Posts filed under ‘People’

More Orson

| Peter Klein |

A useful management tip from the great director:

Orson Welles: Did I ever tell you the story of [Franz Joseph's] visit to the provinces? It’s a great movie story. You can use it on set almost any day with an assistant director.

Henry Jaglom: What is it?

OW: Franz Joseph is riding in his carriage through this tiny provincial town, plumes and all. The trembling mayor is sitting next to him. He says, “Your Imperial Highness, I have to apologize to you in the profoundest terms for the fact that the bells are not ringing in the steeple. There are three reasons. First, there are no bells in the steeple — ” And Franz Joesph interrupts him and says, “Please don’t’ tell me the other two reasons.” Now, that’s a good answer for every assistant director, everyone in the world that you’ve had working for you in any capacity.

HJ: Where you just want to get a straight answer. . . .

OW: I tell that story when I make a movie, always. When somebody starts with the excuses, I say, “Bells in the steeple.” It stops them every time.

Student: “I didn’t finish the assignment because, well, um. . . .” Professor: “Bells in the steeple!” I’m putting that one on my syllabus.

29 July 2013 at 9:01 am Leave a comment

Orson Welles on Organizational Structure

| Peter Klein |

Welles was perhaps the greatest auteur of cinema and modern theater, so it’s no surprise that he comes out in favor of flatter hierarchies:

OW: [Irving] Thalberg was the biggest single villain in the history of Hollywood. Before him, an producer made the least contribution, by necessity. The producer didn’t direct, he didn’t act, he didn’t write — so, therefore, all he could do was either (A) mess it up, which he didn’t do very often, or (B) tenderly caress it. Support it. Producers would only go to the set to see that you were on budget, and that you didn’t burn down the scenery. But [Louis B.] Mayer made way for the producer system. He created the fellow who decides, who makes the directors’ decisions, which had never existed before.

HJ: Didn’t the other studio heads interfere with their directors?

OW: None of the old hustlers did that much harm. If they saw somebody good, they hired him. They tried to screw it up afterwards, but there was still a kind of dialogue between talent and the fellow up there in the front office. They had that old Russian-Jewish respect for the artist. All they did was say what they liked, and what they didn’t like, and argue with you. That’s easy to deal with. And sometimes the talent won. But once you got the educated producers, he has a desk, he’s gotta have a function, he’s gotta do something. He’s not running the studio and counting the money — he’s gotta be creative. That was Thalberg. The director became the fellow whose only job was to day, “Action” and “Cut.” Suddenly, you were “just a director” on a “Thalberg production.” Don’t you see? A role had been created in the world. Just as there used to be no conductor of symphonies.

HJ: There was no conductor?

OW: No. The konzertmeister, first violinist, gave the beat. The conductor’s job was invented. Like the theater director, a role that is only 150, 200 years old. Nobody directed plays before then. The stage manager said, “Walk left on that line.” The German, what’s his name, Saxe-Meiningen, invented directing in the theater. And Thalberg invented producing in movies. He persuaded all the writers that they couldn’t write without him, because he as he great man.

Clearly Orson would not agree with my take on entrepreneurship and ultimate responsibility, as applied to the arts. Or do well in a restaurant kitchen. I have to admit, though, that Welles has a certain credibility on the subject of creativity.

21 July 2013 at 7:09 pm 2 comments

Mokyr on Cultural Entrepreneurship

| Peter Klein |

I am wary of adding yet another conceptual margin for entrepreneurial action but I highly recommend a new (and for the moment, ungated) paper in the Scandinavian Economic History Review by the distinguished economic historian Joel Mokyr on “cultural entrepreneurship.” Starting from a broadly Schumpeterian perspective, Mokyr focuses on individuals who introduce and disseminate novel ideas:

[E]ach individual makes cultural choices taking as given what others believe. It is not a priori obvious how that affects one’s choices. It may affect them positively because conformism implies that there is some social cost associated with deviancy, or because people may reason that if the majority believes a certain thing, there may be wisdom in it (thus saving on information costs). But there can be a reverse reaction as well, with non-conformists perversely rebelling against existing beliefs. What matters for my purposes is that for a small number of individuals, the beliefs of others are not given but can be changed. I shall refer to those people as cultural entrepreneurs. Their function is much like entrepreneurs in the realm of production: individuals who refuse to take the existing technology or market structure as given and try to change it and, of course, benefit personally in the process. Much like other entrepreneurs, the vast bulk of them make fairly marginal changes in our cultural menus, but a few stand out as having affected them in substantial and palpable ways.

