Book Bits | 30 November 2019

The AI Economy: Work, Wealth and Welfare in the Age of the Robot
By Roger Bootle
Summary via FT
Bootle, chairman of Capital Economics, argues that the economic effects of artificial intelligence may not be as different from those of previous technological transformations as many suppose; that the speed with which the changes occur may not be all that fast; and that, in all probability, piecemeal changes in policy, rather than a radical shift towards universal basic income, are the right response. We need to hear his arguments.

Why We’re Wrong About Nearly Everything: A Theory of Human Misunderstanding
By Bobby Duffy
Review via Inside Higher Ed
“Almost all existing analysis,” Duffy says, “tends to focus on one side or the other: on our fallible human brains or a manipulative information environment that leads us astray. This echoes our human need for simplicity and solutions: we want to see problems as caused by one thing or another, providing a clear focus for blame and a single answer.” We are prone to delusions — but also to having delusions about our delusions. In fact it is “myriad interactions and feedback loops” among our cognitive glitches “that together create a system of delusion,” quite apart from any bogus information from people trying to take advantage of us.
One such glitch Duffy refers to is “what behavioral scientists call the ‘availability heuristic,’ a mental shortcut whereby we reach for information that’s readily available, even if it doesn’t quite fit the situation or give us the full picture.

Sick to Debt: How Smarter Markets Lead to Better Care
By Peter A. Ubel
Summary via publisher (Yale University Press)
The United States has the most expensive healthcare system in the world. While policy makers have argued over who is at fault for this, the system has been quietly moving toward high-deductible insurance plans that require patients to pay large amounts out of pocket before insurance kicks in. The idea behind this shift is that patients will become better consumers of healthcare when forced to pay for their medical expenses.
Laying bare the perils of the current situation, Peter A. Ubel—a physician and behavioral scientist—notes that even when patients have time to shop around, healthcare costs remain largely opaque, difficult to access, and hard to compare. Arguing for a middle path between a market-based and a completely free system, Ubel envisions more transparent, smarter healthcare plans that tie the prices of treatments to the value they provide so that people can afford to receive the care they deserve.

Bingo Capitalism: The Law and Political Economy of Everyday Gambling
By Kate Bedford
Summary via publisher (Oxford University Press)
Casinos are often used by political economists, and popular commentators, to think critically about capitalism. Bingo – an equal chance numbers game played in many parts of the world – is overlooked in these conversations about gambling and political economy. Bingo Capitalism challenges that omission by asking what bingo in England and Wales can teach us about capitalism and the regulation of everyday gambling economies.

General Equilibrium
By Yves Balasko
Summary via publisher (Agenda Publishing)
The theory of general equilibrium offers a simplified guide to how real economies function: it describes how price, demand, supply and production interact in multiple markets and tend towards a state of equilibrium. The first attempt to model this interaction was made in the late nineteenth century, but it remained a largely theoretical exercise until the computer age, when large amounts of data could be processed to model national economies on an unprecedented scale.
Yves Balasko, one of the key pioneers in the field, offers an accessible introduction to general equilibrium theory and some of its most important developments of the past fifty years. The book begins with an historical presentation of general equilibrium theory that includes the two theorems of welfare economics and also a new proof of the existence of an equilibrium. The central chapters examine the main results of the theory of general equilibrium that can be obtained by following the equilibrium manifold and natural projection approach. The final chapter demonstrates the potential for extending the general equilibrium model beyond the market economy by introducing uncertainty and contingent commodities.

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