Making Choices, Frederic Schick (Cambridge University Press)
For a short book, Frederic Schick’s Making Choices certainly covers a lot of ground in its attempt to explain and develop theories of decision taking. Basic ideas were painstakingly analysed and discussed and then in the light of additional arguments were yet further refined. In the end one was confronted with a giddy multi-layer of arguments and theories; no doubt reflecting the richness and diversity facing agents when confronted by choices. If I were to offer one criticism of the book it would be that there was no attempt at an introduction of the topics to be addressed and the reasons for their inclusion. While this may appear self-evident to a student of decision theory, to a layman, a better focus regarding the critical issues in this field would have helped to provide a better understanding of the unfolding arguments.
For a layman in this field, some of the initial ideas and arguments in Chapter Two (“Having Reasons”) make the initial going quite hard. However, the use of some wonderful examples and cases, to illustrate the problems and possible solutions, eased the journey through the earlier chapters considerably. Faced with having to grasp ever more complex arguments, the knowledge that yet another example was almost certainly “only just around the corner” allowed for a more relaxing read.
I felt the real strength of the book lay in Chapters 5 (“Other People”) and 6 (“Social Choice”), where Schick introduces the influence other people may have on our choices. It is here that most readers will undoubtedly feel able to apply the discussions to their own experiences and particular fields of knowledge. The approach taken is to introduce the reader to standard game theory, which can then be used to illustrate many of the possible problems and outcomes facing decision-makers. A game is a set of outcomes determined by the interaction of players (rivals) when confronted by choices. It can be applied to rival sets of lawyers, politicians, managers of firms, etc.
Schick examines variables that may result in optimal or sub-optimal outcomes for the players. I found the discussion particularly relevant to my field of oligopolistic interdependence, (competition amongst a few firms). In oligopoly structures, firms are faced with two fundamental choices: whether to collude (reasonably high profits and a quiet life) or whether to compete (a strategy of risks and just “normal” profits). The obvious collusion strategy is, however, complicated by the fact that there exist incentives for firms to renege on the agreement and realise very much higher profits, to the detriment of the loyal firms. This “prisoner’s dilemma” may, then, force firms to compete rather than seek the mutually beneficial collusion strategy. Schick’s discussions focusing on issues such as co-operation, proxies (agents who act for players, e.g. cartels), and fellowship were of particular interest in this area. It is a sobering thought that though economics has often been described as the study of choices, so little attention is paid in mainstream economics to a formal analysis of how these choices are determined.
In the final chapter (“Choosing Right”), Schick attempts to bring some of the strands together. Initially I had hoped that we would be guided to some firm conclusions and reasonably definitive answers to problems posed in the book. It was a mild disappointment to read a rather pessimistic and inconclusive final chapter; though I fully appreciate the reluctance of the author to recommend any glib and easy options. After all, as Schick concludes “No theory can cover all life…”
In conclusion this was a succinct and well-written book, keeping the reader’s attention throughout. Anyone with an interest in decision-making (all of us?) will undoubtedly develop a deeper and more appreciative understanding of the many issues and problems involved in this area of study.