Succinctly expressed: “cultural entrepreneurs are the creators of epistemic focal points that people can coordinate their beliefs on.”

Mokyr’s focus, like Schumpeter’s, is not entrepreneurship per se, but its effects, particularly on long-run economic growth, and his entrepreneurship construct is somewhat undertheorized. But he provides fascinating examples, ranging from Mohammed and Luther to Francis Bacon, Isaac Newton, and Adam Smith. He focuses in particular on Bacon and Newton, describing Bacon’s work as “the coordination device which served as the point of departure for thinkers and experimentalists for two centuries to come. The economic effects of these changes remained latent and subterranean for many decades, but eventually they erupted in the Industrial Revolution and the subsequent processes of technological change.” Newton and the Royal Society “raise[d] the social standing of scientists and researchers as people who should be respected and supported and [provided] them with a comfortable material existence.” (Mostly good.)

I’m not an expert on cultural theory or history and am not sure how much the “cultural entrepreneur” construct ads to our understanding of cultural change (other than relabeling, a frequent worry in entrepreneurship studies). But the paper is a great read, highly provocative and informative, and addresses big questions. Check it out.

26 June 2013 at 8:43 am 4 comments

Steven Klepper

| Dick Langlois |

I just learned (via Rajshree Agarwal) of the passing, at a young age, of Steven Klepper. Steven was an acquaintance of many years, a stand-up guy as well as a great researcher. His work on the lifecycle of firms and the role of spinoffs is a model for how to do good empirical work in organization and technology. By coincidence, this new paper (with Russell Golman) crossed my screen only a few minutes after I learned the news.

Spinoffs and Clustering

Geographic clustering of industries is typically attributed to localized, pecuniary or non-pecuniary externalities. Recent studies across innovative industries suggest that explosive cluster growth is associated with the entry and success of spinoff firms. We develop a model to explain the patterns regarding cluster growth and spinoff formation and performance, without relying on agglomeration externalities. Clustering naturally follows from spinoffs locating near their parents. In our model, firms grow and spinoffs form through the discovery of new submarkets based on innovation. Rapid and successful innovation creates more opportunities for spinoff entry and drives a region’s growth.

28 May 2013 at 3:31 pm 3 comments

Keynes in the Spotlight

| Peter Klein |

NPG P363(14); John Maynard Keynes, Baron Keynes by Ramsey & MusprattAs the Niall Ferguson kerfuffle begins fading from memory it’s worth revisiting the underlying issue: What kind of person was John Maynard Keynes, and (how) did his social, cultural, moral, and aesthetic views affect his scientific work?

Here are a few recommended readings:

These works are not kind to ole’ John Maynard (I’m posting them, what did you expect?). Rothbard, for example, emphasizes Keynes’s “overweening egotism, which assured him that he could handle all intellectual problems quickly and accurately and led him to scorn any general principles that might curb his unbridled ego,” also referring to Keynes’s “deep hatred and contempt for the values and virtues of the bourgeoisie,” including savings and thrift. It’s hard to imagine that Keynes’s personal views on thrift could be unrelated to the now-ubiquitous, über-Keynesian idea that spending, not savings and capital accumulation, is the driver of economic growth.

On time preference, and its social and cultural causes and consequences, I recommend Time and Public Policy by T. Alexander Smith (University of Tennessee Press, 1988), which unfortunately appears to be out of print. Here is a brief review by Israel Kirzner.

17 May 2013 at 2:07 pm 2 comments

Shelanski Tapped for Top Regulatory Post

| Peter Klein |

shelanski-howard2My old classmate, fellow Oliver Williamson student, and coauthor Howard Shelanski has been nominated to head the Office of Information and Regulatory Affairs (the post typically described as Regulation Czar). Howard was in the joint PhD-JD program at Berkeley, went on to clerk for Antonin Scalia, joined the faculty at Berkeley’s School of Law, and served in a number of regulatory posts before moving to Georgetown. He currently heads the FTC’s Bureau of Economics.

