A Rational Choice Reading List

BA 513: Ph.D. Seminar in Choice Theory

Professor Robert Nau
A RATIONAL CHOICE READING LIST
The monographs, edited volumes, and textbooks listed below include some of the readings for the course
and a good deal more. (Comments and suggestions for additional references are welcome. Last updated
August 2003.)
Foundations:

Studies in subjective probability / Edited by Henry E. Kyburg, Jr. and Howard E. Smokler. New York : Wiley,
1964 (Contains Ramsey's 1926 paper "Truth and Probability" that sketched the outline of an axiomatic
theory of subjective expected utility; de Finetti's 1937 paper on "Prevision" that presents two approaches to
the definition of subjective probability--axioms of comparative likelihood and coherent betting rates--as well
as the concept of exchangeability; Savage's 1971--and last--paper "Elicitation of Personal Probabilities and
Expectations," and other classics.)
Theory of games and economic behavior / John von Neumann and Oskar Morgenstern. Princeton, Princeton
university press, 1944/1947 (At long last--social physics from a real physicist. This book rejuvenated
cardinal utility theory and introduced game theory to economics and the other social sciences; the
introductory parts are great, the rest is nearly unreadable--too bad von Neumann didn't keep working in
this area! 1947 edition provided more detail on axioms of expected utility)
Social choice and individual values / Kenneth J. Arrow. New York : Wiley, 1951 (Since Arrow introduced his
impossibility theorem, the challenge has been to explain how rational persons can ever get along)
The foundations of statistics / Leonard J. Savage (The Bayesian bible: Savage merged von Neumann and
Morgenstern's axiomatization of expected utility with de Finetti's axiomatization of subjective probability in
order to build a rational foundation for statistics and decision analysis; only the first half matters, the rest is
an abortive attempt to rescue classical statistics)
Games and decisions / Duncan Luce and Howard Raiffa (Still fresh and readable after all these years; one
is struck by the maturity of the field in 1957 and the authors' insightful discussion of its strengths and
weaknesses. Both Luce and Raiffa largely abandoned game theory and turned their attention to singleagent decision theory after writing this book. Raiffa became a pioneer in the field of Bayesian decision
analysis while Luce did likewise in mathematical psychology.)
Foundations of social theory / James S. Coleman. Cambridge, Mass. : Harvard University Press, 1990. (The
Theory Of Everything from a rational choice perspective)
Edited volumes:

Rational Man and Irrational Society? An introduction and sourcebook / edited by Brian Barry and Russel
Hardin. Beverly Hills : Sage Publications, 1982 (Good collection of essays on social dilemmas, including the
prisoner's dilemma, the voting paradox, and Arrow's impossibility theorem; nice commentary by the editors)
Rational choice / edited by Jon Elster. Oxford : B. Blackwell, 1986. (A selection of classic papers by Sen,
Harsanyi, Becker, March, Tversky and Kahneman, and others. Elster's introduction is a great summary of
rational choice orthodoxy.)
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A Rational Choice Reading List

Rational choice : the contrast between economics and psychology / edited by Robin M. Hogarth and Melvin
W. Reder. Chicago : University of Chicago Press, 1987. (Great collection of papers from a conference held
at the University of Chicago in October, 1985--many papers include discussion)
Decision making : descriptive, normative, and prescriptive interactions / edited by David E. Bell, Howard
Raiffa, and Amos Tversky. Cambridge [Cambridgeshire] ; New York : Cambridge University Press, 1988.
(Outstanding collection of papers based on a conference held at Harvard Business School in June 1983)
The Limits of rationality / edited by Karen Schweers Cook and Margaret Levi. Chicago : University of
Chicago Press, 1990. (Another good collection of competing views)
Rationality in Action / edited by Paul K. Moser. Cambridge : Cambridge University Press, 1990 (ditto)
Foundations of decision theory : issues and advances / edited by Michael Bacharach and Susan Hurley.
Oxford, UK ; Cambridge, Mass., USA : B. Blackwell, 1991. (A collection of papers on dynamic choice,
consequentialism, bargaining, etc.)
Decision making : alternatives to rational choice models / edited by Mary Zey. Newbury Park, Calif. : Sage,
1992. (Another anthology of articles offering divergent views of rational choice; Zey's rather shrill lead-off
essay shows how rational choice theory is perceived and misperceived by its critics)
The Theory of choice : a critical guide / Shaun Hargreaves Heap, Martin Hollis, Bruce Lyons, Robert
Sugden, and Albert Weale. Cambridge, MA : Blackwell, 1992. (A collection of articles by the authors giving a
broad survey of the field; accessible and non-technical)
Social Choice Re-examined: Proceedings of the IEA Conference held at Schloss Hernstein, Berndorf, near
Vienna, Austria / edited by Kenneth J. Arrow, Amartya Sen, and Kotaru Suzumura. New York, St. Martin's
Press, Inc., 1997
Economic theory and game theory:

