Archive for January, 2008

Call for Papers: Honoring the Life and Works of Alfred Chandler

| Peter Klein |

Shawn Carraher and John Humphreys are editing a special issue of the Journal of Management History devoted to the life and work of the late Alfred D. Chandler, Jr. (1918-2007). Submissions are due 7 April 2008. Details below the fold. (more…)

10 January 2008 at 11:13 pm Leave a comment

Why Business Ignores the Business Schools

| Peter Klein |

That’s the title of Michael Skapinker’s essay in the Financial Times (via Kenneth Amaeshi), which focuses on academic research in business administration (not teaching). Unlike their counterparts in law, medicine, and engineering, Skapinker argues, B-school professors focus almost exclusively on impressing their peers, leading to work that is too abstract, jargon-filled, and theoretical to interest practitioners. He blames not only the usual publish-or-perish incentives, but also the fact that “[w]ithin the university world, business schools suffer from a long-standing inferiority complex.” B-school faculty “prefer to adorn their work with scholarly tables, statistics and jargon because it makes them feel like real academics.” Ouch.

Interesting discussion fodder, and Skapinker is surely right that some research in management suffers from scientistic pretensions (perhaps less so in finance and accounting). I do think Skapinker overstates the close relationship between research and practice in medicine. (Try asking your family physician about something you read in the New England Journal of Medicine, or ask for a confidence interval on the point estimate you’re given about the likelihood drug X will cure your condition Y.)

10 January 2008 at 10:59 pm 1 comment

The End of an Academic

| Nicolai Foss |

Three clear signs:  

  1. Edward Elgar has asked me to edit a collection of my papers. It will be published later this year under the title Organization, Property Rights, and Knowledge: Selected Papers of Nicolai J Foss.
  2. I got back a review report that condemned my submission with the following words: “It lacks the freshness of the early Foss papers.”
  3. And, now, the decisive sign, I received a mail with the following content (here anonymized):

“Dear Professor Foss,

I am contacting you from a London based executive search firm called the NN Partnership. We are currently working with UU University to find them a Dean of their Business School. I would be delighted to speak to you about this and wondered if there is a convenient time to call and indeed the best number on which to reach you.

I look forward to hearing from you. With kind regards and many thanks,

JJ, the NN partnership” 

I suppose all that is left for me now is to gracefully retire to my front porch where I can spend the time reading Human Action, smoking my old pipe, and yelling at the neighborhood kids. :-(

10 January 2008 at 9:48 am 6 comments

Prediction markets

| Steve Phelan |

One of the memes rattling round the blogosphere today is the failure of prediction markets to predict Hillary Clinton’s win in New Hampshire – in fact, to radically write off her prospects after the Iowa outcome. Paul Krugman goes so far as to entitle his blog on the subject “nobody knows anything” (as opposed to Surowiecki’s wisdom of crowds).

Surowiecki argues that wise crowds need: a) diversity of opinion, b) independence, c) decentralization (i.e. local knowledge), and d) a mechanism to aggregate private judgments.  Which leads me to ask: What is the missing element in prediction markets? To the degree that investors in prediction markets are receiving their information from common national media sources then it would seem that diversity, independence, and decentralization are missing.

9 January 2008 at 12:17 pm 2 comments

Economists on Interdisciplinarity

| Peter Klein |

I missed the ASSA/AEA session “What Should Be the Core of Graduate Economics?” featuring Susan Athey, Ed Gleaser, Bo Honoré, Blake Lebaron, Derek Neal, and Michael Woodford but there is a write-up in the Chronicle (gated, though a free version is temporarily available here). Gleaser offers perhaps the most interesting comment for the O&M crowd:

“We actually shouldn’t be thinking narrowly in terms of first-year economics.” . . . “We should be thinking about first-year social science. The whole division between economics, sociology, and political science feels like a hangover from the 19th century. So many of the people in our profession are working on problems that have traditionally been seen as part of sociology or political science.

