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Brief Contents
Preface xiv
Chapter 1 Introduction 1
Chapter 2 Supply and Demand 8
Chapter 3 Applying the Supply-and-Demand Model 42
Chapter 4 Consumer Choice 72
Chapter 5 Applying Consumer Theory 107
Chapter 6 Firms and Production 147
Chapter 7 Costs 179
Chapter 8 Competitive Firms and Markets 220
Chapter 9 Applying the Competitive Model 262
Chapter 10 General Equilibrium and Economic Welfare 308
Chapter 11 Monopoly 344
Chapter 12 Pricing and Advertising 384
Chapter 13 Oligopoly and Monopolistic Competition 424
Chapter 14 Game Theory 468
Chapter 15 Factor Markets 505
Chapter 16 Interest Rates, Investments, and Capital Markets 530
Chapter 17 Uncertainty 561
Chapter 18 Externalities, Open-Access, and Public Goods 595
Chapter 19 Asymmetric Information 623
Chapter 20 Contracts and Moral Hazards 651
Chapter Appendixes A-1
Answers to Selected Questions and Problems A-29
Sources for Challenges and Applications A-46
References A-56
Definitions A-64
Index A-69
Credits A-96

v
xii Contents

Inflation and Discounting 539 Violations of Expected Utility Theory 586

APPLICATION Winning the Lottery 540 Prospect Theory 587
16.2 Choices over Time 541 CHALLENGE SOLUTION BP and Limited
Investing 541 Liability 589
Solved Problem 16.2 543 Summary 590 ■ Questions 591
Solved Problem 16.3 544
Rate of Return on Bonds 544 Chapter 18 Externalities, Open-Access,
★ Behavioral Economics: Time-Varying and Public Goods 595
Discounting 545
APPLICATION Falling Discount Rates CHALLENGE Trade and Pollution 595
and Self-Control 546 18.1 Externalities 596
16.3 Exhaustible Resources 546 APPLICATION Negative Externalities
When to Sell an Exhaustible Resource 547 from Spam 597
Price of a Scarce Exhaustible Resource 547 18.2 The Inefficiency of Competition with
APPLICATION Redwood Trees 550 Externalities 597
Why Price May Be Constant or Fall 551 18.3 Regulating Externalities 600
16.4 Capital Markets, Interest Rates, APPLICATION Pulp and Paper Mill
and Investments 553 Pollution and Regulation 602
Solved Problem 16.4 554 Solved Problem 18.1 603
CHALLENGE SOLUTION Should You Go to APPLICATION Why Tax Drivers 603
College? 555 Benefits Versus Costs from Controlling
Summary 557 ■ Questions 557 Pollution 604
APPLICATION Protecting Babies 604
Chapter 17 Uncertainty 561 18.4 Market Structure and Externalities 605
Monopoly and Externalities 605
CHALLENGE BP and Limited Liability 561
Monopoly Versus Competitive Welfare with
17.1 Assessing Risk 563 Externalities 606
Probability 563 Solved Problem 18.2 606
Expected Value 565 Taxing Externalities in Noncompetitive
Solved Problem 17.1 565 Markets 607
Variance and Standard Deviation 566
18.5 Allocating Property Rights to Reduce
17.2 Attitudes Toward Risk 567 Externalities 607
Expected Utility 567 Coase Theorem 607
Risk Aversion 568 APPLICATION Buying a Town 609
Solved Problem 17.2 570 Markets for Pollution 609
APPLICATION Stocks’ Risk Premium 571 APPLICATION Acid Rain Program 610
Risk Neutrality 572 Markets for Positive Externalities 610
Risk Preference 573 18.6 Rivalry and Exclusion 610
APPLICATION Gambling 573
Open-Access Common Property 611
17.3 Reducing Risk 574 Club Goods 612
Obtain Information 575 APPLICATION Piracy 613
Diversify 575 Public Goods 613
APPLICATION Diversifying Retirement Solved Problem 18.3 614
Funds 577 APPLICATION Radiohead’s “Public Good”
Buy Insurance 577 Experiment 615
Solved Problem 17.3 578 APPLICATION What’s Their Beef? 616
APPLICATION Flight Insurance 580 CHALLENGE SOLUTION Trade and Pollution 617
APPLICATION Limited Insurance
Summary 619 ■ Questions 620
for Natural Disasters 581
17.4 Investing Under Uncertainty 582 Chapter 19 Asymmetric Information 623
Risk-Neutral Investing 582
Risk-Averse Investing 582 CHALLENGE Dying to Work 623
Solved Problem 17.4 583 19.1 Adverse Selection 625
17.5 Behavioral Economics of Uncertainty 584 Adverse Selection in Insurance Markets 626
Biased Assessment of Probabilities 584 Products of Unknown Quality 626
APPLICATION Biased Estimates 585 Solved Problem 19.1 629
 Contents xiii

Solved Problem 19.2 629 CHALLENGE SOLUTION Changing Bankers’

19.2 Reducing Adverse Selection 630 Incentives 675
Restricting Opportunistic Behavior 630 Summary 676 ■ Questions 677
Equalizing Information 631
APPLICATION Changing a Firm’s Name 632 Chapter Appendixes A-1
APPLICATION Adverse Selection on eBay
Motors 633 Appendix 2A: Regressions A-1
Appendix 3A: Effects of a Specific Tax on
19.3 Price Discrimination Due to False Beliefs
Equilibrium A-3
About Quality 634
Appendix 4A: Utility and Indifference Curves A-4
APPLICATION Reducing Consumers’
Appendix 4B: Maximizing Utility A-6
Information 635
Appendix 5A: The Slutsky Equation A-8
19.4 Market Power from Price Ignorance 636 Appendix 5B: Labor-Leisure Model A-9
Tourist-Trap Model 636 Appendix 6A: Properties of Marginal and
Solved Problem 19.3 638 Average Product Curves A-10
Advertising and Prices 638 Appendix 6B: The Slope of an Isoquant A-10
19.5 Problems Arising from Ignorance Appendix 6C: Cobb-Douglas Production
When Hiring 638 Function A-10
Cheap Talk 639 Appendix 7A: Minimum of the Average
Education as a Signal 640 Cost Curve A-11
Solved Problem 19.4 642 Appendix 7B: Japanese Beer Manufacturer’s
Screening in Hiring 644 Short-Run Cost Curves A-11
CHALLENGE SOLUTION Dying to Work 646 Appendix 7C: Minimizing Cost A-12
Summary 647 ■ Questions 648 Appendix 8A: The Elasticity of the Residual
Demand Curve A-14
Appendix 8B: Profit Maximization A-15
Chapter 20 Contracts and Moral Hazards 651 Appendix 9A: Demand Elasticities
and Surplus A-15
CHALLENGE Changing Bankers’ Incentives 651 Appendix 11A: Relationship Between
20.1 The Principal-Agent Problem 653 a Linear Demand Curve and Its Marginal
Efficiency 654 Revenue Curve A-16
Symmetric Information 654 Appendix 11B: Incidence of a Specific
Asymmetric Information 655 Tax on a Monopoly A-16
APPLICATION Selfless or Selfish Doctors? 656 Appendix 12A: Perfect Price Discrimination A-17
Solved Problem 20.1 657 Appendix 12B: Group Price Discrimination A-18
20.2 Using Contracts to Reduce Moral Hazard 657 Appendix 12C: Block Pricing A-18
Fixed-Fee Contracts 658 Appendix 12D: Two-Part Pricing A-19
Contingent Contracts 659 Appendix 12E: Profit-Maximizing
Solved Problem 20.2 659 Advertising and Production A-19
Solved Problem 20.3 661 Appendix 13A: Nash-Cournot Equilibrium A-20
Solved Problem 20.4 663 Appendix 13B: Nash-Stackelberg
APPLICATION Contracts and Productivity Equilibrium A-22
in Agriculture 664 Appendix 13C: Nash-Bertrand Equilibrium A-23
Choosing the Best Contract 664 Appendix 15A: Factor Demands A-24
APPLICATION Music Contracts: Appendix 15B: Monopsony A-25
Changing Their Tunes 665 Appendix 16A: Perpetuity A-26
20.3 Monitoring to Reduce Moral Hazard 666 Appendix 18A: Welfare Effects of Pollution
Bonding 667 in a Competitive Market A-26
Solved Problem 20.5 668 Appendix 20A: Nonshirking Condition A-28
Deferred Payments 669
Efficiency Wages 669 Answers to Selected Questions and Problems A-29
Monitoring Outcomes 670 Sources for Challenges and Applications A-46
APPLICATION Abusing Leased Cars 671 References A-56
20.4 Checks on Principals 671 Definitions A-64
APPLICATION Layoffs Versus Pay Cuts 672 Index A-69
20.5 Contract Choice 674 Credits A-96
 Preface

When I was a student, I fell in love with microeconomics because it cleared up many
mysteries about the world and provided the means to answer new questions. I wrote
this book to illustrate that economic theory has practical, problem-solving uses and
is not an empty academic exercise.
This book shows how individuals, policy makers, lawyers and judges, and firms
can use microeconomic tools to analyze and resolve problems. For example, students
learn that
■ individuals can draw on microeconomic theories when deciding about issues
such as whether to invest and whether to sign a contract that pegs prices to the
government’s measure of inflation;
■ policy makers (and voters) can employ microeconomics to predict the impact
of taxes, regulations, and other measures before they are enacted;
■ lawyers and judges use microeconomics in antitrust, discrimination, and con-
tract cases; and
■ firms apply microeconomic principles to produce at minimum cost and maxi-
mize profit, select strategies, decide whether to buy from a market or to produce
internally, and write contracts to provide optimal incentives for employees.
My experience in teaching microeconomics for the departments of economics at MIT;
the University of Pennsylvania; and the University of California, Berkeley; the Depart-
ment of Agricultural and Resource Economics at Berkeley; and the Wharton Business
School has convinced me that students prefer this emphasis on real-world issues.

Features
This book differs from other microeconomics texts in three main ways:
■ It places greater emphasis than other texts on modern theories—such as indus-
trial organization theories, game theory, transaction cost theory, information
theory, contract theory, and behavioral economics—that are useful in analyzing
actual markets.
■ It uses real-world economic examples to present the basic theory and offers
extensive Applications to a variety of real-world situations.
■ It employs step-by-step problem-based learning to demonstrate how to use
microeconomic theory to solve business problems and analyze policy issues.

Modern Theories
This book has all of the standard economic theory, of course. However, what sets it
apart is its emphasis on modern theories that are particularly useful for understanding
how firms behave and the effects of public policy.
xiv
 Preface xv

Industrial Organization. How do firms differentiate their products to increase their

profits? When does market outcome depend on whether firms set prices or quantities?
What effects do government price regulations have on firms’ behavior? These and
many other questions are addressed by industrial organization theories.
Game Theory. What’s the optimal way to bid in an auction? How do firms set prices
to prevent entry of rival firms? What strategy should parents use when their college-
graduate child moves back in with them? Game theory provides a way of thinking
about strategies and it provides methods to choose optimal strategies.
Contract Theory. What kind of a contract should a firm offer a worker to induce
the employee to work hard? How do people avoid being exploited by others who
have superior information? Modern contract theory shows how to write contracts
to avoid or minimize such problems.
Behavioral Economics. Should a firm allow workers to opt in or opt out of a
retirement system? How should people respond to ultimatums? We address questions
such as these using behavioral economics—one of the hottest new areas of economic
theory—which uses psychological research and theory to explain why people deviate
from rational behavior.