Notes on the theory of choice / David M. Kreps. Boulder : Westview Press, 1988. (An "underground
classic." If you want axiomatics, this is the the place. Also contains a nice discussion of de Finetti's
exchangeability concept and its relevance for decision making)
Microeconomic Theory / Andreu Mas-Colell, Michael D. Whinston, and Jerry R. Green. Oxford University
Press. (The new bible in graduate micro courses.)
Microeconomic Analysis / Hal Varian. W.W. Norton, 1992 (The old bible, which introduced the invariance
principle into microeconomics: "It's all in Varian's" --Mark Machina.)
A course in microeconomic theory / David M. Kreps. New York ; London : Harvester Wheatsheaf, 1990.
(Another very good text: more up-to-date than Varian, more candid and readable than Mas-Colell et al.)
Game Theory: Analysis of Conflict / Roger Myerson. Harvard University Press, 1997. (Very clear
presentation of the most important concepts of game theory, more accessible to those whose home field is
OR/MS rather than economics.)
Game theory and economic modelling / David M. Kreps. Oxford : Clarendon Press ; New York : Oxford
University Press, 1990. (Even-handed discussion of successes and failures of game theory; urges caution in
applications of equilibrium analysis; genuflects in the direction of bounded rationality)
Game theory / Drew Fudenberg, Jean Tirole. Cambridge: MIT Press, 1991. (The standard game theory
text for economics grad students; lots of trees, a bit hard to see the forest.)
Game theory for applied economists / Robert Gibbons. Princeton University Press, 1992. (A more applied
treatment organized along the same lines as Fudenberg and Tirole)

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A Rational Choice Reading List

Fun and games: a text on game theory / Ken Binmore. Lexington, Mass.: D.C. Heath & Co., 1992. (Fun
reading!)
Game Theory and the Social Contract, Vol. 1: Playing Fair / Ken Binmore. MIT Press, 1994. (Controversial
application of game theory and evolutionary arguments in defense of Rawls' theory of social justice; more
entertaining reading.)
Game Theory and the Social Contract, Vol. 2: Just Playing / Ken Binmore. MIT Press, 1998 (More in the
same vein: "...offers a panoramic tour through a range of new and disturbing insights that game theory
brings to anthropology, biology, economics, philosophy, and psychology. It is essential reading for anyone
who thinks it likely that ethics evolved along with the human species.")
The Theory of Learning in Games / Drew Fudenberg and David K. Levine. MIT Press, 1998. (On the
cutting edge of recent developments in game theory.)
The strategy of conflict / Thomas C. Schelling. Cambridge : Harvard University Press, 1980, c1960.
Game theory in the social sciences : concepts and solutions / Martin Shubik. Cambridge, Mass. : MIT Press,
c1982.
Game theory for the social sciences / Herv Moulin. New York : New York University Press, 1986.
The New Palgrave : a dictionary of economics / edited by John Eatwell, Murray Milgate, Peter Newman.
New York : Stockton Press, 1987. (The separate volumes on "Utility and Probability" and "Game Theory"
are especially relevant to this course)
Foundations for financial economics / Chi-fu Huang, Robert H. Litzenberger. New York : Elsevier Science
Pub. Co., 1988. (Good although somewhat dated reference on the decision-theoretic foundations of finance)
The Winner's Curse: Paradoxes and Anomalies of Economic Life / Richard Thaler. Free Press, 1991.
(Collection of articles by one of the leaders of the field of behavioral economics. See also the earlier, more
technical collection Quasi-Rational Economics by the same author.)
The meaning of market process : essays in the development of modern Austrian economics / Israel M.
Kirzner. London ; New York : Routledge, 1992.
The handbook of experimental economics / John H. Kagel and Alvin E. Roth, editors. Princeton, N.J. :
Princeton University Press, 1995. (Good reference on experimental games and markets; excellent historical
survey of behavioral experiments by Roth)
Perspectives from behavioral psychology and sociology:
[This course will mainly cover normative rather than descriptive models of decision making--for the latter
you should take John Payne's BA 525 course--but the following are all good references, and we will draw
on their ideas to some extent.]

