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 15e

Managerial Economics

Mark Hirschey
University of Kansas

Eric Bentzen
Copenhagen Business School

Carsten Scheibye
Copenhagen Business School

Australia Brazil Mexico Singapore United Kingdom United States

● ● ● ● ●
 Managerial Economics, Fifteenth © 2019, Cengage Learning EMEA
Edition WCN: 02-300
Mark Hirschey, Eric Bentzen
and Carsten Scheibye ALL RIGHTS RESERVED. No part of this work covered by the
copyright herein may be reproduced or distributed in any form
Publisher: Annabel Ainscow or by any means, except as permitted by U.S. copyright law,
without the prior written permission of the copyright owner.
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ISBN 13: 978-1-4737-5835-3

Cengage Learning, EMEA

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Printed in China by RR Donnelly

Print Number: 01   Print Year: 2019
 Dedication

To Christine
(Mark Hirschey)

To Birgitte
(Eric Bentzen)

To Susanne
(Carsten Scheibye)
 Brief Contents

Preface xii
Part 1: Overview of Managerial Economics 1
1. Nature and Scope of Managerial Economics 3
2. Economic Optimization 25
3. Demand and Supply 81

Part 2: Demand Analysis and Estimation 111

4. Demand Analysis 113
5. Demand Estimation 161
6. Forecasting 197

Part 3: Production and Competitive Markets 239

7. Production Analysis 241
8. Cost Analysis and Estimation 289
9. Linear Programming 329
10. Competitive Markets 369
11. Performance and Strategy in Competitive Markets 403

Part 4: Imperfect Competition 445

12. Monopoly and Monopsony 447
13. Monopolistic Competition and Oligopoly 487
14. Game Theory and Competitive Strategy 529
15. Pricing Practices 565

Part 5: Long-Term Investment Decisions 609

16. Risk Analysis 611
17. Capital Budgeting 649
18. Organization Structure and Corporate Governance 685
19. Government in the Market Economy 719
Appendix A: Compounding and the Time Value of Money 757
Appendix B: Interest Factor Tables 773
Appendix C: Statistical Tables 781
Index 787

iv
 Contents

Part 1: Overview of Managerial Economics 1

Chapter 1: Nature and Scope of Managerial Summary 45
Economics 3 Questions 46
How is Managerial Economics Useful? 3
Self-Test Problems and Solutions 47
Managerial Application 1.1 Business Ethics 5
Problems 52
Theory of the Firm 7
Case Study: Spreadsheet Analysis of the
Profit Measurement 11 EOQ at the Neighborhood Pharmacy, Inc. 56
Managerial Application 1.2 The World is Selected References 57
Turning to Capitalism and Democracy 13
Appendix 2A: Maths Analysis for Managers 58
Why do Profits Vary Among Firms? 14
Properties of Real Numbers 58
Managerial Application 1.3 Google on Social
Responsibility 15 Equations 60

Role of Business in Society 16 Concept of a Marginal 63

Managerial Application 1.4 The IKEA way 18 Rules for Differentiating a Function 65
Structure of this Text 18 Appendix 2B: Multivariate Optimization
and the Lagrangian Technique 72
Summary 20
Partial Derivative Concept 72
Questions 20
Maximizing Multivariate Functions 73
Case Study: Is Coca-Cola the ‘Perfect’ Business? 21
Constrained Optimization 74
Selected References 24
Problem 80
Chapter 2: Economic Optimization 25
Chapter 3: Demand and Supply 81
Economic Optimization Process 25
Basis for Demand 81
Revenue Relations 27
Managerial Application 3.1 Energy
Managerial Application 2.1 Ethical Aspects Consumption in the World 83
of Corporate Governance 28
Market Demand Function 83
Managerial Application 2.2 Do Firms
Really Optimize? 33 Demand Curve 85

Cost Relations 34 Basis for Supply 88

Profit Relations 38 Market Supply Function 89

Incremental Concept in Economic Analysis 42 Supply Curve 91

Managerial Application 2.3 Behavioural Market Equilibrium 94

Economics 43 Summary 100

v
vi Contents

Questions 101 Case Study: Spreadsheet Analysis of Demand

Self-Test Problems and Solutions 101 and Supply for Sunbest Orange Juice 108

Problems 104 Selected References 110

Part 2: Demand Analysis and Estimation 111

Chapter 4: Demand Analysis 113 Managerial Application 5.2 Market Experiments

Consumer Decision-Making 113 on the Web 172
Measures of Regression Model Significance 177
Managerial Application 4.1 Odd-Number
Pricing Riddle 119 Judging Variable Significance 182

Indifference Curves 119 Summary 184

Questions 185
Budget Constraints 121
Self-Test Problems and Solutions 185
Individual Demand 125
Problems 190
Optimal Consumption 131
Managerial Application 4.2 Relationship Case Study: Demand Estimation
Marketing 132 for Mrs. Smyth’s Pies 194