Real-World Economics
This book demonstrates that economics is practical and provides a useful way to
understand actual markets and firms’ and consumers’ decisions in two ways. First,
it presents the basic theory using models estimated with real-world data. Second, it
uses the theory to analyze hundreds of real-world applications.
Using Estimated Models to Illustrate Theory. The basic theory is presented using
estimated demand curves, supply curves, production functions, and cost functions in
most chapters. For example, students see how imported oil limits pricing by U.S. oil
producers using estimated supply and demand curves, derive a Japanese beer manu-
facturer’s cost curve based on an estimated production function, examine regulation
of natural gas monopolies using estimated demand and cost curves, and analyze
oligopoly firms’ strategies using estimated demand curves and cost and profit data
from the real-world rivalries between United Airlines and American Airlines and
between Coke and Pepsi.
Applications. Applications use economic theory to predict the price effect of allow-
ing drilling in the Arctic National Wildlife Refuge based on estimated demand and
supply curves, demonstrate how iTunes price increases affect music downloads using
survey data, explain why some top-end designers limit the number of designer bags
customers can buy, measure the value of using the Internet, and analyze how a tariff
on chickens affects the importation of cars.

Problem-Based Learning
People, firms, and policy makers have to solve economic problems daily. This book
uses a problem-solving approach to demonstrate how economic theory can help them
make good decisions.
Solved Problems. After the introductory chapter, each chapter provides an average
of over five Solved Problems. Each Solved Problem poses a qualitative or quantita-
tive question and then uses a step-by-step approach to model good problem-solving
xvi Preface

techniques. These issues range from whether Peter Guber and Joe Lacob should
have bought the Golden State Warriors, how to determine Intel’s and AMD’s profit-
maximizing quantities and prices using their estimated demand curves and marginal
costs, and how regulating a monopoly’s price affects consumers and firms.
Challenges. Starting with Chapter 2, each chapter begins with a Challenge that
presents information about an important, current real-world issue and concludes
with a series of questions about that material. At the end of the chapter, a Challenge
Solution answers these questions using methods presented in that chapter. That is, the
Challenge combines the approaches of Applications and Solved Problems to motivate
the material in the chapter. The issues covered include the effects from introducing
genetically modified foods, why Americans buy more e-books than do Germans, com-
paring rationing water to raising its price during droughts, whether higher salaries
for star athletes raise ticket prices, whether it pays to go to college, and how Heinz
can use sales to increase its profit on ketchup.
End-of-Chapter Questions. Starting with Chapter 2, each chapter ends with an
extensive set of questions, many of which are based on real-world problems. Each
Solved Problem and Challenge has at least one associated end-of-chapter question
that references them and asks students to extend or reapply their analyses. Many
of the questions are related to the Applications. Answers to selected end-of-chapter
questions appear at the end of the book, and all of the end-of-chapter questions are
available in MyEconLab for self-assessment, homework, or testing.

What’s New in the Seventh Edition

The Seventh Edition is substantially updated and modified based on the extremely
helpful suggestions of faculty and students who used the first six editions. Four major
changes run throughout the book:
■ All chapters are revised, and all but two are substantially revised.
■ All the Challenges and almost all the examples and Applications throughout
the book are updated or new.
■ The book has a significant number of new Solved Problems.
■ The end-of-chapter questions are arranged by subject headings, new questions
have been added, and many others updated.

Challenges, Solved Problems, and Questions

All of the Challenges are new or updated. Because many users requested more Solved
Problems, I increased the number of Solved Problems in this edition to 106 from 94
in the previous edition. In addition, many other Solved Problems are new or substan-
tially updated and revised. Starting in this edition, every Solved Problem has at least
one associated Question at the end of the chapter.
About 40% of these Solved Problems are tied to real-world events. Many of these
are associated with an adjacent Application or examples in the text. In addition to the
Challenges, examples of a paired Application and Solved Problem include an inves-
tigation into whether farmers benefit from a major drought, the effect of oil drilling
in the Arctic National Wildlife Refuge on prices, the opportunity cost of getting an
MBA, the social cost of a natural gas price ceiling, Apple’s iPad pricing, and the price
effects of reselling textbooks bought abroad in the United States.
 Preface xvii

Starting with Chapter 2, the end of each chapter has an average of over 40 verbal,
graphical, and mathematical Questions. This edition has 769 Questions, 61 more
than in the previous edition. Over 27% of the Questions are new or updated. Many
of these Questions are based on recent real-life events and issues drawn from news-
papers, journal articles, and other sources.

Applications
The Seventh Edition has 131 Applications, 5 more than in the previous edition. Of
these, 46% are new and 45% are updated, so that 91% are new or updated. The vast
majority of the Applications cover events in 2012 and 2013, a few deal with historical
events, and the remaining ones examine timeless material.
To make room for the new Applications, 27 older Applications from the Sixth
Edition were moved to MyEconLab. Also, several new ones have been added to the
hundreds of Applications and other materials in MyEconLab.

Behavioral Economics
The Seventh Edition has a revised treatment of behavioral economics in the chapters
on consumer choice, monopoly, interest rates, and uncertainty. It also adds a new
behavioral economics section in the game theory chapter.

New and Revised Material in Chapters

Every chapter is revised—including most sections. Virtually every chapter has updated
examples and statistics. Some of the larger changes include:
■ Chapters 2 and 3 use two new empirical studies (avocados and corn) to illus-
trate the basic supply and demand model. They have four new and a number
of revised Solved Problems.
■ Chapters 4 and 5 have three new Solved Problems and extensive updating of
data. Chapter 5 has a new section on compensating and equivalent variations.
■ Chapter 6 adds many new estimated production functions and a new discussion
of returns to scale as a function of firm size.
■ Chapter 7 has substantially revised sections on effects of taxes on costs, long-
run costs, and learning by doing. It uses a new Japanese beer empirical example
to illustrate the theory, and has a new Solved Problem.
■ Chapter 8 has new statistics and a new Solved Problem. Several sections are
substantially revised, including an extended treatment of the shutdown decision.
■ Chapter 9 updates many statistics and has substantially revised sections on
rents, price effects on consumer surplus, and trade, and the Challenge Solution.
The trade section uses a new empirical oil example.
■ Chapter 10 has a revised Challenge Solution and a new Solved Problem.
■ Chapter 11 is reorganized, revised, and updated, particularly the sections on
market failure and the causes of monopoly. The chapter has three new Solved
Problems, two of which now address the iPad.
■ Chapter 12 is completely reorganized and rewritten, particularly the group
discrimination section and the nonlinear pricing section, which is expanded. It
has a new Challenge.
■ Chapter 13 is reorganized. Revised sections include cartel, antitrust laws, merg-
ers, Cournot differentiated products, and Bertrand vs. Cournot.
xviii Preface

■ Chapter 14’s revision removes the discussion of iterative dominance (relying

on dominant strategy and best-response approaches), divides the treatment of
dynamic games into sections on repeated and sequential games, expands the
repeated game material, and adds a new behavioral game theory section.
■ Chapter 17’s major revision includes new section heads and significant revisions
to the sections on probability, attitudes toward risk, and behavioral economics.
The material on uncertainty and discounting is now on MyEconLab.
■ Chapter 18 updates the pollution data, has a new subsection on the benefits
versus costs from controlling pollution, and a new Solved Problem.
■ Chapter 19 is extensively revised and reorganized, with new material on insur-
ance markets and a rewritten section on reducing adverse selection.
■ Chapter 20 is fundamentally rewritten and has four new Solved Problems. The
first half of the chapter is entirely new.

Alternative Organizations
Because instructors differ as to the order in which they cover material, this text has
been designed for maximum flexibility. The most common approach to teaching
microeconomics is to follow the sequence of the chapters in the first half of this
book: supply and demand (Chapters 2 and 3), consumer theory (Chapters 4 and 5),
the theory of the firm (Chapters 6 and 7), and the competitive model (Chapters 8
and 9). Many instructors then cover monopoly (Chapter 11), price discrimination
(Chapter 12), oligopoly (Chapters 13 and 14), input markets (Chapter 15), uncer-
tainty (Chapter 17), and externalities (Chapter 18).
A common variant is to present uncertainty (Sections 17.1 through 17.3) immedi-
ately after consumer theory. Many instructors like to take up welfare issues between
discussions of the competitive model and noncompetitive models, as Chapter 10, on
general equilibrium and economic welfare, does. Alternatively, that chapter may be
covered at the end of the course. Faculty can assign material on factor markets earlier
(Section 15.1 could follow the chapters on competition, and the remaining sections
could follow Chapter 11). The material in Chapters 14–20 can be presented in a
variety of orders, though Chapter 20 should follow Chapter 19 if both are covered,
and Section 17.4 should follow Chapter 16.
Many business school courses skip consumer theory (and possibly some aspects of
supply and demand, such as Chapter 3) to allow more time for consideration of the
topics covered in the second half of this book. Business school faculty may want to
place particular emphasis on game and theory strategies (Chapter 14), capital markets
(Chapter 16), and modern contract theory (Chapters 19 and 20).
Optional, technically demanding sections are marked with a star (★). Subsequent
sections and chapters can be understood even if these sections are skipped.

MyEconLab
MyEconLab’s powerful assessment and tutorial system works hand-in-hand with this book.

Features for Students

MyEconLab puts students in control of their learning through a collection of testing,
practice, and study tools. Students can study on their own, or they can complete
assignments created by their instructor. In MyEconLab’s structured environment,
 Preface xix

students practice what they learn, test their understanding, and pursue a personal-
ized study plan generated from their performance on sample tests and quizzes. In
Homework or Study Plan mode, students have access to a wealth of tutorial features,
including the following:

■ Instant feedback on exercises taken directly from the text helps students under-
stand and apply the concepts.
■ Links to the eText version of this textbook allow the student to quickly revisit
a concept or an explanation.
■ Enhanced Pearson eText, available within the online course materials and
offline via an iPad/Android app, allows instructors and students to highlight,
bookmark, and take notes.
■ Learning aids help students analyze a problem in small steps, much the same
way an instructor would do during office hours.
■ Temporary Access for students who are awaiting financial aid provides a grace
period of temporary access.

Experiments in MyEconLab
Experiments are a fun and engaging way to promote active learning and mastery of
important economic concepts. Pearson’s Experiment program is flexible and easy for
instructors and students to use.

■ Single-player experiments, which can be assigned for homework, allow students

to play against virtual players from anywhere at any time they have an Internet
connection.
■ Multiplayer experiments allow instructors to assign and manage a real-time
experiment with their classes.
■ Pre- and post-questions for each experiment are available for assignment in
MyEconLab.

For a complete list of available experiments, visit www.myeconlab.com.

Features for Instructors

MyEconLab includes comprehensive homework, quiz, text, and tutorial options, where
instructors can manage all assessment needs in one program.