Judgement and choice : the psychology of decision / Robin M. Hogarth. Chichester [Eng.] ; New York : J.
Wiley, 1980.
Judgment under uncertainty : heuristics and biases / edited by Daniel Kahneman, Paul Slovic, Amos
Tversky. Cambridge ; New York : Cambridge University Press, 1982.
Rational choice in an uncertain world / Robyn M. Dawes. New York : Harcourt Brace Jovanovich, 1988.
Thinking and deciding / Jonathan Baron. New York : Cambridge University Press, 1988.
The adaptive decision maker / John W. Payne, James R. Bettman, Eric J. Johnson. New York, NY :
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A Rational Choice Reading List

Cambridge University Press, 1993.

A primer on decision making : how decisions happen / James G. March, with the assistance of Chip Heath.
New York : Free Press ; Toronto : Maxwell Macmillan Canada ; New York : Maxwell Macmillan International,
1994. (Recommended reading for normative decision theorists. Thanks to Chip for getting this in print!)
Models of bounded rationality, vol. 3: empirically grounded economic reason / Herbert A. Simon.
Cambridge, Mass.: MIT Press, 1997 (The section on "Behavioral economics and bounded rationality" is an
updated summary of Simon's fundamental contributions in this area.)
Perspectives from evolutionary psychology and cognitive neuroscience:
[Some of the most exciting developments in the study of human behavior in the last decade have come
from the emerging--and controversial--field of evolutionary psychology. Here is a guide to some key
references and key combatants.]

The Adapted Mind : Evolutionary Psychology and the Generation of Culture /Barkow, J.H., Cosmides, L. and
J. Tooby (eds.) New York: Oxford University Press, 1992. (An seminal and widely praised selection of
readings, including an introduction by the editors.)
Descartes' error : emotion, reason, and the human brain / Antonio R. Damasio. New York : G.P. Putnam,
1994. (A neuroscientist's view of rationality, emphasizing the importance of "gut feelings" and emotional
response in decision making. See also The Feeling of What Happens and Looking for Spinoza by the same
author.)
T he Moral Animal : Why We Are the Way We Are : The New Science of Evolutionary Psychology / Robert
Wright. New York: Vintage Books

Darwin's Dangerous Idea: Evolution and the Meanings of Life / Daniel Dennett. Touchstone Books, 1996.
(Excellent account of the implications of natural selection for human society. See also Freedom Evolves by
the same author.)
How the Mind Works / Steven Pinker. New York: W.W. Norton, 1995. (I highly recommend this book: it
is a wide-ranging and mind-bending survey of evolutionary psychology, emphasizing the hypothesis that the
human brain includes discrete organs adapted for particular forms of perception and decision-making.)
Blank Slate: The Modern Denial of Human Nature / Steven Pinker. New York: Viking Press, 2002. (Sequel
to How The Mind Works: makes the case that a good deal of human behavior is wired-in as a consequence
of biological rather than cultural evolution, contrary to much of received social theory.)
The following paper provides a nice summary of the debates that have occurred in this area in recent
years, especially between evolutionary psychologists and the well-known evolutionist, Steven Jay Gould:
"Can Evolution Explain How the Mind Works? A Review of the Evolutionary Psychology Debates" by Melanie
Mitchell, Santa Fe Institute working paper, 1998. [abstract and full text of paper]
Here are some links to original materials from the debate:
Cognitive Cultural Studies Debate page, UC Santa Barbara (see the "adaptationist debate", especially the
response of Tooby and Cosmides)
New York Review of Books: articles by or in response to Steven Jay Gould (see especially the exchanges on
"the confusion over evolution" and "Darwinian fundamentalism" involving Dennett and Pinker)
Economic history:

Essays in the History of Economics / George Stigler. Chicago: University of Chicago Press, 1965 (Weighty
essays on subjects such as originality in scientific progress, the publishing habits of the great economists,
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A Rational Choice Reading List

and the history of utility theory)