Demand Sensitivity Analysis: Elasticity 135 Selected Reference 196

Price Elasticity of Demand 136 Chapter 6: Forecasting 197
Price Elasticity and Marginal Revenue 140 Forecasting Applications 197
Managerial Application 4.3 Haggling Managerial Application 6.1 Economic
in the Car Business 144 Forecasting: The Art and the Science 199
Price Elasticity and Optimal Pricing Policy 144 Qualitative Analysis 200
Cross-Price Elasticity of Demand 146 Trend Analysis and Projection 201
Income Elasticity of Demand 147 Managerial Application 6.2 Crypto Predictions 206
Managerial Application 4.4 What’s in a Name? 149 Business Cycle 206
Summary 149 Managerial Application 6.3 The Stock Market
Questions 150 and the Business Cycle 213
Self-Test Problems and Solutions 151 Exponential Smoothing 214
Problems 156 Econometric Forecasting 217
Case Study: Optimal Level of Advertising 159 Managerial Application 6.4 How Good is Your
Forecasting Ability? 218
Selected References 160
Judging Forecast Reliability 221
Chapter 5: Demand Estimation 161 Choosing the Best Forecast Technique 223
Interview and Experimental Methods 161 Summary 225
Simple Demand Curve Estimation 162 Questions 226
Managerial Application 5.1 Sampling Self-Test Problems and Solutions 227
Technology for TV Advertising 163
Problems 231
Simple Market Demand Curve Estimation 165
Case Study: Forecasting Global Performance
Identification Problem 168 for a Mickey Mouse Organization 235
Regression Analysis 172 Selected Reference 238
Contents vii

Part 3: Production and Competitive Markets 239

Chapter 7: Production Analysis 241 Managerial Application 8.2 GAAP and IRFS 296
Factors of Production 241 Managerial Application 8.3 Cost Stickiness 300
The Short Run 242 Minimum Efficient Scale 301
The Long Run 242 Firm Size and Plant Size 302
Production Functions 242 Learning Curves 308
Input–Output Analysis 242 Managerial Application 8.4 Bigger Isn’t
Total, Marginal, and Average Product 244 Always Better 308
Law of Marginal Returns to a Factor 251 Economies of Scope 311
Law of Diminishing Returns to a Factor 251 Cost–Volume–Profit Analysis 312
Managerial Application 7.1 Efficiency Wages 252 Summary 317
Input Combination Choice 255 Questions 318
Marginal Revenue Product and Optimal Self-Test Problems and Solutions 318
Employment 259 Problems 321
Managerial Application 7.2 National Minimum Case Study: Estimating Hospitalization Costs
Wages in the EU 260 for Regional Hospitals 324
Optimal Combination of Multiple Inputs 262 Selected References 327
Optimal Levels of Multiple Inputs 266
Chapter 9: Linear Programming 329
Returns to Scale 267
Basic Assumptions 329
Productivity Measurement 269
Managerial Application 9.1 Karmarkar’s
Managerial Application 7.3 Labour Productivity
LP Breakthrough 330
Growth in Selected Countries 2009–2016 270
Managerial Application 9.2 LP: More than
Summary 271
a Visual Approach 331
Questions 272
Production Planning for Multiple Products 331
Self-Test Problems and Solutions 273
Graphic Specification and Solution 333
Problems 276
Algebraic Specification and Solution 338
Case Study: Worker Productivity Among Giant
US Corporations 280 Managerial Application 9.3 LP on the PC! 342

Selected References 283 Dual in Linear Programming 342

Appendix 7A: A Constrained Optimization Dual Specification 343

Approach to Developing the Optimal Input Solving the Dual Problem 345
Combination Relationships 284 Summary 348
Constrained Production Maximization 284 Questions 349
Constrained Cost Minimization 286
Self-Test Problems and Solutions 349
Problem 287
Problems 357
Chapter 8: Cost Analysis and Estimation 289 Case Study: An LP Pension Funding Model 362
Economic and Accounting Costs 289 Appendix 9A: Rules for Forming the Dual Linear
Role of Time in Cost Analysis 291 Programming Problem 365
Managerial Application 8.1 GE’s ‘20-70-10’ Plan 292 Primal Problem 365
Short-Run Cost Curves 293 Dual Problem 366
Long-Run Cost Curves 296 Selected References 367
viii Contents

Chapter 10: Competitive Markets 369 Competitive Market Efficiency 403

Competitive Environment 369 Managerial Application 11.1 The Walmart
Factors that Shape the Competitive Phenomenon 407
Environment 370 Market Failure 408
Managerial Application 10.1 International Trade Role for Government 410
Benefits the Rich More Than the Poor 371 Subsidy and Tax Policy 411
Competitive Market Characteristics 373 Managerial Application 11.2 Corn Growers
Managerial Application 10.2 Is the Stock Market Discover Oil! 411
Perfectly Competitive? 374 Tax Incidence and Burden 414
Profit Maximization in Competitive Markets 375 Managerial Application 11.3 Measuring
Marginal Cost and Firm Supply 379 Economic Profits 418
Competitive Market Supply Curve 382 Price Controls 418
Managerial Application 10.3 Dot.com 383 Business Profit Rates 421
Competitive Market Equilibrium 386 Market Structure and Profit Rates 424
Summary 388 Competitive Market Strategy 426
Questions 389 Long-Run Firm Performance 427
Self-Test Problems and Solutions 390 Summary 427
Problems 395 Questions 429
Case Study: Profitability Effects of Firm Size Self-Test Problems and Solutions 430
for DJIA Companies 399 Problems 436
Selected References 401 Case Study: The Most Profitable S&P 500
Companies 441
Chapter 11: Performance and Strategy
in Competitive Markets 403 Selected References 444