■ All of the end-of-chapter questions are available for assignment and auto-grading.
■ All of the Solved Problems are available for assignment and auto-grading.
■ Test Bank questions are available for assignment or testing.
■ The Custom Exercise Builder allows instructors the flexibility of creating their
own problems for assignments.
■ The powerful Gradebook records each student’s performance and time spent
on the tests, study plan, and homework and can generate reports by student,
class, or chapter.
■ Advanced Communication Tools enable students and instructors to communi-
cate through email, discussion board, chat, and ClassLive.
■ Customization options provide new and enhanced ways to share documents,
add content, and rename menu items.
■ A prebuilt course option provides a turn-key method for instructors to create
a MyEconLab course that includes assignments by chapter.
xx Preface

Supplements
A full range of supplementary materials to support teaching and learning accompa-
nies this book.
■ The Online Instructor’s Manual revised by Jennifer Steele has many useful and
creative teaching ideas. It also offers a chapter outline, additional discussion
questions, additional questions and problems, and solutions for all additional
questions and problems.
■ The Online Solutions Manual provides solutions for all the end-of-chapter ques-
tions in the text.
■ The Online Test Bank by Shana McDermott of the University of New Mexico,
James Swanson of the University of Central Missouri, and Lourenço Paz of
Syracuse University features problems of varying levels of complexity, suitable
for homework assignments and exams. Many of these multiple-choice questions
draw on current events.
■ The Computerized Test Bank reproduces the Test Bank material in the
TestGen software, which is available for Windows and Macintosh. With
TestGen, instructors can easily edit existing questions, add questions, generate
tests, and print the tests in a variety of formats.
■ The Online PowerPoint Presentation by Ting Levy of Florida Atlantic
University contains text figures and tables, as well as lecture notes. These
slides allow instructors to walk through examples from the text during in-class
presentations.
These teaching resources are available online for download at the Instructor
Resource Center, www.pearsonhighered.com/perloff, and on the catalog page for
Microeconomics.

Acknowledgments
My greatest debt is to my students. My students at MIT, the University of Pennsyl-
vania, and the University of California, Berkeley, patiently dealt with my various
approaches to teaching them microeconomics and made useful (and generally polite)
suggestions.
The various editions have benefited from the early work by the two best devel-
opment editors in the business, Jane Tufts and Sylvia Mallory. Jane Tufts reviewed
drafts of the first edition of this book for content and presentation. By showing me
how to present the material as clearly, orderly, and thoroughly as possible, she greatly
strengthened this text. Sylvia Mallory worked valiantly to improve my writing style
and helped to shape and improve every aspect of the book’s contents and appearance
in each of the first four editions.
I am extremely grateful to Adrienne D’Ambrosio, Executive Acquisitions Editor,
and Sarah Dumouchelle, Editorial Project Manager, at Pearson, who helped me plan
this revision and made very valuable suggestions at each stage of the process. Adri-
enne, as usual, skillfully handled all aspects of planning, writing, and producing this
textbook. In addition, Sarah made sure that the new material in this edition is clear,
editing all the chapters, and assisted in arranging the supplements program.
Over the years, many excellent research assistants—Hayley Chouinard, R. Scott
Hacker, Guojun He, Nancy McCarthy, Enrico Moretti, Lisa Perloff, Asa Sajise, Hugo
Salgado, Gautam Sethi, Edward Shen, Klaas van ’t Veld, and Ximing Wu—worked
hard to collect facts, develop examples and figures, and check material.
 Preface xxi

Many people were very generous in providing me with data, models, and exam-
ples, including among others: Thomas Bauer (University of Bochum), Peter Berck
(University of California, Berkeley), James Brander (University of British Columbia),
Leemore Dafny (Northwestern University), Lucas Davis (University of California,
Berkeley), James Dearden (Lehigh University), Farid Gasmi (Université des Sci-
ences Sociales), Avi Goldfarb (University of Toronto), Claudia Goldin (Harvard
University), Rachel Goodhue (University of California, Davis), William Greene
(New York University), Nile Hatch (University of Illinois), Larry Karp (Uni-
versity of California, Berkeley), Ryan Kellogg (University of Michigan), Arthur
Kennickell (Federal Reserve, Washington), Fahad Khalil (University of Washington),
Lutz Kilian (University of Michigan), Christopher Knittel (University of California,
Davis), Jean-Jacques Laffont (deceased), Ulrike Malmendier (University of California,
Berkeley), Karl D. Meilke (University of Guelph), Eric Muehlegger (Harvard Univer-
sity), Giancarlo Moschini (Iowa State University), Michael Roberts (North Carolina
State University), Wolfram Schlenker (Columbia University), Junichi Suzuki (Uni-
versity of Toronto), Catherine Tucker (MIT), Harald Uhlig (University of Chicago),
Quang Vuong (Université des Sciences Sociales, Toulouse, and University of Southern
California), and Joel Waldfogel (University of Minnesota).
Writing a textbook is hard work for everyone involved. I am grateful to the many
teachers of microeconomics who spent untold hours reading and commenting on
proposals and chapters. Many of the best ideas in this book are due to them.
I am particularly grateful to Jim Brander of the University of British Columbia who
provided material for Chapters 13 and 14, has given me many deep and insightful
comments on many editions of this book, and with whom I wrote another, related
book. Much of the new material in this edition was jointly written with him. My
other biggest debt is to James Dearden, Lehigh University, who has made extremely
insightful comments on all prior editions and wrote some of the end-of-chapter
questions.
In earlier editions, Peter Berck made major contributions to Chapter 16. Charles
F. Mason made particularly helpful comments on many chapters. Larry Karp helped
me to develop two of the sections and carefully reviewed the content of several oth-
ers. Robert Whaples, Wake Forest University, read many chapters in earlier editions
and offered particularly useful comments. He also wrote the first draft of one of my
favorite Applications.
I am grateful to the following people who reviewed the book or sent me valuable
suggestions at various stages:

M. Shahid Alam, Northeastern University Jurgen Brauer, Augusta State University

Anne Alexander, University of Wyoming
Samson Alva, Boston College
Richard K. Anderson, Texas A & M University
Niels Anthonisen, University of Western Ontario
Wilma Anton, University of Central Florida
Emrah Arbak, State University of New York at Albany
Scott E. Atkinson, University of Georgia
Talia Bar, Cornell University
Raymond G. Batina, Washington State University
Anthony Becker, St. Olaf College
Robert A. Berman, American University
Gary Biglaiser, University of North Carolina, Chapel Hill
S. Brock Blomberg, Wellesley College
Hein Bogaard, George Washington University
Vic Brajer, California State University, Fullerton
Bruce Brown, Cal Polytech Pomona and UCLA
Cory S. Capps, University of Illinois, Urbana-Champaign
John Cawley, Cornell University
Indranil Chakraborty, University of Oklahoma
Leo Chan, University of Kansas
Joni S. Charles, Southwest Texas State University
Kwang Soo Cheong, University of Hawaii at Manoa
Joy L. Clark, Auburn University, Montgomery
Dean Croushore, Federal Reserve Bank of Philadelphia
Douglas Dalenberg, University of Montana
Andrew Daughety, Vanderbilt University
Carl Davidson, Michigan State University
Ronald Deiter, Iowa State University
Manfred Dix, Tulane University
John Edgren, Eastern Michigan University
xxii Preface
Patrick Emerson, University of Colorado, Denver
Xin Fang, Hawai’i Pacific University
Bernard Fortin, Université Laval
Tom Friedland, Rutgers University
Roy Gardner, Indiana University
Rod Garratt, University of California, Santa Barbara
Wei Ge, Bucknell University
Lisa Giddings, University of Wisconsin, La Crosse
J. Fred Giertz, University of Illinois, Urbana-Champaign
Haynes Goddard, University of Cincinnati
Steven Goldman, University of California, Berkeley
Julie Gonzalez, University of California, Santa Cruz
Rachel Goodhue, University of California, Davis
Srihari Govindan, University of Western Ontario
Gareth Green, Seattle University
Thomas A. Gresik, Pennsylvania State University
Jonathan Gruber, MIT
Steffan Habermalz, University of Nebraska, Kearney
Claire Hammond, Wake Forest University
John A. Hansen, State University of New York, Fredonia
Philip S. Heap, James Madison University
L. Dean Hiebert, Illinois State University
Kathryn Ierulli, University of Illinois, Chicago
Mike Ingham, University of Salford, U.K.
Samia Islam, Boise State University
D. Gale Johnson, University of Chicago
Erik Jonasson, Lund University, Sweden
Charles Kahn, University of Illinois, Urbana-Champaign
Vibha Kapuria-Foreman, Colorado College
Paula M. Kazi, Bucknell University
Carrie Kerekes, Florida Gulf Coast University
Alan Kessler, Providence College
Kristin Kiesel, California State University, Sacramento
Kate Krause, University of New Mexico
Robert Lemke, Lake Forest College
Jing Li, University of Pennsylvania
Qihong Liu, University of Oklahoma
Zhou Lu, City College of New York
Fred Luk, University of California, Los Angeles
Robert Main, Butler University
David Malueg, Tulane University
Steve Margolis, North Carolina State University
Kate Matraves, Michigan State University
James Meehan, Colby College
Claudio Mezzetti, University of North Carolina,
Chapel Hill
Chun-Hui Miao, University of South Carolina
Janet Mitchell, Cornell University
Felix Munoz-Garcia, Washington State University
Babu Nahata, University of Louisville
Kathryn Nantz, Fairfield University
Jawwad Noor, Boston University
Yuka Ohno, Rice University
Patrick B. O’Neil, University of North Dakota
John Palmer, University of Western Ontario
Christos Papahristodoulou, Uppsala University
Silve Parviainen, University of Illinois, Urbana-Champaign
Sharon Pearson, University of Alberta
Anita Alves Pena, Colorado State University
Ingrid Peters-Fransen, Wilfrid Laurier University
Jaishankar Raman, Valparaiso University
Sunder Ramaswamy, Middlebury College
Lee Redding, University of Michigan, Dearborn
David Reitman, Department of Justice
Luca Rigotti, Tillburg University
S. Abu Turab Rizvi, University of Vermont
Bee Yan Aw Roberts, Pennsylvania State University
Richard Rogers, Ashland University
Nancy Rose, Sloan School of Business, MIT
Joshua Rosenbloom, University of Kansas
Roy Ruffin, University of Houston
Matthew Rutledge, Boston College
Alfonso Sanchez-Penalver, University of Massachusetts,
Boston
George Santopietro, Radford College
David Sappington, University of Florida
Rich Sexton, University of California, Davis
Quazi Shahriar, San Diego State University
Jacques Siegers, Utrecht University, The Netherlands
Alasdair Smith, University of Sussex
William Doyle Smith, University of Texas at El Paso
Philip Sorenson, Florida State University
Peter Soule, Park College
Robert Stearns, University of Maryland
Jennifer Lynn Steele, Washington State University
Shankar Subramanian, Cornell University
Albert J. Sumell, Youngstown State University
Beck A. Taylor, Baylor University
Scott Templeton, Clemson University
Mark L. Tendall, Stanford University
Justin Tevie, University of New Mexico
Wade Thomas, State University of New York, Oneonta
Judith Thornton, University of Washington
Vitor Trindade, Syracuse University
Nora Underwood, University of California, Davis
Burcin Unel, University of Florida
Kay Unger, University of Montana
Alan van der Hilst, University of Washington
Bas van der Klaauw, Free University Amsterdam and
Tinbergen Institute
Andrew Vassallo, Rutgers University
Jacob L. Vigdor, Duke University
Peter von Allmen, Moravian College
Eleanor T. von Ende, Texas Tech University
Curt Wells, Lund University
Lawrence J. White, New York University
John Whitehead, East Carolina University
Colin Wright, Claremont McKenna College
Bruce Wydick, University of San Francisco
Peter Zaleski, Villanova University
Artie Zillante, Florida State University
Mark Zupan, University of Arizona
 Preface xxiii

