The first two chapters of this little book are the Arrow Lectures I delivered in 1993 at the invitation of the Stanford Economics Department. I am grateful to Professor Gavin Wright and my other Stanford colleagues for giving me the opportunity to pay tribute to a splendid economist and a friend of 40plus years, and for the delightful few days my wife and I spent in Palo Alto on that occasion. The lectures are printed more or less exactly as I delivered them. This is not the result of mere

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... ess. I like the informal tone of spoken lectures because I fear that the formal style of journal articles and treatises tends to disguise the essentially exploratory, almost playful, character of all theory and makes it look more self-important than it can possibly be. It was clear to me from the start that the story I was telling would benefit from some numerical explorations. So, when Stanford University Press expressed an interest in publishing the lectures, I decided to complete them with a third "virtual" lecture describing the results of a series of computer simulav