Howard’s a super-smart guy, whom I’d describe as an antitrust moderate (unlike me, an anti-antitrust extremist). He’s sympathetic to “post Chicago” antitrust theory and policy, but more of a nuts-and-bolts, case-by-case guy. I’m not a fan Cass Sunstein, current head of the OIRA, and I expect to like Howard’s performance much better. Howard doesn’t share Sunstein’s enthusiasm for behavioral analysis, for example, as seen in an interview last December, where he said this about the role of behavioral economics in antitrust:

I think there is a role, but one needs to be very modest and cautious. There has been a lot written and a lot said about how behavioral economics fundamentally undermines the models on which we do antitrust analysis. And I think most people involved with antitrust enforcement, most people who think about competition issues, would disagree that there is some fundamental new paradigm shift in the works. But behavioral economics does supply insights into how consumers might respond to certain kinds of information, contracting practices, or pricing schemes. This can be very useful to understanding certain kinds of market performance and has led to greater modesty about imputing perfect foresight or rationality to  consumers.

But one needs to understand that that is not the sign of a broader behavioral economics revolution in antitrust.

My general feelings about regulatory czars are well summarized by this passage from Fiddler on the Roof, quoted today by Danny Sokol in the same context:

Young Jewish Man: Rabbi, may I ask you a question?
Rabbi: Certainly, my son.
Young Jewish Man: Is there a proper blessing for the Tsar?
Rabbi: A blessing for the Tsar? Of course! May God bless and keep the Tsar . . . far away from us!

26 April 2013 at 3:40 pm 3 comments

Doug Allen on Alchian

| Peter Klein |

A remembrance from our friend Doug Allen:

I only met Armen once, but his influence on me was profound. In the fall of 1980 I was taking intermediate micro economics to fulfill a Business Degree requirement. The course was taught by the great Art DeVany, who had been a student of Armen’s at UCLA. Naturally he used “Exchange and Production” as his text. I remember vividly the day — it was a Thursday, late on a cloudy afternoon — when I entered a corner of a large hallway on campus. I was thinking about the concept covered in class that week: “prices are not determined by costs.” I went into that corner thinking like an accountant, and when I came out the other side I was thinking like an economist. It was an epiphany. I came out thinking “of course prices are not determined by costs!”

I quickly changed majors, decided to postpone law school for a detour in graduate economics, and have never looked back. Fortunately for me my advanced undergraduate theory class was taught by Chris Hall, an intellectual grandson of Armen’s via Steve Cheung. His text for the course was “Economic Forces at Work.” I loved Armen’s writing, his style, and his ease in making life a big puzzle to solve.

I mentioned that I have only met the great man once. It was at a PERC conference in the early 1990s. The small group sat around tables in alphabetical order, and so Alchian was first and (Doug) Allen was second. I jokingly said “ah, Alchain and Allen, together again.” I thought it was quite witty, but Armen ignored the remark. I made some other comments that he was similarly impressed with. So, remembering that “even a fool is counted wise when he keeps his mouth shut,” I just sat back and listened. It was a great treat, and Armen didn’t seem to mind having me tag along for the weekend. My favorite recollection was a long discussion we had over how Rockefeller actually made money.

As I think about his passing, the one thought that strikes me is “where is the Armen Alchain for today?” Where is the economist’s economist? I suppose there just never will be another AAA.

19 February 2013 at 4:11 pm 2 comments

Armen Alchian (1914-2013)

| Peter Klein |

Armen Alchian passed away this morning at 98. We’ll have more to write soon, but note for now that Alchian is one of the most-often discussed scholars here at O&M. A father of the “UCLA” property-rights tradition and a pioneer in the theory of the firm, Alchian wrote on a dizzying variety of topics and was consistently insightful and original.

Alchian was very intellectually curious, always pushing in new directions and looking for new understandings, without much concern for his reputation or legacy. One personal story: I once asked him, as a naive and somewhat cocky junior scholar, how he reconciled the team-production theory of the firm in Alchian and Demsetz (1972) with the holdup theory in Klein, Crawford, and Alchian (1978). Aren’t these inconsistent? He replied — politely masking the irritation he must have felt — “Well, Harold came to me with this interesting problem to solve, and we worked up an explanation, and then, a few years later, Ben was working on a different problem, and we started talking about it….” In other words, he wasn’t thinking of developing and branding an “Alchian Theory of the Firm.” He was just trying to do interesting work.

