Thomas Schelling is a political economist "conspicuous for wandering"--an errant economist. In Choice and Consequence, he ventures into the area where rationality is ambiguous in order to look at the tricks people use to try to quit smoking or lose weight. He explores topics as awesome as nuclear terrorism, as sordid as blackmail, as ineffable as daydreaming, as intimidating as euthanasia. He examines ethical issues wrapped up in economics, unwrapping the economics to disclose ethical issues that are misplaced or misidentified.

With an ingenious, often startling approach,...