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This article reconstructs Franco Modigliani's and Herbert Simon's close collaboration over the 1950s on implementation of a decision theory under uncertainty that partly contributed to the genesis of behavioral economics and rational expectations theory. Their collaboration reveals how the shared identification of uncertainty as a major problem, their similar interpretation of rationality as the ability to select and use relevant information, and their embrace of certain methodological norms for the construction of economic theory (that it should be empirically grounded and mathematically sophisticated) enabled productive cross-fertilization between the two approaches in their nascent forms. In the beginning Modigliani's forward-looking procedure (with its focus on foresight) and Simon's backward-looking model (with its focus on learning) were conceived as complementary rather than antithetical for the development of a concrete decision rule under the hypothesis of incomplete information. The article also discusses Modigliani's and Emile Grunberg's contribution to rational expectations, concentrating on the paper they wrote but never published, and Modigliani's early reaction to John Muth's rational expectations theory.

This article seeks to fill a lacuna within classical economics concerning the process of market price determination in situations of market disequilibrium. To this aim, first we distinguish the classical notion of free competition from the Walrasian notion of perfect competition and we argue that the latter is beset with some theoretical difficulties alien to the former. Second, we reconstruct in some detail Smith's and Marx's views concerning market price determination and show that Marx's extensive use of metaphors and numerical examples foreshadows the modern taxonomy of buyers' market, sellers' market, and mixed strategy equilibrium in the capacity space of a standard Bertrand duopoly model. Finally, we highlight similarities and differences between the classical notion of competition and contemporary Bertrand competition models.

Some novelists in the nineteenth century, for example Harriet Martineau and Charles Dickens, used fiction to illustrate the economic behavior postulated by the early political economists and their critics. "Realist" novelists later in this century and into the twentieth examined aspects of the economy as background for their storytelling. This essay looks at the work of two realist novelists who observed economic circumstances in their time with unusual subtlety and perception. Frank Norris in The Octopus, influenced perhaps by Thorstein Veblen, described western expansion in the United States on the new farms and ranches, driven by the railways. Then he examined the Chicago commodities exchange in The Pit as a manifestation of the new global economy. E.M. Forster, a friend of John Maynard Keynes, focused in Howards End on the hazards of unemployment and destruction of the environment in a modern market economy. In Passage to India he demonstrated that the notion of empire and of the white man's burden was obsolete. Neither of these novelists saw himself as a contributor to economics, but both contributed to the popular understanding of the economy.

What does it mean for a small bunch of civil service statisticians to observe something as huge as the whole American agriculture? What are the eyes that can see this? We answer this question focusing on the actual practice of statistical observation at the beginning of the twentieth century. We show that aggregating heterogeneous pieces of observation is necessary— even though it might seem paradoxical—and it requires the statistician be a very cunning observer.