Archive for 3 March 2007
John Stuart Mill in Math
| Peter Klein |
When I teach Bayes’s Theorem to my graduate students I use the Monty Hall paradox for illustration.
- Priors:
- Suppose you choose door 3; Monty reveals door 2.
- What’s
?
It’s
So you should switch doors!
The problem is that few students in their 20s or early 30s have ever seen an episode of Let’s Make a Deal. (I have a college friend whose mother was a contestant on the show, dressed as a giant chicken.)
Glenn Whitman provides another example for illustrating Bayes’s Theorem, based on this quotation from John Stuart Mill: “The Conservatives, as being by the law of their existence the stupidest party. . . . ” Mill subsequently offered this clarification: “I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative.” (more…)
“Right-Wing Crap-onomics”
| Peter Klein |
Charismatic public figures tend to be lightning rods both for criticism and for praise. Ronald Reagan, for example, aroused far more passion among both supporters and detractors than did the first President Bush, just as Bill Clinton was both loved and hated far more than Jimmy Carter.
Thus it’s no surprise to find a discussion of Foss and Klein at the student-run Austrian Economics Forum degenerating into a shouting match. (At least this discussion is more civil.)
And check out the comments to this blog post on microfinance. One commentator links to O&M (this post), to which another commentator replies: “The blog you link espouses right-wing crap-onomics. Note one of the categories listed their is the Austrian school of economics, which is just about as effective as the American school of nation-building.”
Isn’t it nice how the web brings out the best in people?
Enacting Privatization
| Nicolai Foss |
Here at O&M we have often criticized and poked fun at ideas on social construction and their derived notions in management, such as Weickian “enactment.” Still, it is a fundamental tenet of classical liberalism that ideas matter and matter crucially (although some classical liberals, notably George Stigler, have argued that ideas matter much less than economists would like to think). One crucial area where ideas would seem to have mattered a great deal is privatization (a term that seems to have been invented by Peter Drucker).
In a paper, “Palace Wars and Privatization: Did Chicago Beat Cambridge in Influencing Economic Policies,” just published in the European Management Review, J. Muir McPherson adds to his earlier work with Bruce Kogut (this paper; for a related idea diffusion paper, see this), and examines the influence of “the epistemic community of American-trained economists” (based on the number of non-US, US and Chicago PhD degrees in a given country) on privatization policies. The dataset encompasses self-collected data on 13,422 economists. The statistical methodology is a hazard model. The results indicate a clear impact of the frequency of US-trained economists on the probability of privatization, but it is also noteworthy that among theUS economists, “As Chicago ideas won out . . . the difference between Chicago economics PhDs and graduates from other schools could no longer be detected from the general influence of US-trained economists on the decision to privatize.”
Organizations and Markets 
Recent Comments