Part 4: Imperfect Competition 445

Chapter 12: Monopoly and Monopsony 447 Questions 471
Monopoly Market Characteristics 447 Self-Test Problems and Solutions 471
Managerial Application 12.1 Commission Fines Problems 478
Eight Producers of Capacitors €254 Million for Case Study: Effect of R&D on Tobin’s q 483
Participating in Cartel 449 Selected References 485
Profit Maximization Under Monopoly 450
Chapter 13: Monopolistic Competition
Social Costs of Monopoly 453 and Oligopoly 487
Social Benefits of Monopoly 457 Contrast Between Monopolistic Competition
Monopoly Regulation 459 and Oligopoly 487
Managerial Application 12.2 Is Ticketmaster Monopolistic Competition 489
a Monopoly? 461 Managerial Application 13.1 Dell’s Price
Monopsony 464 War with Dell 490
Antitrust Policy 468 Monopolistic Competition Process 493
Managerial Application 12.3 Is This Why Managerial Application 13.2 Intel: Running
They Call it ‘Hardball’? 468 Fast to Stay in Place 493
Competitive Strategy in Monopoly Markets 469 Oligopoly 497
Summary 470 Cartels and Collusion 498
Contents ix

Oligopoly Output-Setting Models 499 Self-Test Problems and Solutions 554

Oligopoly Price-Setting Models 504 Problems 557
Census Measures of Market Concentration 511 Case Study: Time Warner, Inc. is Playing Games
Managerial Application 13.3 Horizontal Merger with Stockholders 561
Guidelines 513 Selected References 563
Summary 514
Chapter 15: Pricing Practices 565
Questions 515
Pricing Rules and Analysis 566
Self-Test Problems and Solutions 516
Problem 520 Mark-Up Pricing and Profit Maximization 567

Case Study: Market Structure Analysis Managerial Application 15.1 Mark-Up Pricing
at Columbia Drugstores, Inc. 525 Technology 568

Selected References 527 Price Discrimination 571

Price Discrimination Example 573
Chapter 14: Game Theory and
Competitive Strategy 529 Managerial Application 15.2 Do Colleges
Price Discriminate? 573
Game Theory Basics 529
Two-Part Pricing 577
Managerial Application 14.1 Asymmetric
Multiple-Product Pricing 580
Information 531
Joint Products 582
Prisoner’s Dilemma 532
Joint Product Pricing Example 584
Nash Equilibrium 535
Managerial Application 15.3 10 cents
Infinitely Repeated Games 537 for a Gallon of Gas in Dayton, Ohio 585
Managerial Application 14.2 The Market Managerial Application 15.4 Why Some
for Lemons 538 Price Wars Never End 589
Finitely Repeated Games 539 Summary 589
Game Theory and Auction Strategy 541 Questions and Answers 590
Managerial Application 14.3 Wrigley’s Success Self-Test Problems and Solutions 591
Formula 542 Problems 593
Competitive Strategy 543 Case Study: Pricing Practices in the Denver,
Pricing Strategies 545 Colorado, Newspaper Market 597
Managerial Application 14.4 Network Selected References 599
Switching Costs 547 Appendix 15A: Transfer Pricing 600
Nonprice Competition 548 Transfer Pricing Problem 600
Summary 552 Global Transfer Pricing Example 602
Questions 553 Problem 606

Part 5: Long-Term Investment Decisions 609

Chapter 16: Risk Analysis 611 Managerial Application 16.2 Why are
Lotteries Popular? 621
Concepts of Risk and Uncertainty 611
Adjusting the Valuation Model for Risk 623
Probability Concepts 613
Managerial Application 16.3 Stock Option
Managerial Application 16.1 Behavioural Finance 613 Backdating Scandal 624
Standard Normal Concept 619 Decision Trees and Computer Simulation 628
Utility Theory and Risk Analysis 621 Managerial Application 16.4 Internet Fraud 633
x Contents

Summary 634 Managerial Application 18.3 Institutional

Questions 635 Investors are Corporate Activists 703

Self-Test Problems and Solutions 636 Agreements and Alliances Among Firms 703

Problems 639 Legal and Ethical Environment 705

Case Study: Stock-Price Beta Estimation for Managerial Application 18.4 Sarbanes–Oxley 706
Google, Inc. 644 Summary 707
Selected References 647 Questions 709
Self-Test Problems and Solutions 709
Chapter 17: Capital Budgeting 649
Problems 711
Capital Budgeting Process 649
Case Study: Do Boards of Directors Make
Steps in Capital Budgeting 650 Good Corporate Watchdogs? 714
Managerial Application 17.1 Market-Based Selected References 717
Capital Budgeting 652
Cash Flow Estimation Example 652 Chapter 19: Government in the Market
Capital Budgeting Decision Rules 655 Economy 719
Project Selection 660 Externalities 719
Managerial Application 17.2 Is the Sun Managerial Application 19.1 ‘Tobacco’ Ethics 722
Setting on Japan’s Vaunted MOF? 661 Solving Externalities 722
Cost of Capital 665 Public Goods 724
Managerial Application 17.3 Federal Government
Managerial Application 19.2 Political Corruption 727
Support for R&D 666
Optimal Allocation of Social Resources 727
Managerial Application 17.4 Capital Allocation
at Berkshire Hathaway, Inc. 670 Benefit–Cost Methodology 730
Optimal Capital Budget 671 Benefit–Cost Criteria 732
Summary 673 Additional Methods of Improving Public
Questions 674 Management 736
Self-Test Problems and Solutions 675 Regulatory Reform in the New Millennium 738
Problems 678 Health Care Reform 740
Selected References 683 Managerial Application 19.3 Price Controls
for Pharmaceutical Drugs 741
Chapter 18: Organization Structure Summary 743
and Corporate Governance 685
Questions 744
Organization Structure 685
Self-Test Problems and Solutions 745
Transaction Cost Theory of the Firm 687
Problems 751
The Firm’s Agency Problem 688
Selected References 755
Managerial Application 18.1 Organization
Design at GE 689
Appendix A: Compounding and the
Organization Design 692 Time Value of Money 757
Decision Management and Control 694
Corporate Governance 696 Appendix B: Interest Factor Tables 773
Managerial Application 18.2 Company
Information on the Internet 698 Appendix C: Statistical Tables 781
Ownership Structure as a Corporate
Governance Mechanism 699 Index 787
Contents
About the Authors

Eric Bentzen (Copenhagen Business School) is Associate Professor at Copenhagen Business

School, where he teaches undergraduate and graduate courses in Managerial Economics and
Business Analytics. He is a member of several professional organizations. He has published
in Applied Financial Economics, European Journal of Finance, Management Decision, Financial
Markets and Portfolio Management, and other leading academic journals.

