Archive for April, 2010

Nerd Merit Badges

| Peter Klein |

How many of these could you earn?

My favorite is Inbox Zero (right), perhaps because it’s the least attainable. (And no, I didn’t know what foursquare was either.) Thanks to Wired for the pointers.

The cynical among you may prefer The Onion’s take on merit badges.

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29 April 2010 at 3:11 am 2 comments

Quote of the Day, Free Trade and Peace Edition

| Peter Klein |

Go into the London Stock Exchange — a more respectable place than many a court — and you will see representatives of all nations gathered there for the service of mankind. There the Jew, the Mohammedan, and the Christian deal with each other as if they were of the same religion, and give the name of the infidel only to those who go bankrupt. There the Presbyterian trusts the Anabaptist, and the Anglican accepts the Quaker’s promise. . . . If there were just one religion in England, despotism would threaten; if there were two religions, they would cut each other’s throats; but there are thirty religions, and they live together peacefully and happily.

—Voltaire (Letters on England, Letter 6)

Source.

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28 April 2010 at 10:40 am 3 comments

Lazear on Leadership

| Peter Klein |

Ed Lazear tries his hand at the leadership literature in “Leadership: A Personnel Economics Approach.” The paper fits closely with his earlier work on entrepreneurship (here and here). Intuition:

The view presented [here] is that leaders are individuals who confront new situations often and choose the right direction in a high proportion of cases. Leaders also have the ability to identify situations where their skills will be needed and to do this frequently in a public setting. As a result of their success in choosing direction, and because the success is observable to others, leaders acquire followers who turn to the leaders for guidance in new and ambiguous situations. Individuals follow those who make correct decisions for a variety of reasons, the most direct of which is that they will boost their own probabilities of being correct by mimicking the decisions of the leaders. Thus, a leader is someone who has both vision and wisdom and who attracts a coterie of followers because of displayed superiority of decision making.

Because leaders are confronted with a wide variety of choices and because these choices span many fields, leaders tend to be generalists rather than specialists. Further, the broader the organization that an individual leads, the more general are the skills. . . .

An additional key ingredient is that leaders also possess the skills necessary to convince others that they have leadership ability. Consequently, communication skills are likely to be an important component in the leadership mix.

A formal model generates some testable propositions: “1. Ability and visibility, manifested in number of contacts per period, are complements. The most able seek to be the most visible in decision making settings. 2. The most able leaders are in the highest variance industries. 3. Leaders are generalists.” Survey data from Stanford MBAs are consistent with #2 and #3. Overall, a useful contribution to the small economics-of-leadership literature pioneered by Ben Hermalin.

Update: I neglected to mention this very important paper on leadership.

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27 April 2010 at 11:33 am 3 comments

Business Ethics Symposium in Reason Papers

| Peter Klein |

From Reason Papers 31 (Fall 2009):

Articles: Business Ethics Symposium

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26 April 2010 at 9:35 pm 3 comments

O&M Four-Year Anniversary

| Peter Klein |

O&M went live April 25, 2006. Our inaugural post said: “Welcome to all readers. (Hopefully the plural is appropriate.)” Since then we’ve spread our message to literally tens of people around the world. Actually, the numbers aren’t bad: over these four years we’ve delivered 2,247 posts and 6,036 comments to 797,965 unique visitors (based on IP address). The comments are of consistently high quality too. Thanks to all current and former guest bloggers, commenters, pingbackers, lurkers, and other friends.

For a blast from the past, why not try our random post link? You never  know what you’ll find. . . .

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25 April 2010 at 1:06 am 9 comments

Esther Duflo Wins Clark Medal

| Peter Klein |

Congratulations to MIT’s Esther Duflo for winning the John Bates Clark Medal. (NB: Unlike Richard T. Ely, J. B. Clark was actually a great economist.) Duflo is a pioneer in the use of randomized controlled trials (RCTs) which, along with natural experiments, is becoming an increasingly popular alternative to conventional regression models. Interestingly, the WSJ reports that Harvard’s Sendhil Mullainathan, another RCT person, was also on the short list. Given the extreme faddishness of social scientists we can expect a wave of RCT centers, experiments, and papers in the next few years.

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23 April 2010 at 3:07 pm 3 comments

New Klein Book

| Peter Klein |

The Mises Institute is publishing a collection of my papers as The Capitalist and the Entrepreneur: Essays on Organizations and Markets (love that subtitle!). You can view some promotional materials, the table of contents, and drafts of the introduction and a sample chapter at the link above. Publication is scheduled for May 2010. I’ll post ordering information as soon as I have it. Start saving your pennies today!

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22 April 2010 at 2:28 pm 11 comments

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
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