Updates: Comments, remembrances, resources, links, etc.:

19 February 2013 at 10:48 am 4 comments

Hayek and Organizational Studies

| Peter Klein |

That’s the title of a new review paper by Nicolai and me for the forthcoming Oxford Handbook of Sociology, Social Theory, and Organizational Studies, edited by Paul Adler, Paul du Gay, Glenn Morgan, and Mike Reed (Oxford University Press, 2013). No, we haven’t gone over to the Dark Side (I mean, the good side), we just think Hayek’s work deserves to be better known among all scholars of organization, not only economists. Unlike many treatments of Hayek, we don’t focus exclusively, or even primarily, on tacit knowledge, but on capital theory, procedural rules, and other aspects of Hayek’s “Austrian” thinking.

You can download the paper at SSRN. Here’s the abstract:

We briefly survey Hayek’s work and argue for its increasing relevance for organizational scholars. Hayek’s work inspired aspects of the transaction cost approach to the firm as well as knowledge management and knowledge-based view of the firm. But Hayek is usually seen within organizational scholarship as a narrow, technical economist. We hope to change that perception here by pointing to his work on rules, evolution, entrepreneurship and other aspects of his wide-ranging oeuvre with substantive implications for organizational theory.

8 February 2013 at 2:40 pm 2 comments

Web-Savvy Profs

| Peter Klein |

top_web_savvy_professor_2012I’m #57 on a new list of Top 100 Web-Savvy Professors. Teppo smokes me at #19, but I’m right up there with Clay Christensen, Noriel Roubini, Austan Goolsbee, Richard Thaler, and other luminaries. I don’t know the group behind the list or how the ranking was compiled, but it looks good to me. In any case, this will give you more names to follow on blogs or Twitter. Enjoy!

11 December 2012 at 10:27 pm 2 comments

Business and Poetry

| Peter Klein |

Wallace Stevens was one of America’s greatest poets. The author of “The Emperor of Ice-Cream” and “The Idea of Order at Key West” was awarded the Pulitzer Prize for Poetry in 1955 and offered a prestigious faculty position at Harvard University. Stevens turned it down. He didn’t want to give up his position as Vice President of the Hartford Accident and Indemnity Company.

This lyrically inclined insurance executive was far from alone in occupying the intersect of business and poetry. Dana Gioia, a poet, Stanford Business School grad, and former General Foods executive, notes that T.S. Eliot spent a decade at Lloyd’s Bank of London; and many other poets including James Dickey, A.R. Ammons, and Edmund Clarence Stedman navigated stints in business.

Sure, quants rule, but literary types have a role to play in business too. And some of the great literary and artistic figures, such as Dickens, Rubens, and even Shakespeare, were successful business managers. The quoted passage is from John Coleman’s “The Benefits of Poetry for Professionals” in the HBR blog.

29 November 2012 at 7:03 pm 2 comments

Coase on the Economists

| Peter Klein |

Ronald Coase has a short piece in the December 2012 Harvard Business Review, “Saving Economics from the Economists” (thanks to Geoff Manne for the tip). Not bad for a fellow about to turn 102! I always learn from Coase, even when I don’t fully agree. Here Coase decries the irrelevance of contemporary economic theory, condemning economics for “giving up the real-world economy as its subject matter.” He also provides a killer quote: “Economics thus becomes a convenient instrument the state uses to manage the economy, rather than a tool the public turns to for enlightenment about how the economy operates.”

I’m sure that’s true for many economists and for some branches of the field, such as Keynesian macroeconomics. But Coase seems to reject economic theorizing altogether, even the “causal-realist” approach popular in these parts. To be useful, he argues, economics should provide practical guidance for the businessperson. However, “[s]ince economics offers little in the way of practical insight, managers and entrepreneurs depend on their own business acumen, personal judgment, and rules of thumb in making decisions.”

