The best books on economics and game theory

Avinash Dixit Author Of The Art of Strategy: A Game Theorist's Guide to Success in Business and Life
By Avinash Dixit

The Books I Picked & Why

Reinventing the Bazaar: A Natural History of Markets

By John McMillan

Reinventing the Bazaar: A Natural History of Markets

Why this book?

The right thinks markets are the magic solution to all problems; the left thinks they only let the rich exploit the poor. As always, the truth is more subtle. With rich details of how actual markets operate around the world, well grounded in modern economic theory of information and incentives, and written in a beautifully simple and engaging style, McMillan tells it like it is and explains why. If you have time to read only one book on economics, make it this one.


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The Strategy of Conflict

By Thomas C. Schelling

The Strategy of Conflict

Why this book?

This is the book that brought game theory to life. Eschewing dry mathematical theorems, and conducting rigorous logical analysis through rich examples of strategic use of threats, promises, and brinkmanship in real life, Schelling opened up a whole world of practical applications of the theory. My own thinking and writing about game theory owes a huge debt to Schelling. You should also read his “Arms and Influence,” “Micromotives and Macrobehavior,” and “Choice and Consequence.”


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A Splendid Exchange: How Trade Shaped the World

By William J. Bernstein

A Splendid Exchange: How Trade Shaped the World

Why this book?

A brilliant sweep through the millennia of commerce around the world. If you think globalization happened over the last quarter-century, you are wrong by about 5000 years. Find out how and why.


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Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

By Stephen J. Dubner, Steven D. Levitt

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

Why this book?

Levitt is a pioneer of, and among the most successful users of, techniques of data analysis to identify causes and effects in economics. This book, based on work that won him the Clark Medal, the economics profession’s premier prize for young researchers, gives us surprising, quirky, and delightful insights into the workings of many economic, political, and social phenomena.


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Where Are the Customers' Yachts?: Or a Good Hard Look at Wall Street

By Fred Schwed

Where Are the Customers' Yachts?: Or a Good Hard Look at Wall Street

Why this book?

Many financial advisers and brokers own yachts while most of their clients struggle to afford clunker cars. This book tells us why. Its exposures are just as valid today, and the writing just as hilarious to read.


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