Carsten Scheibye (Copenhagen Business School) is Assistant Professor at Copenhagen

Business School, where he teaches undergraduate courses in Managerial Economics.
He has significant experience in course coordination and management as well as within
didactical and pedagogical development of the learning environment surrounding the field
of Managerial Economics. In addition, he has received educational prizes for his teaching
abilities. Among these are the Education Prize from the Danish Society of Business and
Education.

The late Mark Hirschey (University of Wisconsin-Madison) was the Anderson W. Chandler
Professor of Business at the University of Kansas, where he was teaching undergraduate and
graduate courses in managerial economics and finance. Professor Hirschey was president of
the Association of Financial Economists and a member of several professional organizations.
He has published articles in the American Economic Review, Review of Economics and Statistics,
Journal of Business, Journal of Business and Economic Statistics, Journal of Finance, Journal of
Financial Economics, Journal of Industrial Economics, and other leading academic journals. He
was editor of Advances in Financial Economics, and past editor of Managerial and Decision
Economics.

xi
 Preface

Economic concepts show how to apply common sense to understand business and solve
managerial problems. Economic intuition is really useful. It helps managers decide on which
products to produce, costs to consider, and prices to charge. It also helps them decide on the
best hiring policy and the most effective style of organization. Students and future managers
need to learn these things. The topics covered in managerial economics are powerful tools
that can be used to make managers more effective and their careers more satisfying. By
studying managerial economics, those seeking to further their business careers learn how to
more effectively collect, organize and analyze information.
A key feature of this book is its depiction of the firm as a cohesive organization. Effective
management involves an integration of the accounting, finance, marketing, personnel, and
production functions. This integrative approach demonstrates that important managerial
decisions are interdisciplinary in the truest sense of the word.
Although both microeconomic and macroeconomic relations have implications for
managerial decision-making, this book concentrates on microeconomic topics. Following
development of the economic model of the firm, the vital role of profits is examined. Because
economic decision-making often requires an elementary understanding of optimization
techniques and statistical relations, those basic concepts are described early in the text.
Because demand for a firm’s products plays a crucial role in determining its profitability and
ongoing success, demand analysis and estimation is an essential area of study. An important
part of this study is an investigation of the basic forces of demand and supply. This naturally
leads to discussion of economic forecasting and methods for assessing forecast reliability.
Production theory and cost analysis are then explored as means of understanding the
economics of resource allocation and employment.
Once the internal workings of a successful firm are understood, attention can turn
towards consideration of the firm’s external economic environment. Market structure analysis
provides the foundation for studying the external economic environment and for defining
an effective competitive strategy. The role of government in the market economy, including
the constraints it imposes on business, requires a careful examination of regulation and
antitrust law. Risk analysis and capital budgeting are also shown as methods for introducing
marginal analysis into the long-range strategic planning and control process. Finally, given
government’s increasing role in managing demand and supply for basic services, such as
education and healthcare, the use of economic principles to understand and improve public
management is also considered.
Managerial Economics, 15th Edition, takes a practical problem-solving approach. The focus
is on the economics—not the mathematics—of the managerial decision process. Quantitative
tools are sometimes employed, but the emphasis is on economic intuition.

xii
Preface xiii

THIS 15th EDITION

Students and instructors will find that Managerial Economics, 15th Edition, provides an
efficient calculus-based introduction and guide to the optimization process. Chapter 2,
‘Economic Optimization’, illustrates how the concept of a derivative can be used as a
practical tool to understand and apply marginal analysis. ‘Multivariate Optimization and
the Lagrangian Technique’, Appendix 2B, examines the optimization process for equations
with three or more variables. Such techniques are especially helpful when managers
face constrained optimization problems, or decision situations with limited alternatives.
Throughout the text, a wide variety of problems describing real-world decisions can be solved
using such techniques.
Managerial Economics, 15th Edition provides an intuitive guide to model building,
analysis and basic economic relations. Although differential calculus is an obviously helpful
tool for understanding the process of economic optimization, it is important that students
not let mathematical manipulation get in the way of their basic grasp of economic concepts.
Although those using a non-calculus-based approach can safely skip parts of Chapter 2
and Appendix 2B, all other material is fully and completely assessable. With practice using
a wide variety of problems and examples throughout the text, all students are able to gain a
simple, practical understanding of how economics can be used to understand and improve
managerial decisions.

