Price theory
a provisional text.
by Milton Friedman · first published 1962
75% recommend25% neutral
Why HN recommends it
Introductory-to-intermediate economics text that builds microeconomic reasoning from supply, demand, and exchange; readers are pointed to its early chapters and sample chapters on marginal utility and marriage.
Summarised by Claude from recommending comments
Concentrates on the pricing of final products and the theory of distribution.
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…utility, in order to be sure to have enough for purposes with higher utility (like drinking and cooking). So the marginal utility of water would still be equal to its price. See David Friedman's text, Price Theory; in particular Chapter 4: http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Cha... He discusses this exact case (diamonds vs. water).
on “Send Them Your Money: A Campaign to Send The RIAA/MPAA Billions” ↗If by this you mean that standard supply-demand economics can't model price discrimination, which is what's going on here, that's not correct. See, for example, Chapter 10 of David Friedman's Price Theory, where he models price discrimination using supply and demand curves just fine. In terms of this kind of analysis, price discrimination is a way for sellers to try to transfer as much as possible of what…
on “Maryland Is First to Ban A.I.-Driven Price Increases in Grocery Stores” ↗…priced!). Samuelson is definitely a formidable thinker and lays the groundwork for much later economic thinking. http://www.amazon.com/Worldly-Philosophers-Lives-Economic-Th... http://www.amazon.com/Price-Theory-Milton-Friedman/dp/020206... However if you go with the Samuelson, Fridman, and Heilbroner you'll be missing out on some key concepts relating to information and games, which are essential for understanding…
on “Good book for economics” ↗Price Theory: An Intermediate Text by David Friedman. Online version: http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC...
on “Good book for economics” ↗Also delightful, but significantly more advanced is David Friedman's Price Theory: http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC...
on “Economics in One lesson - Henry Hazlitt” ↗You might find David Friedman's chapter "The Economics of Love and Marriage" interesting http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Cha...
on “Marry Him: The case for settling for Mr. Good Enough” ↗…is losing would not enter into the exchange. It is an exchange that both people benefit from. This is examined in more detail in the first couple of chapters of http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC... (a textbook, not a blog post), but the short version is that due to the fact that different entities have different valuations on different items, free trade results in scenarios where both…
on “Swoopo: The crack cocaine of auction sites” ↗…from the input of the rest of the economy, is very wrong. Costco's bargaining power is an effect, not just a cause. I commend to you a lot of time with a textbook: http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC... And I remind, it is not necessarily because "economic theory" must be right... it is because it is objectively true that you don't understand it. Perhaps if you do, you will find you opinion…
on “Milton Friedman: How to Cure Health Care (2001)” ↗…clean and has a lot of other moving parts, just like everything else in the real world. Hie thee hence to a microeconomics textbook forthwith, I've been enjoying http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC... but heck anything would do.
on “Do We Need a 37-Cent Coin?” ↗…post-scarcity there will still be the little matter of time, and the trades thereof.) (If this interested you, I really recommend at least the first few chapters of http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC... .)
on “A World (Online) Without Money” ↗…really. You simply can not replicate the amount of information in a price in a centralized system, it's actually impossible. Walk through the first few chapters of http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC... . No, seriously, do it. The first few chapters are very basic and if you can just wave them away as "ideological" then we're done here anyhow. Prices contain a lot of information and no central…
on “On Moral Superiority” ↗…example the sample chapter of this book, which describes how the existence and prevalence of markup pricing was discovered independently several times over the past century. F. Lee, 1998, Post-Keynesian Price Theory https://assets.cambridge.org/97805213/28708/sample/978052132... Also see Nicholas Kaldor's Economics Without Equillibrium which can be read in an afternoon.
on “The paradoxical efficient market hypothesis (2024)” ↗For a readable introduction, I don't know of any better than Thomas Sowell's Basic Economics or David Friedman's Hidden Order: The Economics of Everyday Life (David Friedman's textbook Price Theory: An Intermediate Text is almost as readable and is here: http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC... )
on “Just how bad are hard drive prices going to get?” ↗> Where did you hear it? I've given it in an unusual phrasing, but what I've said is equivalent to what you will find in, say, David Friedman's Price Theory. > we must definitely define what "possibilities" in this context mean. To me it seems that there is far less wealth today than in the past. Nonsense. To give just one example: say you get a bacterial…
on “Jevons Paradox” ↗…profitable companies to weather short term undercutting by larger companies who can take the losses to kill a competitor This doesn't work in a free market. Look up David Friedman's discussion in, IIRC, Price Theory of competitors to Standard Oil. > the Exxon Valdeeze spill This was a product of ineffective government regulation, not a free market. In a free market Exxon would have been bankrupt after one such…
on “What Was Chevron Deference? (2023)” ↗