“We should probably be rethinking from the ground up all of the social sciences,” Mr. Glaeser continued. “A more attractive model might be a first-year course sequence that trains a social scientist to work on anything, rather than having separate first-year economics, sociology, and political science course work. But maybe that’s a discussion for a different panel.”

My guess is that such a first-year sequence would have two much economics-based sociology, economics-based political science, and the like to satisfy our friends at But it is an intriguing possibility. (more…)

9 January 2008 at 9:58 am 2 comments

Why Study the Humanities?

| Peter Klein |

Stanley Fish (not one of my favorites) channels G. H. Hardy:

To the question “of what use are the humanities?”, the only honest answer is none whatsoever. And it is an answer that brings honor to its subject. Justification, after all, confers value on an activity from a perspective outside its performance. An activity that cannot be justified is an activity that refuses to regard itself as instrumental to some larger good. The humanities are their own good.

What about the social sciences? Certainly they purport to be”useful,” in a way that the humanities do not. Scholars of business administration hope their research improves business practice. Economists maintain that sound public policy requires the economist’s unique understanding of complex social phenomena. (more…)

7 January 2008 at 11:28 pm 12 comments

Econo-Bloggers and the Public Good

| Peter Klein |

An interesting result from Aaron Schiff’s survey of econo-bloggers (I was a respondent):

There [was] a series of questions asking respondents to rate factors according to their importance as motivations for blogging on a scale of 1 to 5. “Fun or entertainment,” “To raise my profile,” “Contribute to policy/political debates,” “To educate the public or disseminate research.” and “As a way of recording thoughts or ideas” were rated highest, all with a median score of 4. “Contribute to academic debates” had a median of 3, “To get reader feedback from comments” and “To improve writing skills” both scored 2, while “Actual or potential direct income” and “Actual or potential indirect income” both had a median of 1.

Economists’ desire to educate the public and to disseminate research, for the public good, is generally underrated, especially among non-economists. However, the pecuniary motives from blogging may be stronger than Aaron’s analysis suggests; the immediate rewards are few, but raising one’s profile has obvious long-term career benefits (as in the open-source case).

NB: Contrary to common belief, academic bloggers don’t think about blogging 24/7. A few times during the ASSA meeting I’d pull out my laptop during a session, to take notes or to work on my own presentation, and a panelist would ask me afterwards: “Were you blogging about me?”

7 January 2008 at 10:27 am 1 comment

O&M for the High-Time-Preference Reader

| Peter Klein |

Want to know the instant a new post or comment appears on O&M? Sign up for Pingie and have our main or comments feed — or any RSS feed — sent to your mobile phone via SMS.

5 January 2008 at 3:56 pm 1 comment

ASSA 2008 Papers on Organizations

| Peter Klein |

Some interesting papers from the ASSA Meeting in New Orleans, where I’ll be spending the next couple of days. (I don’t have links, so you’ll have to do your own Googling to find the texts.)

ROBERT GIBBONS and REBECCA HENDERSON, Massachusetts Institute of Technology — What Do Managers Do? Suggestive Evidence and Potential Theories about Building and Managing Relational Contracts

CLAUDE MENARD, ATOM – University of Paris Pantheon-Sorbonne — The Governance of Interfirm Agreements: A Relational Contract Perspective

RICARD GIL, University California-Santa Cruz, and JEAN-MICHEL OUDOT, ATOM – University Paris Pantheon-Sorbonne — Contractual Completeness and Ex-post Efficiency: Trade-Offs between Ex-Ante and Ex-Post Costs in Contract Design

LUIS GARICANO and PAUL HEATON, University of Chicago — Information Technology, Organization, and Productivity in the Public Sector: Evidence from Police Departments

DANIEL SPULBER, Northwestern University — Entrepreneurs in the Theory of the Firm (more…)

4 January 2008 at 12:55 am 1 comment

Best Dissertation Title I Read Today

| Peter Klein |

“Pimps and Ferrets: Copyright and Culture in the United States, 1831-1891,” by Eric Anderson (Bowling Green State University, American Culture Studies/History, 2007). Abstract:

How did people think about copyright in the nineteenth century? What did they think it was? What was it for? Was it property? Or something else? How did it function? Who could it benefit? Who might it harm? Pimps and Ferrets: Copyright and Culture in the United States, 1831-1891 addresses questions like these, unpacking the ideas and popular ideologies connected to copyright in the United States during the nineteenth-century.