Learning Aids
● Each chapter incorporates a wide variety of simple numerical examples and detailed
practical illustrations of chapter concepts. These features portray the valuable use and
real-world implications of covered material.
● Each chapter includes short Managerial Applications boxes to show current examples of
how the concepts introduced in managerial economics apply to real-world situations.
New Managerial Applications based on articles from the Internet or Barron’s, Business
Week, Forbes, Fortune, and The Wall Street Journal are provided. This feature stimulates
student interest and offers a popular basis for classroom discussion.
● The book incorporates several new regression-based illustrations of chapter concepts
using actual company data, or hypothetical data adapted from real-world situations. Like
all aspects of the text, this material is self-contained and intuitive.
● Effective managers must be sensitive to the special challenges posed by an increasingly
global marketplace. To increase student awareness of such issues, a number of examples,
Managerial Applications, and case studies that relate to global business topics are
featured.
● Selected chapters are accompanied by a case study that provides in-depth treatment
of chapter concepts. To meet the needs of all instructors and their students, these case
studies are written to allow, but do not require, a computer-based approach. These case
studies are fully self-contained and especially helpful to instructors who wish to more
fully incorporate the use of basic spreadsheet and statistical software in their courses.
● New end-of-chapter questions and problems are provided, after having been subject
to necessary revision and class testing. Questions are designed to give students the
opportunity to grasp basic concepts on an intuitive level and express their understanding
in a nonquantitative fashion. Problems cover a wide variety of decision situations and
illustrate the role of economic analysis from within a simple numerical framework.
xiv Preface

● Each chapter includes self-test problems with detailed solutions to show students how
economic tools and techniques can be used to solve practical business problems. These
self-test problems are a proven study aid that greatly enhances the learning value of end-
of-chapter questions and problems.

Companion Website
Managerial Economics, 15th Edition is supported by a Companion Website to help make
teaching and learning the material both easy and enjoyable.

Acknowledgments
We are indebted to staff at Cengage Learning for making the 15th edition a reality.
A number of people have aided in the preparation of Managerial Economics. Helpful
suggestions and constructive comments have been received from a great number of
instructors and students who have used previous editions. Numerous reviewers have also
provided insights and assistance in clarifying difficult material. Among those who have been
especially helpful in the development of previous editions are: Barry Keating, University of
Notre Dame; Stephen Conroy, University of San Diego; Xu Wang, Texas A&M University;
Michael Brandl, University of Texas, Austin; Neil Garston, California State University, Los
Angeles; Albert Okunade, University of Memphis; David Carr, University of South Dakota;
Steven Rock, Western Illinois University; Mel Borland, Western Kentucky University; Tom
Staley, San Francisco State University.
Many thanks to the reviewers of this edition, Gu Guowei of London South Bank
University, UK and Dr Tendeukayi Mugadza of Monash University, South Africa.
Every effort has been made to minimize errors in the book. However, errors do
occasionally slip through despite diligent efforts to provide an error-free package of text
and ancillary materials. Readers are invited to correspond with me directly concerning any
corrections or other suggestions.
It is obvious that economic efficiency is an essential ingredient in the successful
management of both business and public-sector organizations. Like any dynamic area of
study, the field of managerial economics continues to undergo profound change in response
to the challenges imposed by a rapidly evolving environment. It is exciting to participate
in these developments. I sincerely hope that Managerial Economics contributes to a better
understanding of the usefulness of economic theory.
Other documents randomly have
different content
 παραπλησιωτάτην· μετέβαλον ὦν ἐς τὸν λίνεον κιθῶνα, ἵνα δὴ
περόνῃσι μὴ χρεώνται. Ἔστι δὲ ἀληθεϊ λόγῳ χρεωμένοισι οὐκ
Ἰὰς αὕτη ἡ ἐσθὴς τὸ παλαιὸν, ἀλλὰ Κάειρα, ἐπεὶ ἥ γε Ἑλληνικὴ
ἐσθῆς πᾶσα ἡ ἀρχαίη τῶν γυναικῶν ἡ αὐτὴ ἦν τὴν νῦν Δωρίδα
καλεῦμεν.

“When he came back to Athens bringing word of the calamity, the

wives of those who had been sent out on the expedition took it
sorely to heart, that he alone should have survived the slaughter of
all the rest; they therefore crowded round the man and struck him
with the brooches by which their dresses were fastened, each, as
she struck, asking him where he had left her husband. And the man
died in this way. The Athenians thought the deed of the women
more horrible even than the fate of the troops. As, however, they did
not know how else to punish them, they changed their dress, and
compelled them to wear the costume of the Ionians. Till this time the
Athenian women had worn a Dorian dress, shaped nearly like that
which prevails at Corinth. Henceforth they were made to wear the
linen tunic, which does not require brooches.
“In very truth, however, this dress is not originally Ionian, but
Carian; for anciently the Greek women all wore the costume which is
now called the Dorian.”—Rawlinson.
He goes on to say that after this the Argive and Æginetan
women, out of rivalry with the Athenians, wore much larger brooches
than before.
The importance of the passage is that it tells us of the two types
of dress worn by Greek women. We learn that down to the early
years of the sixth century all the Greek women wore the Dorian
dress fastened with pins of such size and strength that they could
become dangerous weapons in the hands of women excited by grief
or passion. Later the Athenian women adopted a different dress,
which did not need these large pins to fasten it, and which
Herodotus calls the linen Ionic chiton, afterwards correcting himself
and explaining that this kind of dress was really Carian in its origin.
 The story of the slaying of the sole survivor of the Æginetan
expedition, and of the punishment meted out to the Athenian
women, seems in itself far-fetched and highly improbable; but there
is probably some foundation of truth in it. Possibly the tale was
invented by Herodotus, or, more probably, was current in his day as
an explanation of a change in the style of dress which actually took
place in Athens at the beginning of the sixth century, or more
probably even earlier. Among the sumptuary laws introduced by
Solon was one regulating women’s dress, and forbidding them to
wear more than three garments when they went out to funerals or
festivals.[80] The passing of such a law could only be necessary if the
Athenian women had already adopted a luxurious and extravagant
style of dress. Now, the essence of the Doric dress, as will be shown
later, is simplicity; it did not admit of great variety or elaboration. On
the other hand, that the Ionic dress was somewhat luxurious is clear
from Thucydides, i., 6; so we may infer that by the time of Solon’s
archonship, 594 B.C., the Athenian women had already adopted the
Ionic dress, and had perhaps elaborated it by some modifications
added by their own invention. If this is so, Herodotus’s story places
the change at least a generation later than its actual occurrence; but
as he is writing at a distance of more than a century from the event,
we need not be surprised if he is a generation or so out in his dating.
The simple Doric dress mentioned by Herodotus as being
universally worn by Greek women down to the sixth century, finds
abundant illustration in early art, especially in the Attic black-figured
vases. It consists of a large oblong piece of material, in length about
1 ft. more than the height of the wearer, in width about twice the
distance from elbow to elbow when the wearer’s arms are held out
horizontally at shoulder level. The additional foot in height is used up
by folding the upper edge over so that the material is double from
neck to waist. The garment is put on by folding it round the body
and pinning it on the shoulders at points a third of the distance from
the middle line and the edges respectively. A diagram will make the
arrangement clear.
 Fig. 9.