Well, that sounds about right to me. Economics provides general principles, or laws, about human action and interaction, mostly stated as “if-then” propositions. Applying the principles to concrete, historical cases requires Verstehen, and is the task of economic historians (as analysts) and entrepreneurs (as actors), not economic theorists. Deductive theory does not replace judgment. Without deductive theory, however, we’d have no principles to apply, and nothing to contribute to our understanding of the economy except — to quote Coase’s own critique of the Old Institutionalists — “a mass of descriptive material waiting for a theory, or a fire.” To be sure, Coase’s own inductive method has led to several brilliant insights. Coase himself has a knack for intuiting general principles from concrete cases (e.g., theorizing about transaction costs from observing automobile plants, or about property rights from studying the history of spectrum allocation), though not perfectly. But, as I noted before, Coase himself is probably the exception that proves the rule — namely that induction is a mess.

21 November 2012 at 5:21 pm 5 comments

More Genghis Revisionism

| Peter Klein |

You’ve probably heard the expression, “X is so extreme, he’s to the Right of Genghis Khan.” This basically means, “I don’t like X but have nothing intelligent to say about X or his ideas.” Mostly because we don’t know much about Genghis Khan, and what we do know presents a pretty complex picture. I mentioned before Jack Weatherford’s revisionist portrayal of the Great Khan as a somewhat progressive ruler, by the standards of his time. Now I learn, from Joe Salerno, about a paper by Andrius Valevicius “arguing that Genghis Khan’s successful empire building lay in his introduction of low taxes, stamping out of torture, and promotion of religious toleration and diversity and free scholarly inquiry in the conquered territories. The Great Khan also restricted his plundering to the wealth and property of the vanquished ruling elites while  leaving their subjects generally unmolested in their persons and property and even distributing some of the plunder among them.”

19 November 2012 at 3:43 pm 5 comments

Tom McCraw

| Dick Langlois |

I was saddened to hear today of the passing of Tom McCraw at the young age of 72. I didn’t always agree with him: he was a strong admirer of the Progressives, and even tried implausibly to suggest in Prophet of Innovation, his great biography of Schumpeter, that Schumpeter would have agreed with Progressive policies had he been alive today. But McCraw was a gentleman, a fine writer, and an important figure in business history. Prophet of Innovation is a terrific book. I wish I had written it.

7 November 2012 at 10:35 am 2 comments

Remembering the Ostroms

| Peter Klein |

Indiana University’s Workshop in Political Theory and Policy Analysis has a memorial section for the Elinor and Vincent Ostrom, both of whom passed away this year. Here’s my colleague David O’Brien:

I was a graduate student in Sociology at Indiana University in the late 1960s when I was looking for some courses in Political Science to fulfill the requirements for a minor. I had signed up for a course but the professor left for another university and somehow, by default, I took Lin’s course on “Political Calculus.” Like so many others in my discipline at the time I saw the world from a zero-sum conflict perspective. At the beginning of the semester I felt like I was in intermediate Chinese and had not taken the basic course. Riker’s Theory of Political Coalitions and Buchanan and Tullock’s Calculus of Consent were among the many readings that baffled me. What I remember most about Lin’s teaching was her enthusiasm and the fun she was having in doing her work. There were a lot of serious, somewhat dour, professors around in the late 1960s and not many women in teaching positions in the social sciences. So Lin stood out by her demeanor as well as her intellectual gifts. She had genuine concern for other human beings, including someone like me who did not have a clue as to what was going on and she persistently nudged me to keep an open mind about how I would approach the world as a social scientist. She did something very unusual in those days, which was to suggest that the boundaries between disciplines were artificial.

I did not fully appreciate Lin Ostrom’s influence on my scholarly life until many years after I left IU. Her encouragement to look beyond the disciplinary walls led me to use Mancur Olson’s Logic of Collective Action, one of the books assisgned in the Political Calculus course, as the theoretical foundation of my first work on urban neighborhood organization. Her encouragement for working across disciplines encouraged me to work in partnership with psychologists, political scientists and economists on a variety of research projects find a comfortable home in a Division of Applied Social Sciences.

I thoroughly enjoyed my conversations with Vincent, who became a member of my dissertation committee. He helped me to understand how collective action challenges that we face in our day are analytically similar to those faced centuries ago. I am especially grateful to Vincent for introducing me to the importance of constitutions and federalism, but also to Tocqueville’s observations of the relationship between “association” and “habits of the heart.” Vincent’s insightful observations on the complex relationships between formal and informal institutions have had a significant impact on my approach to household and village adaptations to post-command economy transitions in the former Soviet Union and East Africa.

