Rubinstein, A. (2012). Economic Fables.

I believe every graduate student of economics should read this book. It is not that I support everything in this book, and one Amazon review has it right that Professor Rubinstein is trying “to challenge the entire discipline of economics, to draft sweeping indictments against it.” However it grapples with the big questions, and shows a scholar’s inner debate with himself, and teaches that you are not alone in doubting and questioning what you do.

Plus, I would love to have my father read this book to make him understand that I cannot always ‘academically’ present my views on economic sections of the daily newspaper, and that my efforts at writing new working papers (with formal models) may seem to him like a child’s play.

A description of an economic model is like the introduction in a tale, presenting the heroes, their interests and the setting in which they operate. An array of rules by which the model is “allowed” to develop from its beginning to its end is called a solution concept.

Some criticize the experiments pertaining to decision making because the participants are offered insignificant incentives. … I do not agree with this criticism. First, not only fateful decisions are important. In life, people make many small decisions and the cumulative economic impact of these decisions is significant. And second, most of the major economic decisions are made by people for whom such decisions are an everyday matter.

But, in general, it seems to me that the spread of economics to other areas derives from the view expressed by the economist Steven Levitt: “Economics is a science with excellent tools for gaining answers, but a serious shortage of interesting questions.” … The giggling of those present when someone uses the expression “the imperialism of economics” is replaced by growing embarrassment when others begin to speak with arrogance and disdain about the natives in the colonies – that is, toward anyone who has yet to discover the treasures of economic thinking.

Trap 5: The interdisciplinary worlds are like the universe. They have a tendency to expand nonstop.

In order to define the economic game, answers are needed to questions such as: Who are the players? How should we deal with redundant players? What moves are allowed? What should be done if a few players acquire a dominant position in the game? What can be owned and traded? Should we take into account the possibility that some players have limited ability to play the economic game? How flexible are the rules of the game? And what course of action should be taken when players opt out of the game completely?

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