In addition, I thank Bob Solow, the world’s finest economics teacher, who showed
me how to simplify models without losing their essence. I’ve also learned a great deal
over the years about economics and writing from my coauthors on other projects,
especially Dennis Carlton (my coauthor on Modern Industrial Organization), Jackie
Persons, Steve Salop, Michael Wachter, Larry Karp, Peter Berck, Amos Golan, and
Dan Rubinfeld (whom I thank for still talking to me despite my decision to write
this book).
It was a pleasure to work with the good people at Pearson, who were incredibly
helpful in producing this book. Marjorie Williams and Barbara Rifkin signed me to
write it. I would like to thank Donna Battista, Editor-in-Chief for Business Publishing,
and Denise Clinton, Publisher for MyEconLab, who were instrumental in making
the entire process work. Meredith Gertz did her usual outstanding job of supervising
the production process, assembling the extended publishing team, and managing the
design of the handsome interior. She makes the entire process as smooth as possible.
I thank Jonathan Boylan for the cover design. I also want to acknowledge, with
appreciation, the efforts of Melissa Honig, Noel Lotz, and Courtney Kamauf in
developing MyEconLab, the online assessment and tutorial system for the book.
Gillian Hall and the rest of the team at The Aardvark Group Publishing Services
have my sincere gratitude for designing the book and keeping the project on track
and on schedule. As always, I’m particularly thankful to work with Gillian, who is
wonderfully flexible and committed to producing the best book possible. Rebecca
Greenberg did a superior copyediting for this edition—and made many important
contributions to the content.
Finally, and most importantly, I thank my wife, Jackie Persons, and daughter,
Lisa Perloff, for their great patience and support during the nearly endless writing
process. And I apologize for misusing their names—and those of my other relatives
and friends—in the book!
J. M. P.
This page intentionally left blank
Introduction
An Economist’s Theory of Reincarnation: If you’re good, you come back on a
higher level. Cats come back as dogs, dogs come back as horses, and people—
if they’ve been really good like George Washington—come back as money.
1
If each of us could get all the food, clothing, and toys we wanted without work-
ing, no one would study economics. Unfortunately, most of the good things in life
are scarce—we can’t all have as much as we want. Thus, scarcity is the mother of
economics.
Microeconomics is the study of how individuals and firms make themselves as well microeconomics
off as possible in a world of scarcity and the consequences of those individual deci- the study of how indi-
viduals and firms make
sions for markets and the entire economy. In studying microeconomics, we examine themselves as well off
how individual consumers and firms make decisions and how the interaction of many as possible in a world of
individual decisions affects markets and the entire economy. scarcity and the conse-
Microeconomics is often called price theory to emphasize the important role that quences of those individ-
ual decisions for markets
prices play. Microeconomics explains how the actions of all buyers and sellers deter- and the entire economy
mine prices and how prices influence the decisions and actions of individual buyers
and sellers.

1. Microeconomics: The Allocation of Scarce Resources. Microeconomics is the study of In this chapter, we
the allocation of scarce resources. examine three main
topics
2. Models. Economists use models to make testable predictions.

3. Uses of Microeconomic Models. Individuals, governments, and firms use microeconomic

models and predictions in decision making.

1.1 Microeconomics: The Allocation

of Scarce Resources
Individuals and firms allocate their limited resources to make themselves as well
off as possible. Consumers pick the mix of goods and services that makes them as
happy as possible given their limited wealth. Firms decide which goods to produce,
where to produce them, how much to produce to maximize their profits, and how
to produce those levels of output at the lowest cost by using more or less of vari-
ous inputs such as labor, capital, materials, and energy. The owners of a depletable
natural resource such as oil decide when to use it. Government decision makers—to

1
2 CHAPTER 1 Introduction
market
an exchange mechanism
that allows buyers to trade
with sellers
benefit consumers, firms, or government bureaucrats—decide which goods and ser-
vices the government produces and whether to subsidize, tax, or regulate industries
and consumers.
Trade-Offs
People make trade-offs because they can’t have everything. A society faces three key
trade-offs:
■ Which goods and services to produce: If a society produces more cars, it must
produce fewer of other goods and services, because there are only so many
resources—workers, raw materials, capital, and energy—available to produce
goods.
■ How to produce: To produce a given level of output, a firm must use more
of one input if it uses less of another input. For example, cracker and cookie
manufacturers switch between palm oil and coconut oil, depending on which
is less expensive.
■ Who gets the goods and services: The more of society’s goods and services you
get, the less someone else gets.
Who Makes the Decisions
These three allocation decisions may be made explicitly by the government or may
reflect the interaction of independent decisions by many individual consumers and
firms. In the former Soviet Union, the government told manufacturers how many cars
of each type to make and which inputs to use to make them. The government also
decided which consumers would get a car.
In most other countries, how many cars of each type are produced and who gets
them are determined by how much it costs to make cars of a particular quality
in the least expensive way and how much consumers are willing to pay for them.
More consumers would own a handmade Rolls-Royce and fewer would buy a
mass-produced Ford Taurus if a Rolls were not 13 times more expensive than a
Taurus.
Prices Determine Allocations
Prices link the decisions about which goods and services to produce, how to produce
them, and who gets them. Prices influence the decisions of individual consumers and
firms, and the interactions of these decisions by consumers, firms, and the govern-
ment determine price.
Interactions between consumers and firms take place in a market, which is an
exchange mechanism that allows buyers to trade with sellers. A market may be a
town square where people go to trade food and clothing, or it may be an interna-
tional telecommunications network over which people buy and sell financial securi-
ties. Typically, when we talk about a single market, we refer to trade in a single good
or group of goods that are closely related, such as soft drinks, movies, novels, or
automobiles.
Most of this book concerns how prices are determined within a market. We show
that the number of buyers and sellers in a market and the amount of information
they have help determine whether the price equals the cost of production. We also
show that if there is no market—and hence no market price—serious problems, such
as high levels of pollution, result.
 1.2 Models 3

1.2 Models
Everything should be made as simple as possible, but not simpler.
—Albert Einstein
To explain how individuals and firms allocate resources and how market prices are
model
a description of the rela-
determined, economists use a model: a description of the relationship between two
tionship between two or or more economic variables. Economists also use models to predict how a change in
more economic variables one variable will affect another.

Application According to an income threshold model, no one who has an income level below a
particular threshold buys a particular consumer durable, such as a refrigerator or car.
Income Threshold The theory also holds that almost everyone whose income is above that threshold
Model and China buys the product.
If this theory is correct, we predict that, as most people’s incomes rise above the
threshold in emergent economies, consumer durable purchases will increase from
near zero to large numbers virtually overnight. This prediction is consistent with evi-
dence from Malaysia, where the income threshold for buying a car is about $4,000.
In China, incomes have risen rapidly and now exceed the threshold levels for many
types of durable goods. As a result, many experts correctly predicted that the greatest
consumer durable goods sales boom in history would take place there. Anticipating
this boom, many companies have greatly increased their investments in durable goods
manufacturing plants in China. Annual foreign direct investments have gone from
$916 million a year in 1983 to $116 billion in 2011. In expectation of this growth
potential, even traditional political opponents of the People’s Republic—Taiwan,
South Korea, and Russia—are investing in China.
One of the most desirable durable goods is a car. Li Rifu, a 46-year-old Chinese
farmer and watch repairman, thought that buying a car would improve the odds that
his 22- and 24-year-old sons would find girlfriends, marry, and produce grandchil-
dren. Soon after Mr. Li purchased his Geely King Kong for the equivalent of $9,000,
both sons met girlfriends, and his older son got married. Four-fifths of all new cars
sold in China are bought by first-time customers. An influx of first-time buyers was
responsible for China’s ninefold increase in car sales from 2000 to 2009. By 2010,
China became the second largest producer of automobiles in the world, trailing
only Germany. In addition, foreign automobile companies built Chinese plants. For
example, Ford invested $600 million in its Chongqing factory in 2012.1

Simplifications by Assumption
We stated the income threshold model in words, but we could have presented it
using graphs or mathematics. Regardless of how the model is described, an economic
model is a simplification of reality that contains only its most important features.
Without simplifications, it is difficult to make predictions because the real world is
too complex to analyze fully.
By analogy, if the manual accompanying your new TiVo recorder has a diagram
showing the relationships between all the parts in the TiVo, the diagram will be
overwhelming and useless. In contrast, if it shows a photo of the lights on the front

1The sources for Applications are available at the back of this book.
4 CHAPTER 1 Introduction

of the machine with labels describing the significance of each light, the manual is
useful and informative.
Economists make many assumptions to simplify their models.2 When using the
income threshold model to explain car purchasing behavior in China, we assume that
factors other than income, such as the color of cars, are irrelevant to the decision to
buy cars. Therefore, we ignore the color of cars that are sold in China in describing
the relationship between average income and the number of cars consumers want. If
this assumption is correct, by ignoring color, we make our analysis of the auto market
simpler without losing important details. If we’re wrong and these ignored issues are
important, our predictions may be inaccurate.
Throughout this book, we start with strong assumptions to simplify our models.
Later, we add complexities. For example, in most of the book, we assume that consum-
ers know the price each firm charges. In many markets, such as the New York Stock
Exchange, this assumption is realistic. It is not realistic in other markets, such as the
market for used automobiles, in which consumers do not know the prices each firm
charges. To devise an accurate model for markets in which consumers have limited
information, we add consumer uncertainty about price into the model in Chapter 19.

Testing Theories
Blore’s Razor: When given a choice between two theories, take the one that is
funnier.
Economic theory is the development and use of a model to test hypotheses, which
are predictions about cause and effect. We are interested in models that make clear,
testable predictions, such as “If the price rises, the quantity demanded falls.” A theory
that said “People’s behavior depends on their tastes, and their tastes change randomly
at random intervals” is not very useful because it does not lead to testable predictions.
Economists test theories by checking whether predictions are correct. If a predic-
tion does not come true, they may reject the theory.3 Economists use a model until
it is refuted by evidence or until a better model is developed.
A good model makes sharp, clear predictions that are consistent with reality.
Some very simple models make sharp predictions that are incorrect, and other more
complex models make ambiguous predictions—any outcome is possible—which are
untestable. The skill in model building is to chart a middle ground.
The purpose of this book is to teach you how to think like an economist in the sense
that you can build testable theories using economic models or apply existing models
to new situations. Although economists think alike in that they develop and use test-
able models, they often disagree. One may present a logically consistent argument that
prices will go up next quarter. Another, using a different but equally logical theory, may
contend that prices will fall. If the economists are reasonable, they agree that pure logic
alone cannot resolve their dispute. Indeed, they agree that they’ll have to use empirical
evidence—facts about the real world—to find out which prediction is correct.