Most important, Lin and Vincent led by example. They were genuinely kind human beings who were always willing to listen to others and encourage them, engage in spirited debate and thoroughly enjoyed doing applied scholarship.

7 November 2012 at 7:09 am Leave a comment

Social Justice Quote of the Day

| Peter Klein |

Hayek, interviewed in 1983 by Encounter:

Hayek: “I regard ‘social justice’ as a nonsensical term….”

Interviewer: “But do we have the concept of the ‘social market economy’?”

Hayek: “May I tell you the story of when I last spoke to Dr. Ludwig Erhard? We were alone for a moment, and he turned to me and said, ‘I hope you don’t misunderstand me when I speak of a social market economy (Sozialen Marktwirtschaft). I mean by that that the market economy as such is social, not that it needs to be made social. . . .’ If you had to make the market economy ‘social,’ . . . you can justify every demand that cannot be reconciled with having the market determine prices and incomes. There’s no better way of destroying the market economy than with the concept of ‘social justice.’”

27 October 2012 at 9:10 am 2 comments

Mormons in Management

| Peter Klein |

There’s an old joke about God calling the Pope. “I’ve got good news and bad news. The good news is that I’ve answered your prayer — I’m uniting all the world’s religions under one church and one leader.” Great, the Pope responds, what’s the bad news? “I’m calling from Salt Lake City.”

It’s commonly observed that the academic fields of strategy, organization, and entrepreneurship are over-represented by scholars from the Mormon faith: Christensen, Clark, Barney, Hoskisson, Dyer, Whetten, Zenger, and Felin, to name just a few. Often this is explained by superior social networking and the role of BYU as an anchor entity. But I don’t know any systematic academic research on the phenomenon.

A Wednesday HBR blog entry, “How Mormons Have Shaped Modern Management,” takes a different tack, focusing on the beliefs and practices of the Mormon church. An interesting read. See also a 2011 Business Week piece on the role of the Mormon mission.

19 October 2012 at 4:59 pm 9 comments

Henry Manne at Missouri, on the Crisis in Higher Education

| Peter Klein |

Missouri friends, please join us next Tuesday for a lecture by Henry Manne on the governance and organization of US higher education institutions:

The Crisis in Higher Education:
Origins and Problems of University Governance

Henry G. Manne
Dean Emeritus, George Mason University Law School

Tuesday, October 23, 2012, 3:30-4:45pm
MU Student Center, Room 2206
University of Missouri

Sponsored by the Liberty and Justice Colloquium, University of Missouri
Free and Open to the Public

Henry G. Manne is Dean Emeritus of the George Mason School of Law and an expert on insider trading, legal education, university governance, and law and economics. He has also taught at St. Louis University, the University of Wisconsin, George Washington University, the University of Rochester, Stanford University, the University of Miami, Emory University, the University of Chicago, and Northwestern University.

Dean Manne is an Honorary Life Member of the American Law and Economics Association, which honored him as one of the four founders of the field of Law and Economics. He launched the Law and Economics Center at Emory University and the University of Miami before bringing it to George Mason University. His monograph, An Intellectual History of the School of Law, George Mason University, traces the development of the law and economics.

Dean Manne’s other writings include such seminal works as Insider Trading and the Stock Market, Wall Street in Transition (with E. Solomon), and “Mergers and the Market for Corporate Control” Journal of Political Economy, 1965). He is also a frequent contributor to the Wall Street Journal. In 1999, the Case Western Reserve Law Review published the papers from a symposium honoring the many contributions of Dean Manne to the law and economics movement as The Legacy of Henry G. Manne. The Liberty Fund recently published The Collected Works of Henry G. Manne in three volumes.

Dean Manne holds a B.A. from Vanderbilt University (1950), J.D. from the University of Chicago (1952), J.S.D. from Yale University (1966), LL.D. from Seattle University (1987), and LL.D. from the Universidad Francesco Marroquin in Guatemala (1987).

16 October 2012 at 10:04 pm 5 comments

Market Design

| Peter Klein |

A few quick thoughts on today’s Nobel Prize announcement. More later, once better informed people, from whom we can steal ideas, have weighed in.

