Recent years have seen the development of new theories of market failure based on asymmetric information and network effects. According to the new paradigm, we can expect substantial failure in the markets for labor, credit, insurance, software, new technologies and even used cars, to give but a few examples. This volume brings together the key papers on the subject, including classic papers by Joseph Stiglitz, George Akerlof and Paul David.

A Brookings Institution Press and American Enterprise Institute publication When should government intervene in market activity and when is it best to let market forces take their natural course? How does the existing empirical evidence about government performance guide our answers to these questions? In this clear, concise book, Clifford Winston offers his innovative analysis—shaped by thirty years of evidence—to assess the efficacy of government interventions. Markets fail when it is possible to make one person better off without making someone else worse off, thus indicating inefficiency. Governments fail when an intervention is unwarranted because markets are performing well or when the intervention fails to correct a market problem efficiently. Winston concludes from existing research that the cost of government failure may actually be considerably greater than the cost of market failure: "My search of the evidence is not limited to policy failures. I will report success stories, but few of them emerged from my search." The prevalence of market failure is due to a lack of conviction in favor of markets, the inflexibility of intervening government agencies, and political forces that enable certain interest groups to benefit at the expense of society as a whole. Winston suggests that government policy can be improved by making greater use of market-oriented solutions that have already produced benefits in certain situations.

The Law of Market Failure: Most new products will fail in the market, even if competently executed. Using his experience at Google, his remarkable success as an entrepreneur and consultant, and insights from his lectures at Stanford University and Google, Alberto Savoia’s The Right It offers an unparalleled approach to beating the beast that is market failure. Millions of people around the world are working hard to bring to life new ideas. Some of these ideas will turn out to be stunning successes that will have a major impact on our world and our culture: The next Google, the next Polio vaccine, the next Harry Potter, the next Red Cross, the next Ford Mustang. Others will be smaller, more personal but no less meaningful, successes: A little restaurant that becomes a neighborhood favorite, a biography that does not make the best-seller list but tells an important story, a local nonprofit to care for abandoned pets. At this very same moment, another group of people is working equally hard to develop new ideas that, when launched, will fail. Some of them will fail spectacularly and publicly: like New Coke, the movie “John Carter”, or the Ford Edsel. Others will be smaller, more private, but no less painful failures: A home-based business that never takes off, a children’s book that neither publishers nor children have any interest in, a charity for a cause that too few people care enough about. If you are currently working to develop a new idea, whether on your own or as part of a team, which group are you in? Most people believe that they either are, or will be, in the first group—the group whose ideas will be successful. All they have to do is work hard and execute well. Unfortunately, we know that this cannot be the case. The law of market failure tells us that up to 90 percent of most new products, services, businesses, and initiatives will fail soon after they are launched—regardless of how promising they sound, how much we commit to them, or how well we execute them. This is a hard fact to accept. We believe that other people fail because they don’t know what they are doing. Somehow, we believe that this does not apply to us and to our idea—especially if we’ve experienced victories in the past. Filled with detailed case studies, a lesson on creating your own hard data, a strategy for market engagement, and an introduction to the concept of a pretotype (not a prototype), The Right It is a groundbreaking, entertaining, and highly practical book delivers a proven formula for turning ideas, products, services, and businesses into successful endeavors. As Alberto writes, “make sure you are building The Right It before you build It right”.

Much of the debate about Asia's economic success has focussed on the respective roles of the market and state. It has been argued that industrial policy has helped address market failures and achieve critical coordination of development planning and process. Yet, starkly contrasting market and state ignores the way that both have been closely intertwined. Indeed, across the different economic and political systems in Asia, a common feature has emerged in which government and big, diversified and mostly family-owned business groups work in close connection to support their mutual interests. Through such ties, Asia has found a solution to many of the problems of economic development by a different type of coordination. Whilst highly effective in a phase of extensive growth, such connections carry less beneficial consequences. Not least, the accumulation of market power and the restraint of competition that result from preferential ties between business groups and political power. At the same time, the lock-hold of business groups limits growth in the formal economy, in employment whilst also stoking inequality. Further, as Asia searches for greater innovation to drive progress, such close ties are far more likely to stand in the way, deterring new entrants and holding back the creation of more broad-based innovation. Breaking down the entrenched power of connected business groups will require new policies that address head-on the distortions that these connections create. These include measures to deter recourse to the business group format itself.

