The Tyranny of the Market: Why You Can't Always Get What You Want

by Joel Waldfogel

Overview

Economists have long counseled reliance on markets rather than on government to decide a wide range of questions, in part because allocation through voting can give rise to a "tyranny of the majority." Markets, by contrast, are believed to make products available to suit any individual, regardless of what others want. But the argument is not generally correct. In markets, you can't always get what you want. This book explores why this is so and its consequences for consumers with atypical preferences.

When fixed costs are substantial, markets provide only products desired by large concentrations of people. As a result, people are better off in their capacity as consumers when more fellow consumers share their product preferences. Small groups of consumers with less prevalent tastes, such as blacks, Hispanics, people with rare diseases, and people living in remote areas, find less satisfaction in markets. In some cases, an actual tyranny of the majority occurs in product markets. A single product can suit one group or another. If one group is larger, the product is targeted to the larger group, making them better off and others worse off.

The book illustrates these phenomena with evidence from a variety of industries such as restaurants, air travel, pharmaceuticals, and the media, including radio broadcasting, newspapers, television, bookstores, libraries, and the Internet.

Product Details

ISBN-13:	9780674025813
Publisher:	Harvard University Press
Publication date:	10/15/2007
Edition description:	New Edition
Pages:	216
Product dimensions:	5.50(w) x 8.25(h) x 0.60(d)

About the Author

Joel Waldfogel is Professor of Business and Public Policy at The Wharton School, University of Pennsylvania.

Table of Contents

Preface

Introduction

Part I: Theory

1. Markets and the Tyranny of the Majority

2. Are "Lumpy" Markets a Problem?

Part II: Empirical Evidence

3. Who Benefits Whom in Practice

4. Who Benefits Whom in the Neighborhood

5. Preference Minorities as Citizens and Consumers

Part III: Market Solutions and Their Limits

6. Market Enlargement and Consumer Liberation

7. Fixed Costs, Product Quality, and Market Size

8. Trade and the Tyranny of Alien Majorities

9. Salvation through New Technologies

Part IV: Policy Solutions and Their Limits

10. Government Subsidies and Insufficient Demand

11. Books and Liquor: Two Case Studies

Conclusion

Notes

References

Index

What People are Saying About This

The Tyranny of the Market presents a fascinating account of why the market fails to satisfy preference minorities.

Austan Goolsbee

This is a book for all the people out there who sit down and flip through hundreds of channels but never seem to find something they like. In it Joel Waldfogel, one of America's most interesting economists, shows exactly how many people in the marketplace end up stranded, unable to get what they want. It's a provocative statement on why free markets don't necessarily make everyone better off.
— Austan Goolsbee, The University of Chicago Graduate School of Business

Fiona Scott Morton

The Tyranny of the Market presents a fascinating account of why the market fails to satisfy preference minorities.
— Fiona Scott Morton, Yale School of Management

Matthew Kahn

The Tyranny of the Market conveys an exciting debate focusing on whether "the market gets it right," allowing each type of consumer to achieve his own goals through participating in markets. An important book.
— Matthew Kahn, University of California, Los Angeles

Editorial Reviews

This is a book for all the people out there who sit down and flip through hundreds of channels but never seem to find something they like. In it Joel Waldfogel, one of America's most interesting economists, shows exactly how many people in the marketplace end up stranded, unable to get what they want. It's a provocative statement on why free markets don't necessarily make everyone better off.

Austan Goolsbee

Joel Waldfogel takes up the mythology of the market responding to our wants and desires, and shows how it often leaves out many people who are unable to get very much of what they want...This book could be very persuasive to those who will not listen to voices that have an explicitly progressive agenda.

Tikkun

The Tyranny of the Market presents a fascinating account of why the market fails to satisfy preference minorities.

Fiona Scott Morton

The Tyranny of the Market conveys an exciting debate focusing on whether "the market gets it right," allowing each type of consumer to achieve his own goals through participating in markets. An important book.

Matthew Kahn