a, b, c, d represents the original rectangular piece of material, ab

being twice the wearers distance from elbow to elbow—that is to say,
about 5 ft. 9 in.—ac being 1 ft. more than the wearer’s height—
namely, about 6 ft. 6 in.
After the upper edge ab has been folded over to a width of about
1 ft., the dress is pinned on the shoulders at the points e e′ and f f′;
the part which covers the back is drawn slightly forward over the
front, so that there are four thicknesses of material where the pins
are inserted; the garment is then girded at the waist, the position of
which is indicated by the points g and h, and any superfluous length
is drawn up over the girdle.
The distance between the points a′ f, f e, e′ f′, etc., varies
slightly, but is always approximately one-sixth of the whole width of
the material. In practice, a better effect is produced if the width of
stuff e′ f′, which covers the back of the neck, is shorter than the
other sections.
The garment is usually represented as being sewn up along the
side, sometimes along the whole length ac, bd, sometimes only
along the length from the waist to the feet—that is, along the edges
gc, hd; sometimes it is left open, being held in place only by the
girdle. On the black-figured vases it is usually the closed Doric dress
which is represented, probably because it offered the least difficulty
to a technique which necessarily imposed somewhat close limitations
on the artists who practised it. A good example is to be found in the
figures of the Fates from the François vase, which has already been
quoted in illustration of the Homeric peplos.
 Photo. by The English Photographic Co.]
Fig. 10.—Metope from the Temple of Zeus, at Olympia.
[Face page 44.

A freer and more realistic representation is to be found in the

sculptured metopes from the temple of Zeus, at Olympia. Athena in
the metope representing the cleaning of the Augean stables wears
the closed Doric dress; here the ἀπόπτυγμα, or overfold, falls slightly
below the waist, and below it the kolpos is clearly visible, the slight
pouch formed by drawing the superfluous length of the material over
the girdle.[81] On the vases the pouch is almost invariably absent,
and the girdle is always visible. This is also the case in one of the
archaic statues on the Acropolis at Athens, where the Doric dress is
worn over an Ionic chiton. A slight variation of the dress is to be
seen on the nymph of the Atlas metope at Olympia, where the
overfold hangs considerably below the waist and no girdle or pouch
is visible; here the additional length of the overfold probably obviated
the necessity of a pouch, and the girdle, which is hidden, simply
served to hold the dress in to the figure. A bronze statuette from
Herculaneum shows the dress sewn up only from the waist
downwards (Fig. 11).
 Photo. by Brogi, Naples.]
Fig. 11.—Bronze Statue from Herculaneum, Naples.
[Face page 45.

As time went on, the dimensions of the Doric dress became more
ample, or at least were represented so in art; both pouch and
overfold become deeper and the folds of the garment generally grow
fuller; the distance of the shoulder pins from the points which hang
immediately under the arms becomes proportionately larger, no
longer being an exact sixth of the whole width of the dress. The
most perfect examples in art of the Doric dress in its full
development are to be found in the maidens of the Parthenon frieze
and the Caryatids of the Erechtheum. Here the pouch is emphasized,
and its graceful curve dipping over the hips, though idealized, is at
the same time perfectly naturalistic, as can be shown at once by
practical experiment.
The Munich copy of Cephisodotus’s Eirene holding the infant
Plutus presents a very good example of the closed Doric dress as it
was worn in the fourth century; it will be seen that the folds are
more ample, and the overfold and pouch fall to a distance
considerably below the waist, so that the garment must be larger
than that originally worn, if we are to accept early monuments as
faithful representations of the style of dress actually worn.
The simpler form of the Doric dress, namely, that which is
unsewn and left open down the side, is not found represented in art
before the fifth century; it becomes fairly common on red-figured
vases, where it is very frequently depicted ungirt.[82] Sometimes it is
the only garment worn; in other cases it is worn over an under-
dress. A sculptured example is to be found in an Artemis in Dresden,
[83] for the original of which Furtwängler claims Praxitelean
authorship. This was probably the dress worn by Laconian girls, to
whom the term φαινομηρίς, “showing the thigh,” was applied by
some ancient writers.[84]
 Fig. 12.—Vase-painting—British Museum.
[Face page 46.

