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AcknowledgmentsWhen I reflect on it I am surprised at how much of what I write, including things that please me, I write at somebody's invitation. Julius Margolis asked me to use the Fels Lectures to collect some thoughts he knew I was working on; I might have collected them anyway, but I might not, and surely not so soon. Emmanuel Mesthene urged me earlier to put on paper some thoughts he knew I was working on; they are here too, perhaps only because he did. And some parts of this book, like Chapters 2 and 7, were more years getting straightened out than you might believe; if you like them you can thank a number of people who, while contributing^ ideas in private and in print, were especially generous with their enthusiasm, a nourishment without which I find it hard to work. They are Graham T. Allison, Philip B. Heymann, Mancur Olson, Howard Raiffa, Charles L. Schultze, Edith M. Stokey, A. Michael Spence, and Richard J. Zeckhauser.If the book reads well it is largely because Joyce Himtley Quelch types superb copy with such speed and good humor, while doing everything else that a secretary does, that I enjoyed the luxury of unlimited revisions.Parts of Chapters 3 and 4 were in Robin Marris (ed.). The Corporate Society (Macmillan, 1974) and are used here by permission of the President and Fellows of Harvard University. An earlier version of Chapter 5 was in Bela Balassa and Richard Nelson (eds.), Economic Progress, Private Values, and Public Policy (North-Holland Publishing Company, 1977). A longer version of Chapter 7 appeared asIWAS INVITED once to give a lecture to a large audience; the program was to begin at 8:00 in the evening. I followed my escort into the building through the stage entrance and stood in the wings as a microphone was put around my neck. I could see the first dozen rows : nobody had arrived. I assumed that 8:00 meant 8:15, as it might at an academic gathering, and was puzzled when my host walked on stage, nodded to the rows of empty seats, and went through the motions of introducing me. Resisting slightly, I was pushed gently out of the wings and toward the rostrum.There were eight hundred people in the hall, densely packed from the thirteenth row to the distant rear wall. Feeling a little as though I were addressing a crowd on the opposite bank of a river, I gave my lecture. Afterwards, I asked my hosts why they had arranged the seating that way.They hadn't.There were no seating arrangements and no ushers. The arrangement was voluntary, and could only reflect the preferences of the audience. What are we to suppose those preferences were?It is possible that everybody preferred the whole audience to pack itself into the two dozen rows toward the rear, leaving the first dozen vacant. But, except for any example he set, nobody controlled where anybody else sat. People did not vote with their bottoms on a seating plan. All they did was to choose where to sit from among the available seats they could see as they scanned the hall while walking down the aisle.Can we guess what policy people followed in choosing their seats? I should add that, as far as I could tell, nothing differentiated the people in different rows. People toward the front or rear did not seem to be older or better dressed or predominately male or female. Those in the frontthe thirteenth