This history of success in the United States illustrates the degree to which personal and professional accomplishments have determined overall life satisfaction. Beyond serving as a guide to the past, present, and future of success in America, especially that found in the business world, this book poses a provocative argument: the standard practice of employing outer-directed measures of success, notably wealth, power, and fame, has worked to the psychological disadvantage of many Americans. More specifically, it shows that a comparative and competitive view of success has made a significant number of individuals feel less successful than if more inner-directed measures were used. Ironically then, the traditional model of success in the United States has been largely a failure. This work offers historians, practitioners, and general readers of non-fiction a blueprint for how to adopt a more meaningful and positive model of success in their everyday lives.

In all of the contemporary economics textbooks that have been written there is typically at least one chapter that addresses "market failure." Markets Don't Fail is a response to what author Brian Simpson sees as a fundamental error in the thinking of some economists. The chapter titles of this book are crafted against the premises of "market failure" arguments, and a significant portion of this book focuses on exposing the invalid premises upon which the claims of market failure are based and providing a proper basis upon which to judge the free market. The material in this book provides a strong antidote to the arguments typically presented in contemporary economics textbooks. Through example and argument, Brian Simpson shows that the claims against the free market are not true. In fact, he demonstrates how free markets succeed, how they raise the standard of living of all individuals who live within them, and how free markets allow human life to flourish. However, the book goes much deeper than economics by providing a moral and epistemological defense of the free market. Markets Don't Fail gets to the fundamental, philosophical reasons why the claims of market failure are false and why markets actually succeed. Through an integration of economics and philosophy Simpson is able to provide a comprehensive, rigorous, and logically consistent defense of the free market. The specific topics covered in the book include monopoly, antitrust laws and predatory pricing, "externalities," the regulation of safety and quality, environmentalism, economic inequality, "public goods," and asymmetric information. This book is an invaluable tool for anyone who wants to gain a sound understanding of the free market.

Behind the alarming headlines about job losses, bank bailouts, and corporate greed is a little-known story of bad ideas. For fifty years or more, economists have been busy developing elegant theories of how markets work—how they facilitate innovation, wealth creation, and an efficient allocation of society's resources. But what about when markets don't work? What about when they lead to stock market bubbles, glaring inequality, polluted rivers, real estate crashes, and credit crunches? In How Markets Fail, John Cassidy describes the rising influence of what he calls utopian economics—thinking that is blind to how real people act and that denies the many ways an unregulated free market can produce disastrous unintended consequences. He then looks to the leading edge of economic theory, including behavioral economics, to offer a new understanding of the economy—one that casts aside the old assumption that people and firms make decisions purely on the basis of rational self-interest. Taking the global financial crisis and current recession as his starting point, Cassidy explores a world in which everybody is connected and social contagion is the norm. In such an environment, he shows, individual behavioral biases and kinks—overconfidence, envy, copycat behavior, and myopia—often give rise to troubling macroeconomic phenomena, such as oil price spikes, CEO greed cycles, and boom-and-bust waves in the housing market. These are the inevitable outcomes of what Cassidy refers to as "rational irrationality"—self-serving behavior in a modern market setting. Combining on-the-ground reporting, clear explanations of esoteric economic theories, and even a little crystal-ball gazing, Cassidy warns that in today's economic crisis, conforming to antiquated orthodoxies isn't just misguided—it's downright dangerous. How Markets Fail offers a new, enlightening way to understand the force of the irrational in our volatile global economy.

Paul Streeten is recognised as one of the profession's most eminent authorities on economic development. In these lectures he provides a major statement on his approach to the development problem, stressing that human development, not simply income growth, should be the focus of all strategies to eradicate hunger and poverty in the world. His argument assigns an important role to reformed government - both in providing social services and in facilitating the functioning of markets - in opposition to the prevailing idea that minimal government is more often than not the optimal solution. The role of small and larger firms, institutions, central and local government is also carefully examined. Streeten outlines a normative political economy - how to mobilise reformist alliances, how to use interest group, how to harness coalition - in the pursuit of effective development.