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Book Reviews 285
Austen-Smith, D., and Banks, J. (1999): Positive Political Theory 1: CollectivePreferences. Ann Arbor: The University of Michigan Press.
Keiding, H. (1981): The Categorical Approach to Social Choice Theory.Mathematical Social Sciences 1: 177191.Miller, N. (1980): A New Solution for Tournaments and Majority Voting:Further Graph-theoretical Approaches to the Theory of Voting. American
Journal of Political Science 24: 6869.A. Trannoy, THEMA, Universite de Cergy-Pontoise, FranceChambers, R. G., and Quiggin, J.: Uncertainty, Production, Choice, andAgency The State-Contingent Approach. xiv, 373 pp. CambridgeUniversity Press, Cambridge. 2000. Hardcover 15.95.This ambitious book extends microeconomic theory. The authors aim to showthat the state-contingent approach provides the best way to think about allproblems involving uncertainty, including problems ofconsumer choice andprincipal-agent relationships (p. 4). They claim (p. 5) that this approachprovides insights that open the way for a whole host of developments in thebasic theory ofproduction under uncertainty, the theory ofhedging behavior,and the theory ofproduction insurance, all based on state-contingenttechnologies and preference structures general enough to subsume all cases.The authors do extend signicantly the theory ofeconomic choice underuncertainty by using the state-contingent approach, and show, in a theoreticalmanner, how it can be applied to production with future and forward markets,insurance, pollution regulation, and the moral-hazard problem involvingagency. The work advances much beyond the earlier theoretical insights ofArrow (1965), Debreu (1952), Hirshleifer (1965; 1966), and Yaari (1987),who are mentioned as forerunners of this approach. The book is a majorcontribution to the development ofthe microeconomics ofdecision-makingunder uncertainty and will be essential reading for those with special interestin this subject.Nevertheless, as admitted by the authors, reading this book can be difcultbecause it is based on the modern set-theoretic approach to productionrst part. All in all it is a valuable issue, with very well written articles thatcontain interesting value added to the existing literature. These articles areillustrative ofthe diversity oftechniques that are currently used in mathematical economics.References286 Book Reviewsproblems. Despite the fact that the authors give considerable care to theirexposition, those unfamiliar with this set theory would do well to read thetwo background books suggested by the authors before going much beyondchap. 2 ofthis book. This could restrict its use mostly to specialists. It is not asuitable book for economics undergraduates but should be accessible topostgraduates, ifthey have the requisite knowledge in modern set theory orare...