Precursors in mathematical economics: an anthology , selected and edited by William J. Baumol and Stephen
M. Goldfeld. London, London School of Economics and Political Science, 1968. (Contains the English
translation of Bernoulli's 1738 paper , plus key papers of Edgeworth, Pareto, et al.,with commentary)
Preferences, utility, and demand; a Minnesota symposium. Edited by John S. Chipman [and others] New
York, Harcourt Brace Jovanovich [1971] (Contains the early papers on axiomatic decision theory by Alt and
Frisch, with commentary)
Against mechanism : protecting economics from science / Philip Mirowski. Totowa, N.J. : Rowman &
Littlefield, 1988. (Over-the-top criticism of neoclassical utility theory from the enfant terrible of economic
history)
More heat than light : economics as social physics : physics as nature's economics / Philip Mirowski.
Cambridge ; New York, NY, USA : Cambridge University Press, 1989. (Explores the idea that neoclassical
economics is rooted in an envy of 19 th century physics; overlaps with the 1988 book to some extent.)
Prisoner's dilemma / William Poundstone. New York : Doubleday, 1992. (Biography of John von Neumann
and history of the early years of game theory, with an emphasis on the literature of prisoner's dilemma
games)
"[game theorists] are often viewed by the professional students of man as precocious children
who, not appreciating the true complexity of man and his works, wander in wide-eyed
innocence, expecting that their toy weapons will slay live dragons just as well as they did
inanimate ones." --John Williams, RAND Corporation, 1954, quoted by Poundstone

A beautiful mind / Sylvia Nasar. New York : Simon & Schuster, 1998 (Fascinating biography of John Nash
and story of the 1995 Nobel prizes awarded to game theorists)
"You can only understand the Nash equilibrium if you have met Nash. It's a game and it's played
alone." --Martin Shubik, quoted by Nasar
Political science:
[This is not a political science course, but next to economics, political science is the field where rational
choice models have been most widely applied, and it has generated some lively debates about
methodology. The following books provide a perspective on some of this literature.]

Game theory and political theory : an introduction / Peter C. Ordeshook. Cambridge [Cambridgeshire] ; New
York : Cambridge University Press, 1986. (Good all-around introduction to rational choice methodology in
general, and especially as applied to political science)
"We must all realize that the days are gone in which political scientists could study their craft
while relaxing in a comfortable easy chair. Like our colleagues in science, engineering, and
economics, we must now study political theory and the cutting edge of our discipline while
sitting at a desk." --Peter Ordeshook

A political theory primer / Peter C. Ordeshook. New York : Routledge, 1992. (More readable--but somewhat
chastened--treatment of the same material as the 1986 book; a gentle introduction to applied game theory)
Game Theory for Political Scientists / James Morrow. Princeton: Princeton University Press, 1994.
Modern Political Economy / edited by J. Banks and E. Hanushek. New York: Cambridge University Press,
1995
Explaining Social Institutions / edited by J. Knight and I. Sened. Ann Arbor: University of Michigan Press,

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A Rational Choice Reading List

1995

Pathologies of rational choice theory : a critique of applications in political science / Donald P. Green and
Ian Shapiro. New Haven : Yale University Press, 1994. (Controversial attack on rational choice applications
in political science--and other disciplines too if you read between the lines)
"...the case has yet to be made that [rational choice] models have advanced our understanding
of how politics works in the real world. To date, a large proportion of the theoretical conjectures
of rational choice theorists have not been tested empirically. Those tests that have been
undertaken either have failed on their own terms or garnered theoretical support for
propositions that, on reflection, can only be characterized as banal: they do little more than
restate existing knowledge in rational choice terminology." --Green and Shapiro

The rational choice controversy : economic models of politics reconsidered / edited by Jeffrey Friedman.
New Haven, CT : Yale University Press, 1996. (Rebuttals to and rejoinders by Green and Shapiro--watch the
fur fly)
"A long time ago, when I took philosophy of science in graduate school, I remember reading or
hearing about the first law of wing walking. Simply stated, it advises: 'Don't let go of something
until you have something else to hold on to.'." --Kenneth Shepsle
"Shepsle's appeal to the first law of wing walking would be easier to take seriously if one could
develop a degree of confidence that the aircraft in question were indeed airborne." --Green and
Shapiro
Sociology:
[In addition to Coleman's monumental Foundations of Social Theory .]

Individual Interests and Collective Action / James S. Coleman. Cambridge: Cambridge University Press, 1986
(A collection of essays by Coleman; the introduction gives a candid account of his reasons for adopting
rational choice methods.)
Rational choice theory / edited by Peter Abell. Aldershot, Hants, England ; Brookfield, Vt., USA : E. Elgar,
1991
Rational choice theory : advocacy and critique / edited by James S. Coleman and Thomas J. Fararo.
Newbury Park, Calif. : Sage Publications, 1992 (A good collection of pro and con views; Bohman's
concluding essay on "The limits of rational choice explanation" is well reasoned.)
Rational choice theory and organizational theory : a critique / Mary Zey. Thousand Oaks : Sage
Publications, 1998
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