By L.L. Ivanov

ISBN-10: 0745801021

ISBN-13: 9780745801025

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**Sample text**

Discrimination entails the efficiency and equity of an entire economic system. In Chapter 14 Wan studies job discrimination caused by asymmetric information. His findings complement the ArrowPhelps theory of statistical discrimination. His approach can be traced to the concept of moral hazard that Arrow propagated in economics. According to the statistical discrimination theory, uninformed firms judge the worker's human capital by race or sex, and those who suffer such bias will cumulate less human capital, thus completing the vicious circle.

M. Spence, L. Summers and M. Weitzman were very helpful and their good advice and encouragement are deeply appreciated. I hope it will not be taken amiss if I thank collectively the many participants of the IMSSS summer economic seminars at Stanford for fruitful discussions over a Preface liii number of years. Such anonymity, however, cannot apply to the dynamic M. Kurz or to the perennial enfant-terrible-in-residence, F. H. Hahn. It is with much gratitude that I acknowledge the very beneficial and stimulating interchanges with G.

The following two chapters (32 and 33) illuminate Arrow's life-long attachment to Stanford University and his extraordinary services as a university citizen- an important facet of his life. In Chapter 34 we attempt a summary on a rather whimsical note. Again, a fitting conclusion to this volume is Part VI where Arrow reflects on those chapters that do not deal directly with his work or personality. ACKNOWLEDGEMENTS The advantages of division of labour is a commonplace in economics, generally traced to Adam Smith, but actually of much more ancient vintage going back at least as far as Plato.

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