Book Reviews 217

matrices, with linear programming, and with standard theory from the convex analysis. Special attention is given to quasi-convex functions. The remaining part of the book, which appears to be completely indepen- dent of Chapter 1, is divided as follows. Chapters 2 and 3: "Nonnegative Matrices" and "Some Special Matrices" (page 74 to 115), present much recent material about P-, NP-matrices and their variants. In Chapter 4: "Stability Analysis of Some Dynamic Systems" (page 115 to 176), some ordinary (linear) differential equations are studied. Attention is given to special differential equations appearing in some 't~tonnement' processes. Finally, the theory of Chapters 2, 3 and 4 is applied to the economically oriented Chapters 5 and 6: '~leoelassical Economics- Statics" and "Neoclassical Economics- Dynamics" (page 176 to 219).

As suggested before, the book hardly can be taken as an introduction to mathematical economics. I think that only with a certain overview in the field one might appreciate the selection of the topics and their - sometimes t ir ing- elaboration. However, as an expos~ about recent developments in this particular field, Kemp and Kimura's book can be important to specialists.

Finally, as real introductions to mathematical economics the books of Debreu: "Theory of Value", or Hildenbrand and Kirman: "Introduction to Equili- brium Analysis", or, for instance, Malinvaud: "Lec- tures on Microeconomics Theory" will do a better job.

J.J.M. E VERS Twente University of Technology Enschede, Netherlands

S.A. LIPPIVlAN and J 3. McCALL (Eds.) Studies ha the Economics of Search North-Holland, Amsterdam, 1979, viii + 22.5 pages, US $ 41.50, Dfl. 85,-.

This book contains a set of essays on the theory ot! search. The classical statement of the problem to which several of the papers revert, is contained in a paper by G3. Stigler ("The Economics of Informa- tion", Journal of Political Economy 69 (1961)) which deals with a consumer searching for the lowest price. In the problem of job-search an individual is seeking employment in a market about which he knows only the distribution function of wages; he

proceeds by randomly applying for positions one at a time and he has to decide when to terminate the search. The theory allows both the case of recall in which the searcher may accept any previous offer and that of non-recall in which an offer must either be accepted immediately or lost forever. From one point of view the theory of search is sequential decision making under uncertainty, and is amenable to treat- ment by dynamic programming.

The first introductory chapter summarizes results for the standard search model and gives excellent summaries of the nine following chapters. The state-- ment is made that "seach theory rather than being a special topic of economic inquiry is an essential i~lgredient of any economic model of individual behaviour under uncertainty".

R.C. Kormendi (Chapter 4) uses search theory to model markets. He leaves behind classical models in which there is perfect information and a 'perfect' market and asks questions about the nature of price formation and the exchange process. In classical theories of competition risk aversion does not influence resource-allocation. Kormendi shows how. ever that the greater the risk aversion the greater is the frequency of trade and the higher are the prices paid and goods flow with higher probability to uses with higher values.

J.B. Wharton (Chapter 5) examines a model of a market for labour services which he develops as a f'mite-state Marker chain. His model gives a new view of the processes of market interaction between price setting, the coming together of buyer and seller and price adjustment.

In the final chapter on "Unemployment in service and job search" Kathleen P. Classen analyzes the effects of unemployment insurance using actual data for the States of Arizona and Pennsylvania. Unem- ployment benefit can be used by governments to modify conditions in the labour market. In models of job search an increase in the benefits leads to an increase in the reservation wage, a possible decrease in the keenness of unemployed persons to seek employ- ment and an increase in the expected duration of un- employment. Using a dynamic programming model Classen examines the data and concludes that this is so, but her model gives results disagreeing with other studies that have found that increasing benefits have a positive effect on wages expected and obtained subse- quent to unemployment.

Operational researchers will find much to interest them in this book and will find many ideas of

218 Book Reviews

practical usefulness even though the emphasis is naturally more towards theoretical and applied economic analysis and econometrics.

Andrew YOUNG New University o f Ulster Coleraine, IV. Ireland

H. ALBACH and G. BERGENDAHL (Eds.) Production Theory and Its Applications: Proceedings of a Workshop Volume 139 in: Lecture Notes in Economics and Mathematical Systems Springer, Berlin, 1977, viii + 186 pages, DM 18.-.

This small volume, which appeared as Volume 139 in the series Lecture Notes in Economics and Mathe- matical Systems contains the proceedings of a work- shop organised by the European Institute for Advanced Studies in Management in Brussels (Novem- ber 1974). The meeting was arranged around the theme "Production Theory and its Applications". There were two sub-sections, one concerning "Indus- trial Production Problems" and the other on "Produc- tion Problems in Universities".

Five papers appear in the "Industrial" section. The first is by H. Albach on the optimal volume of coal production in the Federal Republic of Germany. It is a report on the methods used and the results of a consulting job with the German coal industry. The optimal volume of coal production in the future had to be determined. Also it had to be decided how inany coal mines had to be dosed down. Three differ- ent models were considered. The second paper by K i,. Y-,Jstner deals with optimization problems in a queueh~g system with breakdowns. A production system with several machines is attended by a com- mon repair facility. The machines work indepen- dently and the performance of the system is analysed when different types of repair systems are tried out. This complex system may be split up into parts that can be solved more easily. By recombining them results for the system as a whole can be found. The third paper by K.H.F. Meyer is about a queueing model in the tea industry, where transportation facilities are limited by a fixed number of available trucks. These trucks collect baskets of tea leaves at the plantations and convey them to the tea factory. The optimal service rate of the unloading facility and optimal number of trucks had to be determined. Since the total cyclic queueing model is very complex, two approximate models were investigated. A good

solution for the original problem could be found. The fourth pa?~ by M.R. Wolff considers a self-contained production aevice requiring occasional readjustments to cut back operating and reject costs. The readjust- ments entail strictly increasing operating costs, down- time intervals composed of two random parts (one for readjustment time and one for set-up time)and readjustment costs composed of two random parts (one for materials and labour and an independent cost). A special case is considered for linear cost- and down-time functions. The last paper in the industrial section deals with an age-dependent preventive main- tenance and read]~stment policy. The renewal sub- system may have stochastic breakdowns; with the readjustment sytem stochastic costs are associated. The author is W. Spickenheuer.

The papers presented give a good example how problems arising from practice should be handled. However, not all papers intend to develop systems for practical purpo3es.

The second part of the book is devoted to the difficult field of planning in universities. It is formed by four coherent papers. W. Goldberg describes an experiment with a program planning and budget system in a Swedish university. The conclusion is that if such a system is to be a success many pre- requisites should be met. Obviously this was not the case in this experiment. W. Schtiler gives in his paper an input-output model of a university. The outputs are students, research projects and faculty administra- tion; the inputs are financial and ott~er resources like classrooms, laboratories etc. Determining the tech- nical coefficients of the input-output matrix does not seem to be a difficulty. In the paper of G. Fandel a multiple objective programming algorithm is used for the distribution of resources among teaching and research. A final paper by H. Albach considers input- output oriented models for the fo~anulation of an education policy in the Federal Republic of Germany.

With regard to university planning it must be remarked that a planning system supposes known goals to be achieved and people willing to co-operate in that operation. Since in many countries there are conflicting opinions about the tasks of a university, the education and the research programs, the ques. tion arises whether universities are already at such a stage that planning systems as described above are appropriate.

H.W. van den MEERENDONK Erasmus University R o tterdam, Netherlands