The Undercover Economist: exposing why the rich are rich, the poor are poor--
and why you can never buy a decent used car! by Tim Harford

Rating(1-10): 9

Overall Summary

I liked this book a lot. He gives clear explanations of things and is very interesting.
Good stories but with arguments to back them up.

Chapter Summaries

1: Who Pays for Your Coffee?

A clear discussion of David Ricardo's model of rents and how it applies today
to coffee shops and immigration. He talks about scarcity power, the margins and competition.

2: What Supermarkets Don't Want You to Know

Information in the market and price discrimination. Very amusing discussion of coffee pricing.
Interesting facts about free-trade coffee.

3: Perfect Market and the "World of Truth"

Perfect markets and why they reveal the truth about what things are worth and how they are
efficient. Discussion of ways to modify the behavior markets when they do not seem fair but
still keep their efficiencies: the "head start theorem".

4: Crosstown Traffic

Externalities, externality charges and how they work. Problems with GDP.

5: The Inside Story

Information, Akerlof's "lemons" problem, problems with health care, moral hazards.
Keyhole economics as a fix for market problems. Basic idea: change as little as possible
and do not change the basic operations of the market, let that power work for you.

6: Rational Insanity

Financial markets. Efficient market hypothesis.

7: The Men Who Know the Value of Nothing

Game theory, theory of auctions. Fascinating.

8: Why Poor Countries Are Poor

Corruption and why it prevents economic development.

9: Beer, Fries and Globalization

Value of trade. Good discussion of comparative advantage. Globalization and ecology.

10: How China Grew Rich

History of how the introducing markets carefully.