including the high cost of health-care; he reveals why certain environmental laws can put a smile on a landlord's face; and he explains why some industries can have high profits for innocent reasons, while in other industries something sinister is going on. Covering an array of economic concepts including scarce resources, market power, efficiency, price gouging, market failure, inside information, and game theory, Harford sheds light on how these forces shape our day-to-day lives, often without our knowing it.
Showing us the world through the eyes of an economist, Tim Harford reveals that everyday events are intricate games of negotiations, contests of strength, and battles of wits. Written with a light touch and sly wit, The Undercover Economist turns "the dismal science" into a true delight.
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Economics demystified (for the developed world only) ( kashyap )
Harford is a mecro-economist, a bridge between macro and micro economics. Harford explains macro-economic phenomena such as retail pricing, stock market behavior, taxation, health-care, environment, and licensing air-waves; by one-by-one getting inside the heads of each stake-holder on that poker table and dissecting their behavior in accordance with the first principles of economics: scarcity and choice. However, the insights only go as far as the developed world does. In the last 3 chapters where Harford tries to similarly explain the woes of the poor and developing worlds with examples of Cameroon, Belgium and China; his views quickly appear shallow and cliche, lacking the same wisdom as the rest of the book. 70% of the book is therefore a 5-star, and the rest is a 2-star.
The book loses its panache is in trying to decipher globalization and the developed world through the "X-ray goggles of the undercover economist". Harford falls into the trap of taking the usual one-dimensional view of large developing countries (India and China in particular) as if they are obviously in a certain step in their evolution to become more and more like the developed world. These simplifications might be half true, but hardly insightful. Any statement of generalization about either India or China is like generalizing about North and South Americas combined (a contiguous land-mass with about a billion people) or Europe and USA combined (the developed nations with about a billion people). How valuable or insightful can any statement about the Americas as one entity or USA & Europe as one entity be? It is as futile, therefore, to attempt the same for either India or China without having an appreciation or perspective on the infinite diversity of the subject.
With the Undercover Economist, Tim Harford de-mystifies the wiggling jelly of economics (where you cannot kill farm-destroying birds without suffering population explosion of farm-destroying insects and so on). What sound like conundrums are actually logical explanations of common-sense causal chains. For example, he explains that "more rational the behavior of stock market investors, the more erratic the behavior of the stock market becomes." I try to summarize: rational investors would buy shares today if it was obvious that they would go up tomorrow, but then everyone would buy today driving the price high enough so that it cannot go higher tomorrow. Rationality would obviously and consistently second-guess rationality, implying rationality cannot lead to predictable behaviour. The only thing left then is unpredictable news, which is a random event. This means that shares would behave like random walks. But if this was absolutely true, it would be a paradox, since rational investors would not invest in shares and only invest in predictable alternatives. The balancing point then lies somewhere in between. Harford then goes on to draw parallels with supermarket queues and how everyone tries to predict the fastest one, and a game of poker with players analyzing the outcome based on fundamentals yet betting based on their understanding of what the other players are thinking.
A very readable economist with a fun and easy style. References to Nobel Laureates in Economics, and key theorems of importance would also make you keep going back to the book. This is one to keep.
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 Scientific explanations of common sense ( chazz11 )
All Harford does, is apply simple supply and demand paradigm to almost every issue he touch on and tries to make an impression that it's somehow revolutionary or ground breaking. His examples are often weak and do not provide anything new for people who have graduated from a business school or possess any kind of business thinking. The writing style needs also improvement as the author wonders around slightly too much. This is partially due to the lack of content he is ACTUALLY presenting, which has resulted in far too extravagant allegories to theories which are easily understood without them.
A far more interesting book to supply and demand, and why the economic theories do NOT apply nearly as often as Harford tries to portray, is Cialdini's "Influnce: The psychology of persuasion". You will find much more interesting case studies and real life examples from Cialdini's book than anything Harford can offer.
And Freakonomics was MUCH better that this book. Sorry, the most popular review poster:)
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Dry but worth a second read ( beatbox32 )
I grabbed this book from my local bookstore after being drawn in by the title. I've always had an interest in economics as whole, but never took the time to really dig myself into some reading material (besides the voluminous textbook I was forced to trudge through in college).
Mr. Harford does a satisfactory job of trying to explain the devil in the details behind many of society's microeconomic transactions. Like a few of the other reviewers, I did find the text to be a bit dry, but maybe it's a cultural thing (I believe he is English). That being said, I think it's fair to say that after a second reading, one should be able to have a fairly strong grasp of the ideas the author puts forward. Tim takes us through economic ideas such as marginal value, externalities and scarcity and presents multiple examples of these in action. I particularly enjoyed his challenges put forth to a lot of popular ideas (Anti-Globalization, Environmentalism), based on standard economic thought.
I believe this book is an excellent starting point for further study of the world of economics.
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 Great Style, Great Content ( sonyasawtelle )
Harford provides some wonderfully relevant, interesting and entertaining examples of basic economic principles. His style is not too wordy, but still illustrative of his ideas. I highly recommend this book - I guarantee you will have had some of the experiences he analyzes in economic terms. Very enlightening and a fun read.
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Going undercover ( crazy_interloper )
Tim Harford explains economics and uses economics to explain things that don't seem to make much sense on the surface.
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