Archive for September, 2007

More Crappy Research

| Peter Klein |

We’ve written before about the history of industrial recycling, how waste products, both natural (manure, animal parts) and man-made (scrap metal, old rags), were frequently collected and re-used, for profit, at the dawn of the Industrial Revolution.

Now comes another paper on the market for manure: Liam Brunt’s “Where There’s Muck, There’s Brass: The Market for Manure in the Industrial Revolution” (Economic History Review 60, no. 2, May 2007, 333-72). (Non-gated version here.) Writes Brunt:

In this paper we present the first detailed assessment of off-farm manure in English agriculture, by quantifying the use of 21 varieties. We consider how many people were using each type of manure; how much they were using; and the total effect on wheat yields. . . . We show that by 1770 there were local, regional and even international markets for manure; and we can explain the pattern of manure use by supply and demand. We estimate that off-farm manure raised yields by a steady 20 per cent throughout the period 1700 to 1840.

I suppose I could have titled this post (channelling Tyler Cowen) “Markets in Everything: ________ Edition” (fill in the blank yourself).

25 September 2007 at 9:16 am Leave a comment

Knightian Uncertainty Workshop

| Peter Klein |

The authors of this blog find Knightian uncertainty a useful concept for understanding both entrepreneurship and the economic theory of the firm (e.g., here and here). So we were pleased to learn about a workshop on Knightian uncertainty organized earlier this month at Columbia University by and Daniel Beunza David Stark. Nassim Taleb was there, as were Douglass North, Anna Grandori, Bruce Kogut, Adam Branderburger, and others well known to readers of this blog. Buenza summarizes the discussion and offers some commentary at the Socializing Finance blog.

One problem with the treatment of Knightian uncertainty in the management literature (not necessarily in the presentations above) is that the concept itself is not always defined precisely and consistently. Terms like Knightian uncertainty, radical uncertainty, case probability, complexity, ambiguity, and plain old uncertainty are often used interchangeably. Sometimes what is meant is ignorance of the relevant probability distributions. Sometimes it is ignorance of one’s own ignorance. Sometimes it means simply the lack of common (Bayesian) priors. To move forward, more clarity is surely needed.

24 September 2007 at 11:17 am 3 comments

Corporate Venturing

| Peter Klein |

Here are presentation slides from a 2007 Academy of Management Professional Development Workshop (PDW) on corporate venturing. The presenters were Gary Dushnitsky, Thomas Keil, Riitta Katila, Suresh Kotha, Michael Lenox, Markku Maula, Corey Phelps, Shaker Zahra, and Rosemarie Ziedonis.

Don’t forget that slides from our PDW on Austrian economics are available as well.

23 September 2007 at 4:05 pm Leave a comment

Separated at Birth, Management Professor Edition

| Peter Klein |


Bill Hesterly and Robert Wagner


Steve Postrel and Vincent Schiavelli


Jackson Nickerson and David Duchovny

Other suggestions?

22 September 2007 at 9:01 am 10 comments

New Survey Paper on Vertical Integration

| Peter Klein |

Francine Lafontaine and Margaret Slade’s superb review paper on vertical integration, “Vertical Integration and Firm Boundaries: The Evidence,” appears in the current issue of the Journal of Economic Literature. (Non-gated version here.) Unlike previous reviews focusing on particular theoretical frameworks (e.g., my NIE Handbook paper on the transaction-cost approach), Lafontaine and Slade consider a broad range of factors potentially affecting vertical integration such as risk, agent effort, firm size, monitoring costs, and repeated interaction as well as the usual transaction-cost variables (asset specificity and uncertainty). They also look closely, following Whinston (2003), at distinctions between the transaction-cost (Williamson) and property-rights (Grossman-Hart-Moore) approaches. Here’s the abstract:

Since Ronald H. Coase’s (1937) seminal paper, a rich set of theories has been developed that deal with firm boundaries in vertical or input–output structures. In the last twenty-five years, empirical evidence that can shed light on those theories also has been accumulating. We review the findings of empirical studies that have addressed two main interrelated questions: First, what types of transactions are best brought within the firm and, second, what are the consequences of vertical integration decisions for economic outcomes such as prices, quantities, investment, and profits. Throughout, we highlight areas of potential cross-fertilization and promising areas for future work.

Also recommended, from the same issue of the JEL, is Bentley MacLeod’s “Reputations, Relationships, and Contract Enforcement.”

21 September 2007 at 3:27 pm 2 comments

Organization Theory en Français

| Peter Klein |

French-speaking readers may enjoy Nathalie Gardes’s blog Theories des Organisations. There’s a bit too much on pouvoir for my tastes, but the site looks interesting nonetheless.

20 September 2007 at 4:20 pm 1 comment

More on Tacit Knowledge

| Nicolai Foss |

O&M has featured a number of posts that are critical of the hugely influential notion of tacit knowledge (e.g., here and here). The latest issue of the Journal of Economic Methology has as nice paper by Jonathan Perrant and Iona Tarrant, ‘What Does Tacit Knowledge Actually Explain?” (more…)

20 September 2007 at 10:52 am Leave a comment

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Our Recent Books

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).