  • Market design is basically the study of exchange without prices. As most of economics deals with prices, this is a somewhat specialized subfield.  The best-known example, courtesy of Al Roth, deals with kidney exchanges. Most economists will tell you that the best way to deal with shortages of transplantable organs like kidneys is to legalize kidney sales. (My friend Andy Barnett and the late David Kaserman wrote extensively on this.) If, for whatever reason, that is infeasible — Roth notes that many people find such sales “repugnant” — then various matching algorithms may be better than nothing. Roth and colleagues have studied and compared these matching algorithms.
  • To get up to speed, Roth’s 2007 article in Harvard Business Review is probably a good place to start. For more technical comments see Josh Gans and Alex Tabarrok, and. Knowledge Problem is my go-to source for this kind of stuff, so I’m eagerly awaiting the commentary there.
  • We discussed market design at O&M in 2007.
  • Shapley’s contribution’s to cooperative game theory underlie Roth’s work. It’s a bit trite to point this out, but I’ll point out anyway that the huge popularity of game theory over the last three decades, particularly in IO and business strategy, rely almost entirely on noncooperative game theory, while the cooperative branch has been somewhat neglected. But bargaining is clearly important for strategy, organization, and entrepreneurship, so look for increased interest in this branch.
  • Someone pointed out that Roth appears to be the first economics blogger to win the Nobel. (I’m not counting Krugman, who’s not what I’d call an academic blogger.)
  • Enthusiasm among my informal circle of professional friends is muted. One suggests that, rather than take cultural resistance to the price mechanism (e.g., for kidney allocation) as exogenous, scholars should work to overcome this resistance. Another calls this “one of the most boring prizes yet. At best it is a prize for some no doubt useful ideas in some small contexts of effecting coordination, but the real coordinating marvel is the market.” A third calls Shapley’s UCLA lectures on cooperative game theory “the most useless classes that I took in college. . .  we would go through one division rule after another to see which axioms they satisfied. When I asked him how you picked between different division rules that satisfied the same axioms, Lloyd said that it all depended on what conclusion that you wanted to reach.”

15 October 2012 at 10:04 am 6 comments

SMS in Prague

| Peter Klein |

The Strategic Management Society conference has just wrapped up from the lovely city of Prague. Three-fourths of the O&M team,along with several former guest bloggers, enjoyed the festivities. There were many excellent papers, panels, workshops, and social events. Too many to summarize here, but I’ll mention a few highlights:

  • A panel organized by good-twin Teppo Felin, “What Are the Big Questions in Strategy?” More on this soon from one of the participants, who used the opportunity to plug his new book shamelessly.
  • The Dan and Mary Lou Schendel Best Paper Prize, “to honor substantial work published in the SMJ,” at least five years prior to the award, to Oliver Williamson for his 1991 paper “Strategizing, Economizing, and Economic Organization.”
  • A panel on teaching strategic entrepreneurship at the undergraduate, MBA, and PhD levels. I covered the third of these; my slides are here.
  • A “common ground” session on “Austrian Economics and Creative Destruction,” demonstrating the growing interest in the Austrian school among management and organizational scholars.

I also participated in a pre-conference workshop on career strategy, and was asked to talk about social media. Should PhD students and untenured assistant professors blog, tweet, share professional information on Facebook, etc.? I said I could see no evidence that a social media presence had hurt any young scholar; quite the contrary, blogs (like this one) and other, appropriate, uses of social media, can enhance a scholar’s presence and reputation. I argued that it’s a mistake to view these as competing with serious research; after all, it’s not like someone’s going to say, “I was going to complete a major research article today, but decided to send a tweet instead.” Rather, judicious use of blogs, Facebook, Twitter, etc. is a complement to serious research. I think of it as water-cooler or lunch-table chatter with colleagues. You learn about people’s broader interests, their sense of the field, what topics they think are particularly interesting, what they’re reading, etc. Professionals like to know this about each other. Learning these sorts of things about colleagues certainly doesn’t make you think less of them!

There’s much more to report — including an episode of me impersonating a female colleague — but that will have to wait for a future post.

10 October 2012 at 4:18 am 1 comment

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).

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