2An economist, an engineer, and a physicist are stranded on a desert island with a can of beans but no

can opener. How should they open the can? The engineer proposes hitting the can with a rock. The
physicist suggests building a fire under it to build up pressure and burst the can open. The economist
thinks for a while and then says, “Assume that we have a can opener. . . .”
3We can use evidence on whether a theory’s predictions are correct to refute the theory but not to

prove it. If a model’s prediction is inconsistent with what actually happened, the model must be
wrong, so we reject it. Even if the model’s prediction is consistent with reality, however, the model’s
prediction may be correct for the wrong reason. Hence we cannot prove that the model is correct—we
can only fail to reject it.
 1.2 Models 5

Although one economist’s model may differ from another’s, a key assumption in
most microeconomic models is that individuals allocate their scarce resources so as
to make themselves as well off as possible. Of all affordable combinations of goods,
consumers pick the bundle of goods that gives them the most possible enjoyment.
Firms try to maximize their profits given limited resources and existing technol-
ogy. That resources are limited plays a crucial role in these models. Were it not for
scarcity, people could consume unlimited amounts of goods and services, and sellers
could become rich beyond limit.
As we show throughout this book, the maximizing behavior of individuals and
firms determines society’s three main allocation decisions: which goods are produced,
how they are produced, and who gets them. For example, diamond-studded pocket
combs will be sold only if firms find it profitable to sell them. The firms will make
and sell these combs only if consumers value the combs at least as much as it costs
the firm to produce them. Consumers will buy the combs only if they get more plea-
sure from the combs than they would from the other goods they could buy with the
same resources.

