NOBODY AMONG US KNOWS HOW TO POPULARIZE ECONOMICS. And yet people write such books, just as Paris gets fed and pencils get produced. The most recent entry in the derby is Tim Harford's The Undercover Economist, which is closer in style and topics to Steven Landsburg's Armchair Economist, which I use to complement a microeconomic principles text, than it is to Steven D. Levitt and Stephen J. Dubner's Freakonomics, which I reviewed last year. On, then, to Book Review No. 4 for 2006.

Undercover Economist addresses fewer topics than Armchair Economist, with, however, less of the Chicago-tight-prior theorizing that reviewers of Armchair have interpreted varyingly as "arrogance" or right-wing preaching. Undercover sheds light on more difficult topics such as adverse selection, signalling, game theory, and externality. I can see using this as a complement to an intermediate price theory text, particularly if I had four credits to work with.

An academic economist must always keep in mind the intended audience of a book, particularly if the intended audience is a class confronting a required book. I have the disadvantage of having observed, as a graduate student, the development of the Rothschild-Stiglitz insurance market model and the Wilson extension of the lemons principle. It is helpful to a student who does not have a complete set of class and seminar notes to see the intuition, which has been further developed and codified over the years.

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