A variety of this dress appears in art about the middle of the fifth
century; it is sometimes known as the “peplos of Athena,” because
Pheidias chose it as the style in which to drape his statue of the
Athena Parthenos. The word “peplos” is usually reserved for the
Doric dress whether open or closed, the word “chiton” for the Ionic,
though the latter is frequently applied to the Doric, and is invariably
used of the under-dress, when the two styles became confused. The
“peplos of Athena” is similar to the ordinary open Doric dress, except
that the overfold is longer and reaches to the thighs and the girdle is
worn over it.[85] The material is pulled up very slightly over the
girdle, but not sufficiently to hide it in front, the purpose of the slight
pouch being merely to prevent the dress from dragging under the
arms, and from trailing on the ground at the sides. The girdle is at
first worn round the waist, but later it is put on higher, until, on the
Athena from the frieze of the altar at Pergamon, it is worn
immediately under the breasts. The clearest representation in art is
to be found in the Varvakeion copy of the Athena Parthenos, and it
occurs also in many representations of Athena which were obviously
influenced by Pheidias. In the Dresden “Lemnia,”[86] the girdle is
passed not only over the overfold, but also round the ægis; in the
“torso Medici”[87] this overgirt peplos is worn over an under-dress of
the Ionic type. The date of the introduction of this style of wearing
the Doric dress is a point of some uncertainty. The question arises as
to whether it was invented by Pheidias or was already commonly
worn and adopted by him as being most appropriate for his great
representation of the maiden goddess. Certainly, in sculpture we
have no example of it before the time of Pheidias, unless we assign
an earlier date to the little relief of the “mourning Athena,” which
seems improbable; the Iris of the Parthenon frieze wears it; and
among slightly later works the Victory of Pæonius at Olympia is a
good example, though here the dress is slightly varied by being
fastened only on one shoulder. Further evidence is afforded by the
vases, but even these do not give any certain proof; the dress does
not appear before the middle of the fifth century, but after that date
it becomes fairly frequent, and is given not only to Athena but to
other divine or mythological personages, such as Persephone,[88]
Nike, Cassandra, and also to hand-maids attending on ladies in more
elaborate costume. In some of these vases the work is obviously
post-Pheidian, but many of them were probably made before the
completion of the Athena Parthenos, and the fact that the overgirt
dress is so frequently represented on slaves renders it likely that it
was a style of dress actually worn, and not merely the invention of
the great sculptor’s imagination; it was probably selected by him for
the Parthenos because of its extreme simplicity and the possibilities
of statuesque dignity which it contained.

Fig. 13.—Vase-painting in the Polygnotan Style—Louvre.

[Face page 47.

It has been mentioned incidentally that the Doric peplos is

sometimes found worn over another garment, but it is ordinarily the
only garment worn indoors, and for outdoor wear another is
sometimes put on over it. The overfold of the peplos could itself be
used as a veil by drawing the back part up over the head; it is so
used by a woman on a red-figured vase in the British Museum.[89]

Fig. 14.—Vase-painting by Hieron—British Museum.

[Face page 49.

The outer garment worn by women in classical times corresponds

to the Homeric κρήδεμνον and is called the ἱματίον, although this
term is applied by Herodotus to the Doric peplos. By derivation the
word simply means “a piece of clothing,” being connected with εἷμα
and ἕννυμι. It consisted of a large oblong piece of material about 7
or 8 feet in length, and in breadth about equal to the wearer’s
height. Considerable variety was possible in the arrangement of it. It
could be worn both as head covering and cloak, by placing the
middle of the upper edge over the head and letting the two sides fall
down over the shoulders like a shawl; it is often so depicted on the
vases both black- and red-figured; the figure of Eleusis wears it so
on the Triptolemus vase by Hieron in the British Museum.[90] It was
frequently worn over the shoulders in this fashion without covering
the head, and could easily be pushed back or drawn up over the
head at will. A second very common way of arranging the himation
was to draw one end over the left shoulder from the back towards
the front, so that it hung down in a point in front, then to pass the
mass of material across the back and under the right arm and throw
the other end over the left shoulder again, so that the second point
hung down towards the back: this was a very common style both for
men and women.[91] If additional warmth were required, it could
easily be obtained by drawing the cloak up over the right shoulder,
so as not to leave the right arm and chest exposed. A combination of
these two styles is seen in some of the Tanagra statuettes, where the
himation is put on over the head. Both shoulders are covered; but
instead of the two ends being allowed to hang down symmetrically
one on each side of the front, one is taken up and thrown over the
other shoulder, so that the whole figure is covered in the ample folds
of the cloak.[92]
 Fig. 15.—Terra-cotta Statuette—British Museum.
[Face page 49.

A rather exceptional variant of the second style of wearing the

himation is to be seen on a vase of Euxitheos in the British Museum,
[93] where Briseis is represented wearing it with one end placed on
the left shoulder, the mass of the cloak being drawn across the back;
the other end is passed under the right arm, but instead of being
thrown over the left shoulder again, is turned back over the right
shoulder, and so leaves the front of the figure exposed.
Fig. 16.—Vase-painting by Euxitheos—British
Museum.
[Face page 50.
 Fig. 17.—Vase-painting by Falerii—Rome, Villa Giulia.
[Furtwängler and Reichhold, Griechische
Vasenmalerei, 17 and 18.]
[Face page 50.