This era was rife with copyright-related controversy and excitement, including international squabbling, celebrity grandstanding, new technology, corporate exploitation, and ferocious arguments about piracy, reprinting, and the effects of copyright law. Then, as now, copyright was very important to a small group of people (authors and publishers), and slightly important to a much larger group (consumers and readers). However, as this dissertation demonstrates, these larger groups did have definite ideas about copyright, its function, and its purpose, in ways not obvious to the denizens of the legal and authorial realms.

This project draws on methods from both social and cultural history. Primary sources include a broad swath of magazine and newspaper articles, letters, and editorials about various copyright-related controversies. Examining these sources — both mainstream and obscure — illustrates the diversity of thinking about copyright issues during the nineteenth century, and suggests alternative frameworks for considering copyright in other times.

Via Bill Stepp, who says the “study fills a yawning gap in copyright history, and offers a radically different focus on the development of this institution from the dominant legal perspective.” You’ll have to download the searchable PDF to find the meaning of the title.

3 January 2008 at 10:32 am 1 comment

Are Journal Impact Factors Reliable?

| Peter Klein |

Not really, according to the RePEc blog (via Newmark). Thompson (formerly ISI) uses an imprecise and inconsistent method to compute journal impact factors and, even worse, refuses to release the raw data so that scores can be independently verified. Journals typically require authors to make data public as a condition of publication; why use rankings based on hidden data? Writes RePEc: “[A]ll of us should treat impact factors and citation data with considerable caution. Basing journal rankings, tenure, promotion, and raises on uncritical acceptance of [these] data is a poor idea.”

It would be nice to have more information about the magnitude and direction of the potential bias. Do these problems affect the rank ordering of journals, or simply the precision of the point estimates? Is there any research on this problem?

3 January 2008 at 10:20 am 2 comments

Immigration and the Housing Bubble

| Steve Phelan | 

Brad De Long’s analysis of the current financial crisis published in the Taipei Times on 01/01/08 received some attention in the blogosphere yesterday. For a crisis resulting in a sustained fall in asset values, he recommends either 1) nationalizing the debt or 2) inflating the price of nominal assets. As I was reading the article (and another on the fact that an 3 million excess housing units were created in the boom above long term trends) it occurred to me that a third path might be available — increased immigration. (more…)

2 January 2008 at 2:29 pm 2 comments

Review Papers on Personnel Economics

| Peter Klein |

The economics of human resource management, or personnel economics as it’s come to be called, is surveyed in two new papers, this one by Edward Lazear and Paul Oyer for the forthcoming Handbook of Organizational Economics and this one by Lazear and my former CEA boss Kathryn Shaw for a future issue of the Journal of Economic Perspectives.

These reviews emphasize the generality of the economic approach and argue that it explains observed HR practices, such as the rising variance in pay across individuals, increased use of pay-for-performance schemes, greater reliance on teamwork, and the like better than rival theories. E.g., from Lazear and Shaw:

In the not-too-distant past, the typical textbook on human resources management would often eschew generalization, arguing that each situation is different. The economist’s approach is the opposite. Rather than thinking of each human resources event as separate and institutionally driven, economists place a premium on identifying the underlying general principles, and on using specific institutional details to identify the causal sources of the general principles.

I’m not sure all our sociologically and psychologically inclined readers will be comfortable with this generalization. Anyway, Lazear and Shaw’s conclusion, which describes the growth of the field, is worth quoting in full: (more…)

2 January 2008 at 12:23 pm 1 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).

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