Positive Versus Normative

The use of models of maximizing behavior sometimes leads to predictions that seem
harsh or heartless. For instance, a World Bank economist predicted that if an African
government used price controls to keep the price of food low during a drought, food
shortages would occur and people would starve. The predicted outcome is awful, but
the economist was not heartless. The economist was only making a scientific predic-
tion about the relationship between cause and effect: Price controls (cause) lead to
food shortages and starvation (effect).
positive statement Such a scientific prediction is known as a positive statement: a testable hypothesis
a testable hypothesis about cause and effect. “Positive” does not mean that we are certain about the truth
about cause and effect
of our statement—it only indicates that we can test the truth of the statement.
If the World Bank economist is correct, should the government control prices?
If the government believes the economist’s predictions, it knows that the low prices
help those consumers who are lucky enough to be able to buy as much food as they
want while hurting both the firms that sell food and the people who are unable to
buy as much food as they want, some of whom may die. As a result, the government’s
decision whether to use price controls turns on whether the government cares more
about the winners or the losers. In other words, to decide on its policy, the govern-
ment makes a value judgment.
Instead of first making a prediction and testing it before making a value judgment
to decide whether to use price controls, the government could make a value judg-
ment directly. The value judgment could be based on the belief that “because people
should have prepared for the drought, the government should not try to help them
by keeping food prices low.” Alternatively, the judgment could be based on the view
that “people should be protected against price gouging during a drought, so the
government should use price controls.”
These two statements are not scientific predictions. Each is a value judgment or
normative statement normative statement: a conclusion as to whether something is good or bad. A nor-
a conclusion as to whether mative statement cannot be tested because a value judgment cannot be refuted by
something is good or bad
evidence. It is a prescription rather than a prediction. A normative statement con-
cerns what somebody believes should happen; a positive statement concerns what
will happen.
Although a normative conclusion can be drawn without first conducting a positive
analysis, a policy debate will be more informed if positive analyses are conducted
Another random document with
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and the promise of rich spoils induced him to follow the preceding
party, in contradistinction to which his stout and lusty recruits were
dubbed the ‘strong-backs.’[965] Hearing that two other vessels had
been fitted out to follow the Pánuco expeditions, and were probably
now cruising along the coast, Cortés ordered a crew to be sent in
pursuit, with the sole desire, as he expressed it, to save them from
the fate which had so nearly overtaken Camargo. One was never
heard of, and the other, the largest, entered the port before the
searching vessel had left, it seems, bringing about one hundred and
twenty men and sixteen horses. Camargo was induced to
remonstrate with the captain against proceeding to Pánuco, since
the result could only be disastrous, the native lord having, beside,
tendered allegiance to Cortés in Montezuma’s time.[966] But the
captain would not listen to him. To the joy of Cortés, however, a
storm arose, which obliged this captain to slip his anchor and put to
sea; obliged him to take refuge in San Juan de Ulua harbor, where
he found his vessel so unsafe as to require her to be stranded,
whereupon the forces and armaments were landed.[967] Cortés at
once sent a sympathizing message, offering the captain every
assistance, but never for a moment intending to give him any. He
even tendered other vessels for his voyage—so he tells the emperor.
[968]But there is no doubt that the tender was illusive, and that he
did all in his power, with bribery, promises, and even force, to secure
the men and armament, and at the same time to weaken his rivals
by their loss. According to some accounts he caused their vessels to
be sunk to prevent departure,[969] an act which Oviedo declares a
fair war measure, particularly on the part of Cortés, who greatly
needed reinforcements. Men destined for so comparatively
unattractive a region as Pánuco must have been pleased by the
prospect of ready spoils and Mexican treasures soon to fall into their
hands under so able and successful a leader as Cortés. They were
therefore readily induced to join him, the captains alone, as in the
last instance, interposing objections for a while. These several
accessions amounted, according to the testimony of Cortés, to about
two hundred men and some twenty horses,[970] together with a large
quantity of small-arms, artillery, and ammunition. Thus again and
again was the shrewd and lucky Cortés aided by the very means
which his great enemies and rivals had sent to be used against him;
aided to reap the advantages they had planned and plotted to
secure. And all the while he was pitting the antagonisms of native
foes one against another, employing them also to assist him in
securing the grand prize. Greatness is but another name for good
fortune. Circumstances certainly did as much for Cortés in promoting
success as Spanish arms and superior civilization.
Civilization! What fools we are, pluming ourselves in its radiance,
the radiance of ghastly electrical lights, adopted instead of the
glorious sun of nature. For is not the unartificial nature, and nature
God, while artifice is rather of the devil? And yet we persist in
glorifying artifice and calling it deity. The human sacrifice of the
Aztecs was a horrible rite, but in the hands of the Spaniards is not
Christianity a bloody mistress? And does not European civilization
constantly demand the sacrifice of millions of lives, if not for the
propitiation of gods, then to avenge an insult, to preserve the
integrity of a nation, or to gratify the spleen of rulers? At hand even
now, coming to the assistance of the magnificent Cortés,
civilization’s pride and pet for the moment, is another ally of
civilization, more terrible than horses, blood-hounds, gunpowder, or
steel. At the time of Narvaez’ departure for Cuba, small-pox was
raging there so severely that it offered a reason for preventing the
governor from leaving with the expedition. A pioneer vessel of the
fleet sowed the malady at Cozumel, whence it entered the continent.
Before it spread far in this direction Cempoala was infected by a
negro slave of Narvaez.[971] The Spaniards knew little about its
treatment, and that little they sought to impart, not for their own
safety, since those that were left of them were considered almost
proof against the malady, but for the sake of the allies. Their advice
did not avail much, however, for the natives were too devoted to their
panacea, the hot and cold bath, which only intensified the evil. The
terrible force of the first attacks of epidemics and endemics is well
known, and it has been advocated with apparent truth that the
diseases of a strong people fall with particular force on weaker
races. After desolating the coast region for some time, the small-pox
crossed the plateau border during the summer, and in
September[972] it broke out round the lakes, on its way to the
western sea, smiting high and low, rich and poor. For sixty days,
according to native records, the hueyzahuatl, or great pest, raged
here with such virulence as to fix itself a central point in their
chronology. In most districts, says Motolinia, over half the population
died, leaving towns almost deserted, and in others the mortality was
appalling. Those who recovered presented an appearance that
made their neighbors flee from them, until they became accustomed
to the sight. Learning how contagious was the disease, and terrified
by the number of deaths, the inhabitants left the bodies to putrefy,
thus aiding to extend the pest. In some cases the authorities ordered
the houses to be pulled down over the dead, so as to check the
contagion. Not the least of the evil was a famine, which resulted from
a lack of harvesters.[973]
Among the first victims at the capital were King Totoquihuatzin,
of Tlacopan, and Cuitlahuatzin, the successor of Montezuma. The
latter had ruled barely three months,[974] but sufficiently long to
prove himself a most able leader of his people in their struggle for
liberty, for he was brave, full of devices, and energetic, yet prudent; a
man who, not content with securing the expulsion of invaders, had
sought to strengthen his position with alliances and by attracting the
subject provinces through gifts, remissions, and promises. If he did
not succeed so well as he had hoped, the fault must be ascribed to
the reputation of the previous government and to dereliction of duty
among his officers.
As a monarch he would not have fallen far short of the native
ideal, for as a general he had distinguished himself; and, the brother
of Montezuma, he had in his court imbibed the dignity and majestic
manner born of constant adulation from subservient nobles and
plebeians. Crafty and unscrupulous, he appears not to have
hesitated at crime and breach of faith to secure his aims for personal
and state advancement. The flourishing condition of his own
province indicated a not unwise administrator; and the beauty of
Iztapalapan, its magnificent palaces, and exquisite gardens filled
with choice plants from different regions, pointed to a ruler of
cultivated taste.
There is no doubt that Mexico lost in him one of the most
promising of sovereigns, and perhaps the only leader capable of
giving her a longer lease of freedom in face of the irresistible
onslaught of foreigners.[975] Thus bravely worked the small-pox for
Cortés and the superior civilization.
The strongest candidate for the Mexican throne was now the
high-priest Quauhtemotzin,[976] a young man of about twenty-
three[977] years, rather handsome, of fairer complexion than the
average of his race, grave and dignified, as befitted a prince, and
‘quite a gentleman for an Indian.’ He is said to have been the son of
Montezuma’s sister by Itzquauhtzin, lord of Tlatelulco, the twin town
or suburb of Mexico, who had been fellow-prisoner of the late
emperor, and sharer in his fate.[978] The brothers and descendants
of Montezuma had been pretty well removed by death, or through
the machinations of Cuitlahuatzin; but if nearer legitimate claimants
existed, Quauhtemotzin had eclipsed them all in experience,
influence, and fame, as a brave and able leader. As the chief
companion of his predecessor, and one who even before the
appearance of the latter had led the uprising against the Spaniards,
he had become identified as a true patriot, keeping himself at the
head of the dominant party which began and continued the struggle
for freedom. In order further to secure his influence he had taken to
wife the only legitimate daughter of Montezuma, Princess Tecuichpo,
or Isabel; and although the marriage was merely nominal, she being
but a child, yet the alliance served the intended aim.[979] The
Tepanecs at the same time elected as successor to their king, his
son Tetlepanquetzaltzin,[980] whose coronation took place at the
same time as that of Quauhtemotzin, hallowed by the blood of
captive enemies, including no doubt some Spaniards. Cohuanacoch
had meanwhile been chosen at Tezcuco in lieu of the disowned
protégé whom Cortés had foisted upon them. By this trio were taken
up the plans of Cuitlahuatzin for the deliverance of the country from
her invaders, and especially were their efforts directed toward
securing the loyalty of provinces and allies which had been stirred by
the alarming progress of Spanish arms in Tepeaca.
A loss to the Spaniards through the epidemic, which outweighed
many a gain, was the death of Maxixcatzin, to whose devoted
friendship they chiefly owed their escape from the recent crises;[981]
for he it was who took the lead in offering the Tlascaltec alliance and
in overthrowing the inimical plans of the younger Xicotencatl in favor
of the Aztecs. When the sad news came, Cortés felt as if he had lost
a father, says Bernal Diaz, and mourning robes were donned by
quite a number of the captains and men. In this they felt the more
justified, since the chief, on finding himself stricken by the dread
disease, had expressed a wish to become a Christian, and with the
name of Lorenzo had received baptism at the hands of Olmedo, who
joyfully hastened to Tlascala to perform so welcome a service for the
Spaniards’ champion. He died exhorting his family and friends to
obey Cortés and his brethren, the destined rulers of the land, and to
accept their god, who had given victory over the idols.[982] It was
fortunate that he did not die before Spanish prestige had been
reëstablished by the Tepeaca campaign; for his friendship sufficed to
confirm the allies in their adhesion, to gain for the Spaniards further
coöperation, and to obtain for them a firm footing in the country.
The allied forces had become so numerous by the time Itzucan
fell that they were absolutely unmanageable, and on returning from
this place to Tepeaca Cortés dismissed them with friendly words to
their homes, retaining only the tried Tlascaltecs, who had become
efficient in the European style of warfare under the Spanish
discipline and tactics.[983]
Before the Quauhquechollan expedition summoned him away,
Cortés had begun a report to the emperor on the condition of affairs.
On returning, he completed this his second and perhaps most
interesting letter, dated at Segura de la Frontera, or Tepeaca,
October 30, 1520, wherein are related the occurrences since the
despatch of the first letter in the middle of July, a year before. “I write
your Majesty,” it states, “although poorly told, the truth of all that has
happened in these parts, and that which your Majesty has most need
of knowing. With the aid of God the conquest is progressing in this
new country, which from its similarity to Spain, in fertility, extent,
temperature, and many other things, I have called La Nueva España
del Mar Océano.” Then he proceeds to humbly beg his majesty to
confirm this name. In a brief supplementary letter he asks the
emperor to send a person of confidence to investigate and prove the
truth of his statements.[984]
The council also wrote a letter to the emperor, speaking
hopefully of the conquest, which already “extended, over one
hundred and fifty leagues of the coast, from Rio Grande de Tabasco
to Rio de Pánuco,”[985] while the remainder of the interior was on the
sure way to reduction, under the able leadership of Cortés, whose
valor and energy they praised.
 They prayed that he, the beloved of all the troops, might be
confirmed in the office of captain-general, as the only man whose
genius and experience could be relied on to carry out and maintain
the conquest. The natives being docile and ready to receive
conversion, friars should be sent to secure this harvest for the
church, and also to administer to the spiritual wants of the
Spaniards. Colonists were needed; also horses, and other live-stock
—the latter to be paid for at a future time—in order to secure the
country and develop its wealth.
With these letters went one from the army, which, recounting but
briefly the leading incidents of the campaigns, had for its main object
to decry Narvaez and Velazquez as the sole cause of all the
disasters that had occurred in the country, and to praise Cortés as a
noble, loyal, and able man, by whom alone the conquest could be
achieved.[986] These and other letters were intrusted to Alonso de
Mendoza, a townsman of Cortés, together with thirty thousand
pesos, in fifths and presents, and a number of commissions from
different members of the expedition. A well appointed vessel was
assigned for the voyage, and three other vessels were despatched
for Española, there to enlist recruits and to buy horses, arms and
ammunition, cattle, clothing, and other requirements, and four strong
vessels to maintain traffic with the Antilles. Letters were sent to
Licenciado Rodrigo de Figueroa and other royal officers on the
Island, inclosing duplicates of those forwarded to Spain; and a
number of specimens of the jewels, manufactures, and natural
resources of the country, were transmitted as presents and as
samples to allure recruits. The letters and the ample funds for the
enlistment and purchases were intrusted to Contador Ávila and
another officer,[987] with instructions to use every effort to confirm the
audiencia officials in their good opinion of Cortés, so that they might
plead his cause in Spain. The ill-treatment of Aillon by Velazquez
and Narvaez had already impelled them to do this, as we have seen.
Their advice was to be asked regarding the enslavement of rebels
and other measures, and their authority and aid sought for obtaining
men and stores.[988] Another vessel was sent under Solis[989] to
Jamaica to buy horses and war material. Bernal Diaz does not fail to
point out the evidence in the large remittance for Spain and the
Antilles of treasures secretly taken from Mexico by Cortés and his
clique, and accuses him of having appropriated also the share for
Villa Rica, claimed to have been captured by the Indians during its
transmission from Tlascala.[990]
No sooner were these preparations announced than Duero and
a number of others of the Narvaez party claimed a fulfilment of the
promise regarding their departure. The success of the Spanish arms
and the allurement of spoils had reconciled most of the lately
disaffected, so that those who now demanded to return were only a
few of the more wealthy. The services of these could be readily
dispensed with, now that such large reinforcements had been
received, and the display of their accumulations at home might
inspire fresh recruits. Therefore Cortés gave his consent, with
abundant promises that as soon as the conquest was fully
accomplished, gold and other rewards would flow on those who
supported his cause either in the Islands or in Spain. Leaders like
Duero and Bermudez were the chief recipients of such offers; and
offers alone they remained in most instances, for Cortés was not the
man to reward desertion. Duero and others evidently expected
nothing more, since they were soon after found arrayed on the side
of Velazquez. When some among the Cortés party raised objections
to this diminution of the force, they were quieted with the declaration
that the army was better rid of unwilling and inefficient soldiers,
whose presence served only to discourage others.[991]
The vessel for Spain and two of those for the Islands were
wrecked on the coast; and one consequence was that Mendoza’s
departure was delayed till the 5th of March. He took with him a
supplementary letter for the emperor, relating the progress so far
made for the recovery of Mexico. By this time Ordaz was, according
to Bernal Diaz, commissioned to join him and plead the cause of
Cortés before the emperor, and at the same time to receive the
reward for his many achievements, one of which was the ascent of
the volcano. Several of the Narvaez party appear to have left by the
same vessel.[992]
In course of the late campaign the advantages of the town of
Tepeaca for permanent occupation had become apparent, chiefly as
a point of observation for watching over the new conquest. It was
well situated for protecting the road to Villa Rica,[993] and for
communicating with Cholula and Tlascala, each capital eight or nine
leagues distant, and it lay in the midst of a fertile maize country,
which offered ample subsistence for a garrison. Although the
punishment at first inflicted, by sacking and enslaving, had been
severe, yet the treatment of the inhabitants became afterward so
considerate that they themselves prayed for a continuance of
Spanish protection.[994] Every circumstance, therefore, demanding a
settlement, it was decided in council to found a villa in this same
town, with the appropriate name of Segura de la Frontera, intended,
as it was, to secure the frontier against the Mexicans. Pedro de Ircio
was made alcalde, with Francisco de Orozco and others as
regidores.[995]
The campaign being practically concluded, a division was
ordered to be made of the spoils not hitherto distributed, including
slaves, which had now become a prominent feature thereof, and
were intended for personal and plantation service, as already
practised in the Antilles. The pretence was to enslave only the
inhabitants of districts concerned in the murder of Spaniards, but the
distinction was not very strictly observed, and rebellious tribes and
those addicted to cannibalism and other vicious practices were
included.[996] The Spaniards, as a rule, kept only the women and the
children, the men being transferred to the allies for their share,
“because they were difficult to watch,” says Bernal Diaz, “and
because their services were not needed while we had the
Tlascaltecs with us.”[997]
The soldiers were ordered to bring in all their captives, which
from the first had been branded for recognition with a ‘G,’ signifying
guerra, war.[998] When the day for distribution came, it was found
that the leaders and favored men had already secured their share by
appropriating the prettiest and choicest slaves. They had probably
been priced by the officials, and the leaders, being entitled to larger
shares, had secured the best articles. At this there was a
considerable uproar, increased by the outcry against the fifth set
apart for Cortés, after deducting the royal fifth.[999] How the matter
was settled is not clear, except that the general had recourse to the
soothing eloquence he knew so well how to apply, promising that for
the future he would conform to the general desire, which appeared to
be in favor of offering the slaves at auction, so as to arrive at their
proper value, and to give all members of the expedition an equal
chance in securing the more desirable.[1000]
One of the last expeditions fitted out at Segura was for the
reduction of the northern route to Villa Rica, by which the Spaniards
had first entered the plateau, and for the punishment of those
concerned in the murder of Alcántara and other Spaniards.[1001] It
set out in the beginning of December, under Sandoval, with two
hundred infantry, twenty horses, and the usual complement of allies,
and entered Xocotlan valley, which readily submitted, with the
exception of the main town, named Castilblanco during the first entry
into the country. The cacique, who had then already shown himself
unfriendly, rejected every proposition, with the threat that he would
make a feast on the commander and his followers, as he had on the
former party. There being no alternative, the cavalry charged the
large force which had taken up position near a ravine, on the
outskirts of the city, with a view to defend the entrance. Under cover
of the musketeers and archers, who from one side of the ravine did
considerable harm to the enemy, the charge succeeded, though four
riders and nine horses were wounded, one of the latter dying. The
enemy thrown into disorder fled to join the remaining garrison, which
occupied the temples on the plaza. With the aid of the infantry and
allies the stronghold speedily fell, and a number of prisoners were
secured.[1002]
Proceeding northward along the mountain border of the plateau
Sandoval added a considerable extent of country to his conquest,
meeting serious opposition only at Jalancingo, where the Aztec
garrison, ever since the beginning of the Tepeaca campaign, had
been employed in fortifying the place, and either considered
themselves secure or feared that a surrender would procure no
better terms, for them, at least. They were disconcerted by being
attacked on different sides, under native guidance, and after a brief
resistance took to flight, during which a number of them were
captured, the Spaniards losing three horses, and having eight men
severely injured, Sandoval receiving an arrow wound. In a temple
were found relics of slaughtered Spaniards, in the shape of dresses,
arms, and saddles.[1003] A few days later the expedition set out to
rejoin the army, with a large amount of spoils and a train of captives.
The chiefs were pardoned by Cortés, with politic regard for the
future, and enjoined to furnish their quota of supplies at Segura.[1004]
The head-quarters had meanwhile been removed to Tlascala,
preparatory to a march on Mexico, and Segura was now in charge of
the alcalde, Pedro de Ircio, lately lieutenant of Sandoval at Villa Rica,
assisted by the regidor, Francisco de Orozco, and sixty men,
including the invalids and the disabled.[1005] Cortés had left it in the
middle of December,[1006] taking with the cavalry the route through
Cholula,[1007] to settle the question of succession to a number of
cacique offices vacated during the epidemic. These appeals were
made to him not only as the representative of the Spanish monarch
to whom the people had sworn obedience, but as an
acknowledgment of his influence over the native mind. His treatment
of the conquered and his equitable decisions of disputes had made
him the umpire and king-maker whom not only allies, but half-
reconciled tribes were willing to heed, in private and public affairs.
Having made the appointments, and formed favorable arrangements
for himself, he rejoined the army. The march to Tlascala was one
befitting the return of conquering heroes. Triumphal arches covered
the roads, and processions came to chant the praises of the victors,
and recount the successes achieved by the Tlascaltec allies, as
shown by spoils and banners from different provinces and cities, and
by long files of captives. On nearing the republican capital the whole
population came forth to join in the ovation, and at the plaza an
orator stepped forward to greet Cortés in a glowing panegyric,
wherein he reviewed his progress as conqueror and avenger. In
reply Cortés alluded feelingly to the brotherhood between the two
races, now cemented by blood and victories, and to the common
loss sustained in the death of the wise and noble Maxixcatzin. These
words, added to the evidence of sorrow in the mourning array of their
dress and arms, left a most favorable impression on the minds of the
brave allies.
He was again called as representative of his king to appoint as
successor to Maxixcatzin his eldest legitimate son, a boy of twelve
years, against whom a claimant had arisen.[1008] This done, Cortés
dubbed him a knight, according to Castilian usage, in recognition of
the services of his father, causing him also to be baptized, with the
name of Juan, Maxixcatzin becoming the family name.[1009] Taking
advantage of the occasion and of his own popularity, the general
sought to inspire a more general feeling in favor of his religion, but
the effort met with little encouragement, and he wisely refrained from
pressing so dangerous a subject. According to Bernal Diaz, the elder
Xicotencatl was among the limited number of saved souls, and
received the name of Vicente.[1010] The native records, as given by
Camargo and Torquemada, and adopted by most writers, assume
that the four chiefs were all baptized at this time, if not earlier; but
they are neither clear nor consistent, and are evidently impelled by a
desire to redeem the native leaders from the charge of idolatry.
Cortés, Herrera, Diaz, and other chroniclers would not have failed to
record so large and prominent a conquest for the church, particularly
since the two latter do mention the exceptional converts.[1011] Cortés
also refers to a conversion in the person of Tecocoltzin, a younger
brother of King Cacama, and the future head of Tezcuco, who is
named Fernando; but he does so in a manner which indicates that
the conversion was exceptional.[1012] His baptism took place
probably on the same day as that of young Maxixcatzin and old
Xicotencatl, the occasion being celebrated with banquets and
dances, with illumination, sports, and exchange of presents, the
Spaniards adding horse-races and other interesting proceedings for
the gratification of the natives.

