No One Makes You Shop at Wal-Mart: The Surprising Deceptions of Individual Choice [Paperback]

I read a copy of this book from the public library, but now I'm buying a copy to keep, which lets you know how much I enjoyed it. It makes an excellent companion to a book like Dixit and Nabebuff's Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life. Both of them are friendly introductions to game theory, but Slee's book is uniquely valuable for two reasons.

First, Dixit and Nalebuff want to teach you about game theory itself, and so are concerned that you learn the right terminology, know how to step backwards through a game tree, get a little sense of the historical development of the theory, and various other things that are mostly important if you want to pass a test on game theory at some point, or intend to read more advanced books later. Slee, on the other hand, wants to attack a political position and uses game theory to do it. Because he wants to use the theory rather than provide a formal introduction, his presentation eliminates jargon, technicalities, and anything else he can throw overboard to lighten the ship. The end result, for me, is a clear, unobstructed view of the raw power of the fundamental ideas of game theory as Slee puts them to work.

Secondly, Slee shows game theory in a different context than usual. Most presentations of game theory, like Dixit and Nalebuff's, primarily use examples that concern rivals and competitors. Even when discussing co-operation, the emphasis is often on the possibility of betrayal and defection. Slee goes in the other direction. Because he wants to talk about how consumer choices in the marketplace impact communities, his examples tend towards situations where people are not consciously competing with each other or even thinking about each other. This change in emphasis highlights a different side of game theory, its exploration of interdependence rather than its exploration of competition. I found that to be refreshing and useful as well.

I don't mean to criticize the Dixit-Nalebuff book; it's very good. But Slee's unusual approach makes his book a welcome and valuable addition, no matter what your politics are.

There is a theory (quite an elegant one, actually) that says that because we live in a marketplace of free choices we end up getting basically what we want -- our dollars are like votes for the society we wish to live in. Many have challenged this view, from a variety of perspectives, but Tom Slee (who calls this notion MarketThink) has chosen to focus on just one: the economic subfield of "game theory".

Slee walks through the major discoveries of game theory, explains them in simple language with reference to a fictional town of Whimsley, and discusses how they refute standard economic conclusions while still playing by basic economic assumptions with effects that appear to show up in the real world.

The book is full of dozens of examples, each with careful analysis and clear writing. Perhaps the most odd feature of the book is its politics. On the one hand, Slee is plainly a committed leftist, with positive references to Naomi Klein and other capitalist critics. But on the other hand, he never gives up on the rational actor and methodological individualist assumptions of modern economics, and shows little patience for those (typically his political allies) who have more thorough-going critiques. Nonetheless, the book is a recommended read for anyone interested in these questions.

First of all, I'm a libertarian, which makes me the type of person most likely to disagree with Mr. Slee.
I'll start with what this book is not. This book is not a critique of capitalism in general or of the market system. This book is a polemic on what Mr. Slee calls MarketThink, the belief that markets free from government intervention will *always* achieve the public good; as Slee puts it "The subtext for this book is a call for the reinstatement of collective action into politics." This book also serves as a relatively good introduction to the many ways that markets can fail.
On to the content. I really don't know where Slee sees all this MarketThink. Certainly many libertarians are guilty of MarketThink, but I don't know of *any* politician who advocates anything close to free-markets and very few who actively advocate freer markets. Even many educated libertarians say that the government has some role in regulating and correcting markets.
This book covers a wide range of market failures, regular externalities, herd choices, asymmetric information and a few others. Slee also does a good job explaining most of them. He is clear, especially if you have a science background, and he usually uses very good examples, though, once or twice I thought the examples he used were misleading as to the real world applicability of his discussion topic.
A few of the topics discussed in the book are not market failures at all. For example, Slee tries to describe lack of self control (having a large discount rate) as a market failure, which is not even slightly correct. I also though chapter six, "Divide and Conquer," on corporations, was not well thought out because it was not consistent with some of the ideas Slee had discussed earlier in the book.
Slee makes very few policy recommendations, and with good reason, for many of the market failures Slee discusses are essentially impossible for the government to fix without doing things like banning all fancy cars, and some have no readily conceivable government solution. Also, Slee's language gives me the feeling that he does not have a good understanding or awareness of Public Choice economics, which dissects all the ways in which *government* can fail.
On the whole, Slee writes well, his prose is easy to understand and he is quite engaging. He also has a good sense of humor; I laughed out loud several times reading this book.
I would never recommend this book to anyone who has not had at least introductory micro-economics, first, just to be able to understand what Slee is discussing and second, to avoid getting the impression that markets are completely hopeless without government intervention. If you've had at least basic micro-economics, and especially if you have a heavy free-market slant, then I would recommend this book as a fun introduction to market failure, but as with most things, remaining a little skeptical is a good idea.