A third fashion is somewhat similar to the second, except that it

leaves the front of the figure exposed to the waist or a little below.
Instead of being drawn across the chest and thrown over the left
shoulder, the second end is simply thrown over the forearm and held
in place by the bend of the elbow.[94] A cloak worn in this style
would be very likely to slip, so another fashion was adopted, which
produced approximately the same effect, but which prevented the
possibility of slipping. Instead of throwing the end over the left arm,
the wearer secured it at the waist under the arm either by a brooch
or more probably by simply tucking it under the girdle. To prevent
the garment from hanging down too low and dragging on the
ground, a large corner was usually doubled over before it was
secured at the waist. The part thus fastened was sometimes passed
over the end which hung down from the left shoulder, sometimes
under it. The himation is so worn by Mausolus and Artemisia in their
portrait statues from the Mausoleum. A very good example is the
Athena of Velletri published by Furtwängler.[95]
 Photo. by A. Giraudon.]
Fig. 18.—Athena of Velletri.
[Face page 51.

On many of the monuments of the Pheidian period and the time

immediately preceding it, we find that the Doric peplos is worn alone
or with a small cloak or shawl laid on the shoulders and hanging
down the back, as in the case of the maidens carrying sacrificial
vessels on the Parthenon frieze. This small shawl was perhaps worn
more for ornament than for the sake of warmth, and an ample
peplos of warm woollen material might be found sufficient
protection.
It may be objected that in the majority of the examples chosen
as illustrations the himation is worn not over the Doric peplos, but
over the Ionic chiton, and it has indeed been sometimes regarded as
an element of the Ionic dress rather than of the Doric.
It does, however, appear over the Doric peplos, e.g., in Fig. 18
and on many black-figured Attic vases,[96] and it is not difficult to
trace its development from the Homeric κρήδεμνον worn
symmetrically over the head and shoulders. It is an easy step in
advance to throw one end of the cloak over the opposite shoulder,
push it back off the head, and bring one arm out free instead of
letting it remain covered. Fig. 15 might serve to illustrate an
intermediate stage between those represented in Figs. 14 and 17.
An attempt will be made later to show that the Ionic himation
was fastened with brooches, and had a different development. The
wearing of the unpinned himation over the Ionic chiton is an instance
of the blending of Doric and Ionic dress.
The Doric dress of men was similar to that of women, both with
regard to under-dress and cloak. The name χιτών is used for the
under-dress, as it was in Homer, the word peplos being restricted to
women’s garments. The outer garment of men as well as of women
is called the himation.
The Doric men’s chiton is fastened by brooches on the shoulders
and girt in at the waist. It was a short garment reaching midway
down the thighs, or to a distance just above the knees, had no
overfold, and was narrower than the women’s peplos. No kolpos was
worn, there being no superfluous length to dispose of. The side was
sewn up so that the garment before being pinned was cylindrical in
shape. This somewhat scanty garment was the only one worn by
slaves, and men engaged in active pursuits and workmen frequently
wore it fastened only on one shoulder, leaving the other bare and the
arm quite free. When worn in this way it was called the χιτὼν ἔξωμις
or ἑτερομάσχαλος; the god Hephaistos is usually represented
wearing it in this way in his capacity as craftsman. We learn from
Pollux, vii., 47, that the ἔξωμις was a περιβλῆμα as well as an
ἔνδυμα, from which we may gather that a small cloak was
sometimes worn fastened on one shoulder and girt round the waist,
but left unsewn down the side. Fig. 19 represents the χιτὼν ἔξωμις.
Representations of Amazons and of Artemis the huntress are
frequent, wearing the χιτὼν ἔξωμις; but in these cases it is usually a
longer garment than that worn by men, and its superfluous length is
drawn up over the girdle, forming a pouch; and then a second girdle
is worn over this to prevent it from flapping in the wind. The
Amazons of the Mausoleum frieze wear the short Doric dress without
overfold and unsewn down the side; this, however, is perhaps merely
a device on the part of the sculptor to afford an opportunity of
displaying the physical forms, as well as the drapery. Various
references in literature show that the Spartan women wore more
scanty clothing than the Athenians; they are described as μονοχίτων,
“wearing a single garment,” and we learn from Pausanias that the
girls who competed in the running races at Olympia wore the short
χιτὼν ἔξωμις. As monumental testimony to the truth of this
statement, we have the statue of a girl runner in the Vatican
Museum.
 Fig. 19.—Bronze Statuette—British Museum.
[Face page 53.

The τρίβων worn by Spartans and people of austere or Laconizing

tendencies, like Socrates and the Cynic philosophers, was probably a
scanty Doric chiton made in some coarse homespun material; men of
leisure and elderly men preferred to wear a longer chiton with
sleeves either sewn or fastened with brooches; this was the case
even after the reaction against anything savouring of Orientalism
which followed the Persian wars. If we are to consider the
monuments, both sculpture and vases, as giving a realistic picture of
Greek life, we shall see that men frequently wore only the himation;
but it is difficult to believe that this was so, except, perhaps, in the
height of summer.
The methods of draping the himation were the same for men as
for women, except that after the period of the early black-figured
vases we do not find men represented wearing it laid on both
shoulders like a shawl; nor do they ever wear it drawn up over the
head, although in the sunshine of a southern summer some such
protection against the heat might be considered indispensable. The
favourite style for men was that of laying the one end on the left
shoulder and drawing the rest round the body from the back and
throwing the other end either across the left forearm or over the
shoulder.[97] This was called wearing the himation ἐπὶ δεξιὰ,
presumably because it was drawn closely round the right side of the
body. It was considered a mark of good breeding to throw it over the
shoulder and let it hang down in such a way as to cover the left arm
completely.[98] To wear it ἐπ᾽ ἀριστέρα, “over the left side,” was a
mark of boorishness, as we gather from Aristophanes Birds,[99]
where Poseidon taunts the barbarian Triballus for wearing it so.
Fig. 20.—Vase-painting—British Museum.
[Face page 54.