FOOTNOTES
[959] ‘Con este ... vino vn Francisco Lopez, vezino, y Regidor que fue de
Guatimala.’ Bernal Diaz, Hist. Verdad., 113. Vetancurt assumes that Pedro del
Castillo—Diaz calls him ‘el Almirante Pedro Cauallero’—secured Barba and his
vessel. Teatro Mex., pt. iii. 148; Cortés, Residencia, ii. 165.
[960] ‘El capitã Diego de Camargo,’ says Herrera; but Bernal Diaz explains that
this man stepped into the captaincy on the murder of ‘fulano Alvarez Pinedo,’ at
Pánuco. ‘Dixeron, que el Capitan Camargo auia sido Fraile Dominico, e que auia
hecho profession.’ Hist. Verdad., 114.

[961] Seven leagues up, says Herrera.

[962] ‘Muerto diez y siete ó diez y ocho cristianos, y herido otros muchos.
Asimismo ... muerto siete caballos.’ Cortés, Cartas, 144. Bernal Diaz assumes
that the whole attacking force was killed and some vessels destroyed. ‘Dexaron
vna carauela,’ says Herrera.

[963] Herrera states that hunger caused the land expedition to abandon the
vessels some twenty leagues above Almería. The people from the wrecked
caravel were taken on board the last vessel. dec. ii. lib. x. cap. xviii. Cortés leaves
the impression that both vessels arrived at Villa Rica, perhaps because the one
was wrecked so near it. ‘Vn nauio ... y traia sobre sesenta soldados.’ Bernal Diaz,
Hist. Verdad., 114. This may include the land party, but not the sailors.

[964] ‘Con hasta treinta hombres de mar y tierra.’ Cortés, Cartas, 154. ‘Sus
soldados, que eran mas de cincuenta, y mas siete cauallos,’ says Bernal Diaz,
Hist. Verdad., 114; and, since Cortés would be less apt to indicate large
accessions, he may be correct.

[965] ‘Este fue el mejor socorro.... Diaz de Auz sirvió muy bien a su Magestad en
todo lo que se ofreciò en las guerras, ... traxo pleyto despues, sobre el pleyto de
la mitad de Mestitan, ... conque le den la parte de lo que rentare el pueblo mas de
dos mil y quinientos pesos.’ Bernal Diaz, Hist. Verdad., 114-15. He was excluded
from the town itself, owing to cruel treatment of Indians.

[966] ‘El señor de aquel rio y tierra, que se dice Pánuco, se habia dado por vasallo
de V. M., en cuyo reconocimiento me habia enviado á la ciudad de Tenuxtitan, con
sus mensajeros, ciertas cosas.’ Cortés, Cartas, 144-5. But this is probably a mere
assertion, since the Spanish expeditions had never been higher than Almería, and
the cacique could have had no inducement for submitting.

[967] Bernal Diaz refers to the last accession from Garay’s expeditions as 40
soldiers and 10 horses, under an old man named Ramirez. Protected by heavy
cotton armor they were nicknamed the ‘albardillas.’ Hist. Verdad., 115.

[968] ‘Si todos ó algunos dellos se quisiesen volver en los navíos que allí estaban,
que les diese licencia.’ Cortés, Cartas, 163.
[969] Oviedo, iii. 335; and so Herrera also intimates in reference to Camargo’s
only remaining vessel, ‘la qual se anegò tãbien dẽtro de 10. dias en el puerto.’
dec. ii. lib. x. cap. xviii.

[970] The last two vessels bring 150 men and 16 horses, probably over 20, to
which must be added Camargo’s force, amounting no doubt to 50 effective men,
for Bernal Diaz admits 60 soldiers, not counting sailors; and Herrera intimates that
over 100 men must have reached Villa Rica of the total force on board Camargo’s
three vessels. Bernal Diaz’ estimates for the five vessels which he enumerates
exceed 170 soldiers and 20 horses; on fol. 115 he contradicts several points,
including the total, to which the sailors may be added, while a small reduction is to
be made for deaths among Camargo’s men. Vetancurt follows Bernal Diaz, and so
does Prescott, who assumes that full 150 men and 20 horses must have been
obtained. Mex., ii. 438. Robertson raises this nearer to the truth by saying 180
men, Hist. Am., ii. 104, as does Brasseur de Bourbourg, who nevertheless, on an
earlier page, adds Sahagun’s fanciful reinforcement of 300 men. Hist. Nat. Civ., iv.
371, 387. While the Spaniards were curing themselves, ‘llegó á Tlaxcala un
Francisco Hernandez, español, con 300 soldados castellanos y con muchos
caballos y armas.’ Sahagun, Hist. Conq., i. 37. The later edition does not give the
number. Gomara merely states that numerous small parties came over from the
Antilles, attracted by Cortés’ fame, through Aillon’s reports, he seems to say. Many
of them were murdered on the way, but sufficient numbers reached him to restore
the army and encourage the prosecution of the conquest. Hist. Mex., 173.

[971] Said to have been named Francisco Eguia. Sahagun, Hist. Conq., i. 39, 66,
and Chimalpain, Hist. Conq., i. 278. Herrera writes that many assumed the malady
to have been one of the periodical scourges that used to fall on the country. ‘Y el
no auer tocado a los Castellanos, parece que trae aparencia de razon.’ dec. ii. lib.
x. cap. iv. But it appears to have been wholly a new disease to the natives.

[972] ‘En el mes que llamaban Tepeilhuitl que es al fin de setiembre,’ as Sahagun
assumes. Hist. Conq., i. 39.

[973] Motolinia, Hist. Ind., in Icazbalceta, Col. Doc., i. 14-15; Sahagun, Hist.
Conq., i. 39, 66; Mendieta, Hist. Ecles., 514; Bernal Diaz, Hist. Verdad., 101; Id.
(Paris ed. 1837), iv. 460 (a chapter omitted in the original); Gomara, Hist. Mex.,
148; Chimalpain, Hist. Conq., i. 279; Torquemada, i. 489; Tezcoco en los ultimos
tiempos, 273.

[974] ‘Vivió despues de su elecçion solos sessenta dias.’ Cano, in Oviedo, iii. 549.
The election having taken place twenty days after Montezuma’s death, according
to Ixtlilxochitl, who assumes that he ruled only 40 or 47 days. Hist. Chich., 304; Id.,
Relaciones, 413. Others extend the rule to 80 days, both as leader and king,
perhaps, which would agree with Cano’s version.
[975] Such characteristics may be seen in Spanish as well as native records; yet
Solis writes, ‘su tibieza y falta de aplicacion dexáse poco menos que borrada
entre los suyos la memoria de su nombre.’ Hist. Mex., 372. Sufficient proof of his
energy is found in the siege resulting in the expulsion from Mexico.

[976] The native authorities incline to Quauhtemoc, but the Spanish generally add
the ‘tzin,’ the ‘c’ being elided, and the ‘Q’ changed to ‘G,’ making the name
Guatemotzin. ‘Quauhtemoc, que significa Aguila que baja.’ Vetancvrt, Teatro Mex.,
pt. iii. 51.

[977] Bernal Diaz describes him about a year later as 23 or 24 years old, while on
another occasion he alludes to him as 25. Hist. Verdad., 112, 155. Ixtlilxochitl
makes him 18. Hist. Chich., 304.

[978] ‘Por muerte de su Padre gobernaba el Tlatelulco.’ Duran, Hist. Ind., MS., ii.
479. ‘Sobrino de Monteçuma, que era papa ó saçerdote mayor entre los indios.’
Cano, in Oviedo, iii. 549; Peter Martyr, dec. v. cap. vi. ‘Cuauhtemotctzin hijo del
rey Ahuitzotzin y de la heredera de el Tlatelulco.’ Ixtlilxochitl, Relaciones, 413.
This incorrect view is adopted by Brasseur de Bourbourg and many others.

[979] ‘Moglie già del suo Zio Cuitlahuatzin,’ is the supposition of Clavigero, Storia
Mess., iii. 160. ‘Se hizo temer de tal manera, que todos los suyos temblauan dél.’
Bernal Diaz, Hist. Verdad., 112. For fanciful portraits of these last two emperors,
see Frost’s Pict. Hist. Mex., 104, 114.

[980] Ixtlilxochitl, loc. cit.; Torquemada, i. 570.

[981] ‘Al que solo fue causa q̄ los Christianos se conseruassen en aquella tierra.’
Herrera, dec. ii. lib. x. cap. xix.

[982] Bernal Diaz, Hist. Verdad., 118; Herrera, ubi sup.

[983] During the absence of the troops, says Herrera, a part of the Tepeacans had
formed a plot to surprise them when divided; but some women informed Marina in
time to prevent trouble. Cortés inflicted on them severe chastisement. dec. ii. lib. x.
cap. xvi. xviii.

[984] The reports and other papers by Cortés, written during a period of nearly
three decades in connection with New Spain, are both numerous and lengthy, but
only the five letters relating to the actual conquest of Mexico and Central America
have achieved bibliographic celebrity, under the title of Cortés’ Letters or
Relations. Although the first letter has been lost, and the companion letter long
missing, yet an allusion to the expedition against Mexico appeared as early as
1520 in Ein auszug ettlicher sendbrieff dem aller durchleüchtigisten
grossmechtigistẽ Fürsten ... von wegen einer new gefundẽ Inseln. Nürmberg
durch Fryderichen Peypus am. 17. tag Marcij MDXX., wherein the voyages of
Córdoba and Grijalva are also described. Harrisse, Bib. Am. Vet., 179, assumes
that the information is taken from Peter Martyr’s Decades. A later brief reference
to the city of Mexico itself is given in Translationuss hispanischer sprach zü
Frantzösisch gemacht so durch dẽ Vice Rey in Neapole fraw Margareten
Hertzogiñ iñ Burgundi zü geschrieben, published in 1522. On folio A. iii. is written:
Not far from the same island they have conquered a city called Tenustitan,
wherein 60,000 hearths have been counted, within a good wall. The letter of the
ayuntamiento was first published in Col. Doc. Inéd., i., 1842.
By the time of the receipt in Spain of Cortés’ second letter, of October 30,
1520, the general and his conquest had become so famous that his
communications were not likely to be lost sight of. The incidents treated of were
besides highly enticing, particularly the victories in Tlascala, the entry into
Montezuma’s wonderful island city, the disastrous expulsion, and the renewal of
the campaign, and Cromberger had it printed in 1522 under the title of Carta de
relaciõ ẽbiada a su. S. majestad del ẽpador nt̃o señor por el capitã general dela
nueua spaña: llamado fernãdo cortes, etc. Seuilla: por Jacobo crõberger aleman.
A viii. dias de Nouiẽbre. Año de M. d. y xxij. ‘Fué las Primicias de el Arte de la
Imprenta en Sevilla, y acaso de toda España,’ observes Lorenzana, in Cortes,
Hist. N. España, 171, but this is a great mistake, for printing had been done
already for several decades in Spain. An Italian abstract of the letter appeared
immediately after, as Noue de le Isole & Terra ferma Nouamente trouate In India
per el Capitaneo de larmata de la Cesarea Maiestate. Mediolani decimosexto
calẽ. Decembris M.D.XXII. A reprint of the Seville text was issued at Saragossa in
January, 1523. A later abridged account of the conquest is given in Ein schöne
Newe zeytung so Kayserlich Mayestet auss India yetz newlich zükommen seind,
ascribed to Sigmund Grimm of Augsburg, about 1522. Bibliotheca Grenvilliana
and Harrisse. Ternaux-Compans wrongly supposes the narrative to extend only to
1519, instead of 1522, and assumes the imprint to be Augsburg, 1520. Bibl.
Amér., 5. Perhaps 1523 is the more correct date, which may also be ascribed to
Tres sacree Imperiale et catholique mageste ... eust nouuelles des marches ysles
et terre ferme occeanes. Colophon, fol. 16. Depuis sont venues a sa mageste
nouuelles de certaīes ysles trouuez par les espagnolz plaines despecerie et
beaucoup de mines dor, lesquelles nouuelles il receupt en ceste ville de vailladolid
le primier doctobre xv. cent. xxij. This is a book noticed by no bibliographer except
Sabin, who believes that it contains only the second letter, although the holder
supposes the third letter to be also used. In 1524 appeared the first Latin version
of the second letter, by Savorgnanus, Praeclara Ferdinãdi Cortesii de Noua maris
Oceani Hyspania Narratio, Norimberga. M.D.XXIIII., which contains a copy of the
now lost map of the Gulf of Mexico, and also a plan of Mexico City. In the same
year two Italian translations of this version, by Liburnius, La Preclara Narratione,
were printed at Venice, one by Lexona, the other by Sabio, yet both at the
instance of Pederzani. The plan and map are often missing. Antonio, Bib. Hisp.
Nova, iii. 375, mentions only Lexona’s issue. A translation from Flavigny appeared
in the Portfolio, Philadelphia, 1817. The originals of the second and other letters
were, in the early part of the eighteenth century, ‘en la Libreria de Don Miguel
Nuñez de Rojas, del Consejo Real de las Ordenes,’ says Pinelo, Epitome, ii. 597.
Much of the vagueness which involves the narrative of events previous to the flight
from Mexico may be due to the loss of diary and documents during that episode.
The loss was convenient to Cortés, since it afforded an excuse for glossing over
many irregularities and misfortunes.
The third letter, dated Coyuhuacan, May 15, 1522, and relating the siege and
fall of Mexico, was first published at Seville, on Cromberger’s press, March 30,
1523, as Carta tercera de relaciõ: embiada por Fernãdo cortes capitan y justicia
mayor del yucatan llamado la nueua espana del mar oceano. It received a
reproduction in Latin by the same hand and at the same time as the second letter.
Both were reprinted, together with some missionary letters and Peter Martyr’s De
Insulis, in De Insvlis nuper Inventis Ferdinandi Cortesii. Coloniæ, M.D.XXXII. The
title-page displays a portrait of Charles V., and is bordered with his arms. Martyr’s
part, which tells rather briefly of Cortés, found frequent reprint, while the second
and third letters were republished, with other matter, in the Spanish Thesoro de
virtudes, 1543; in the German Ferdinandi Cortesii. Von dem Newen Hispanien.
Augspurg, 1550, wherein they are called first and second narratives, and divided
into chapters, with considerable liberty; in the Latin Novus Orbis of 1555 and 1616;
and in the Flemish Nieuwe Weerelt of 1563; while a French abridgment appeared
at Paris in 1532. The secret epistle accompanying the third letter was first printed
in Col. Doc. Inéd., i., and afterward by Kingsborough and Gayangos.
The fourth letter, on the progress of conquest after the fall of Mexico, dated at
Temixtitan (Mexico), October 15, 1524, was issued at Toledo, 1525, as La quarta
relacion, together with Alvarado’s and Godoy’s reports to Cortés. A second edition
followed at Valencia the year after. The secret letter accompanying it was not
published till 1865, when Icazbalceta, the well known Mexican collector,
reproduced it in separate black-letter form, and in his Col. Doc., i. 470-83.
The substance of the above three relations has been given in a vast number
of collections and histories, while in only a limited number have they been
reproduced in a full or abridged form, the first reproduction being in the third
volume of Ramusio Viaggi, of 1556, 1565, and 1606, which contains several other
pieces on the conquest, all supplied with appropriate headings and marginals.
Barcia next published them direct from the manuscript, in the Historiadores
Primitivos, i. This collection bears the imprint Madrid, 1749, but the letters had
already been printed in 1731, as Pinelo affirms, Epitome, ii. 597. Barcia died a few
years before his set was issued. From this source Archbishop Lorenzana took the
version published by him under the title of Historia de Nueva-España, Mexico,
1770, which is not free from omissions and faults, though provided with valuable
notes on localities and customs, and supplemented with illustrated pieces on
routes and native institutions, a map of New Spain by Alzate, an article on the
Gobierno Politico by Vetancurt, a copy of a native tribute-roll from picture records,
not very accurately explained, and the first map of Lower California and adjoining
coast, by Castillo, in 1541. This version of the letters was reproduced in New York,
1828, with a not wholly successful attempt by Del Mar to introduce modern
spelling. The work is also marked by a number of omissions and blunders, and the
introductory biographic sketch by Robert Sands adds little to its value. An
abridgment from Lorenzana appeared as Correspondance de Fernand Cortés, par
le Vicomte de Flavigny, Paris, 1778, which obtained three reprints during the
following year at different places. A great many liberties are taken with facts, as
may be imagined; and the letters are, beside, misnamed first, second, and third.
From the same source, or perhaps from Flavigny, of whom they savor, are Briefe
des Ferdinand Cortes, Heidelberg, 1779, with several reproductions, and with
notes; and the corrected Brieven van Ferdinand Cortes, Amsterdam, 1780-1. The
first edition in English, from Lorenzana, was issued by Folsom, as Despatches of
Hernando Cortes, New York, 1843, also with notes.
The fifth letter of the conqueror, on the famous expedition to Honduras, dated
at Temixtitan, September 3, 1526, lay hidden in the Vienna Imperial Library till
Robertson’s search for the first letter brought it to light. Hist. Am., i. xi. He made
use of it, but the first complete copy was not published till of late, in Col. Doc.
Inéd., iv. 8-167, reprinted at New York, 1848, and, in translation, in the Hakluyt
Society collection, London, 1868. It bore no date, but the copy found at Madrid has
that of September 3, 1526, and the companion letter printed in Col. Doc. Inéd., i.
14-23, that of September 11th. This, as well as the preceding letters, was issued
by Vedia, in Ribadeneyra’s Biblioteca de Autores Españoles, xxii.; the first three
letters being taken from Barcia, and the fifth from its MS. The letter of the
ayuntamiento is given and a bibliographic notice of little value. A very similar
collection is to be found in the Biblioteca Historica de la Iberia, i. But the most
complete reproduction of the principal writings by Cortés, and connected with him,
is in the Cartas y Relaciones de Hernan Cortés, Paris, 1866, by Gayangos, which
contains 26 pieces, beside the relations, chiefly letters and memorials to the
sovereign, a third of which are here printed for the first time. Although a few of
Lorenzana’s blunders find correction, others are committed, and the notes of the
archbishop are adopted without credit, and without the necessary amendment of
date, etc., which often makes them absurd. The earliest combined production of
Cortés’ relations, and many of his other writings, may be credited to Peter Martyr,
who in his Decades gave the substance of all that they relate, although he also
mingled other versions. Oviedo, in the third volume of his Hist. Gen., gives two
versions of the conquest, the first, p. 258 et seq., almost a reproduction of Cortés’
letters, and the other, p. 506 et seq., from different sources.
Beside the relations, there are a number of miscellaneous letters, petitions,
orders, instructions, and regulations, by Cortés, largely published in Navarrete,
Col. de Viages; Col. Doc. Inéd.; Pacheco and Cárdenas, Col. Doc.; Icazbalceta,
Col. Doc.; Kingsborough’s Mex. Antiq.; Alaman, Disert., and as appendices to
histories of Mexico. A special collection is the Escritos Sueltos de Hernan Cortés,
Mex., 1871, forming vol. xii. of the Bib. Hist. de la Iberia, which presents 43
miscellaneous documents from various printed sources, instructions, memorials,
and brief letters, nearly all of which are filled with complaints against ruling men in
Mexico.
Cortés’ letters have not inaptly been compared by Prescott to the
Commentaries of Cæsar, for both men were military commanders of the highest
order, who spoke and wrote like soldiers; but their relative positions with regard to
the superior authorities of their states were different, and so were their race
feelings, and their times, and these features are stamped upon their writings.
Cortés was not the powerful consul, the commander of legions, but the leader of a
horde of adventurers, and an aspirant for favor, who made his narrative an
advocate. The simplicity and energy of the style lend an air of truth to the
statements, and Helps, among others, is so impressed thereby as to declare that
Cortés ‘would as soon have thought of committing a small theft as of uttering a
falsehood in a despatch addressed to his sovereign.’ Cortés, ii. 211. But it requires
little study of the reports to discover that they are full of calculated misstatements,
both direct and negative, made whenever he considered it best for his interest to
conceal disagreeable and discreditable facts, or to magnify the danger and the
deed. They are also stamped with the religious zeal and superstition of the age,
the naïve expressions of reliance on God being even more frequent than the
measured declarations of devotedness to the king; while in between are calmly
related the most cold-blooded outrages on behalf of both. There is no apparent
effort to attract attention to himself; there is even at times displayed a modesty
most refreshing in the narrative of his own achievements, by which writers have as
a rule been quite entranced; but this savors of calculation, for the general tone is
in support of the ego, and this often to the exclusion of deserving officers. Indeed,
generous allusions to the character or deeds of others are not frequent, or they
are merged in the non-committing term of ‘one of my captains.’ Pedro de Alvarado
complains of this in one of his Relaciones, in Barcia, Hist. Prim., i. 165-6. In truth,
the calculating egotism of the diplomate mingles freely with the frankness of the
soldier. Cortés, however, is ever mindful of his character as an hidalgo, for he
never stoops to meanness, and even in speaking of his enemies he does not
resort to the invectives or sharp insinuations which they so freely scatter. His style
bears evidence of training in rhetoric and Latin, yet the parade of the latter is not
so frequent as might be expected from the half-bred student and zealot. Equally