Archive for December, 2009

Andrew Gelman’s Meta-Lesson

| Peter Klein |

“Microeconomics ain’t easy, and don’t let a regression — or division by a baseline — be a substitute for clear thought.” Steve Levitt is the target. Why does it take a statistics professor to remind economists of such an obvious truth?

19 December 2009 at 1:12 pm 1 comment

Robert Sugden

| Nicolai Foss |

I have become a huge fan of Robert Sugden, an economics Professor at the University of East Anglia and one of the most cited UK economists. Readers of this blog may know Sugden’s work from, for example, his excellent 1986 book, The Economics of Rights, Co-operation, and Welfare, as well as his papers on spontaneous order (e.g., here or here). Much of Sugden’s research lies in the zone of overlap between game theory (mainly experimental game theory and coordination games) and moral and political philosophy, and he is engaged in a constant dialogue with scholars in, or associated with, the classical-liberal tradition, such as Hume, Mill, and Hayek. He is the rare economist who, like Frank Knight, manages to publish in American Economic Review as well as in Ethics.

I am reading through Sugden’s recent publications and recommend the following as being of particular interest to the O&M readership:

  • Can Economics Be Founded on “Indisputable Facts of Experience”?  Lionel Robbins and the Pioneers of Neoclassical Economics” — An attack on Robbins’ Essay that may also challenge followers of praxeology.
  • Fraternity: Why the Market Need Not Be a Morally Free Zone“(with Luigino Bruni) — Drawing on the work of a contemporary of Adam Smith, Antonio Genovesi, Sugden and Bruni criticize the idea (reflected in, e.g., Williamson’s distinction between “trust as calculative risk” and “trust proper”) that one can make a distinction between market relationships and genuinely social relationships. Market relationships also have elements of joint intentions for mutual assistance.
  • The basis for the latter point can be found in “The Logic of Team Reasoning” which is a case for placing agency at the level of teams, specifically those teams that make use of team reasoning. The basic idea is that when team members reason in this way, they consider which combinations of actions will best promote the team objectives, and choose actions accordingly.
  • If the above sounds at variance with classical liberalism (which I don’t think it necessarily is), check out Sugden’s criticism of Thaler and Sunstein (here) or his various critical discussions of the notion of “opportunity” in welfare economics (Sen, Cohen, Roemer) (e.g., here) which are all in the mainstream of classical-liberal thought.

18 December 2009 at 7:09 am 1 comment

Disney Organizational Chart, circa 1943

| Peter Klein |

This week’s passing of Roy Disney has brought forth some interesting discussion of the firm founded by his uncle Walt and father Roy. Check out this Disney organizational chart from 1943 (click to enlarge), courtesy of design site @issue. Unlike the typical corporate hierarchy, writes Delphine Hirasuna, Disney’s “is based on process, from the story idea through direction to the final release of the film. All of the staff positions are in the service of supporting this work flow.” (From Cliff Kuang via WeLoveDataVis.)

17 December 2009 at 6:18 pm 3 comments

The Thoughtful President

| Peter Klein |

The President’s supporters portray him as thoughtful, well-informed, and deliberative. Unlike his predecessor, who acted on impulse, rarely considered dissenting points of view, and lived in a protective bubble, Obama reads, understands alternative perspectives, and thinks through arguments. Look how long it took him to decide on an Afghanistan policy!

And yet, on economic policy, the President is shockingly parochial. He has repeatedly challenged critics of his stimulus program to “produce a single economist” who opposes his actions. Anyone who disagrees with massive government borrowing and expenditures to “rescue” the economy is simply an obfuscationist, a partisan trying to score cheap political points at the expense of the national good. I think Obama genuinely believes this. He’s certain he’s right, so criticism bewilders him. He simply can’t fathom that there might be honest disagreement on basic economic issues. For Obama, the range of macroeconomic opinion runs from, say, Krugman to Summers. It’s like Pauline Kael’s famous line that Nixon couldn’t have won in 1972 because “no one I know voted for him.”

Of course, I’m not expecting a White House invitation for me and my friends to present Austrian business-cycle theory. But you’d think he might listen to Cochrane, Zingales, Mulligan, Becker, Glaeser, or even Mankiw.

This is our thoughtful, well-informed, deliberative Chief Executive?

17 December 2009 at 9:38 am 2 comments

I Wish I’d Written That

| Peter Klein |

Arnold Kling on PAS:

[P]rior to Samuelson’s formalization in economics, there were a lot of papers published that lacked clarity and insight. Now that formalization dominates, we also see a lot of papers that lack clarity and insight. If you compare the most insightful mathematical papers with the average non-mathematical papers, math wins. But one can also run the comparison the other way and reach the opposite conclusion.

16 December 2009 at 5:44 pm 1 comment

CFP: “Contracts, Procurement, and Public-Private Arrangements”

| Peter Klein |

It’s 14-15 June 2010 in Paris. Submissions are due 15 February. Stéphane Saussier is organizing, so you know it will be good. From the CFP:

This conference focuses on the recent developments in contract theories. Papers are invited on all topics of contract theories including:

  • relational contracting,
  • transaction costs,
  • renegotiations,
  • incentives,
  • attribution mechanisms,
  • incomplete contracting
  • contract design, etc.

Papers presented may be theoretical or applied. A special attention will be given to proposals addressing issues related to procurement and public-private arrangements.

16 December 2009 at 5:29 pm 1 comment

Peter the Great

| Lasse Lien |

Peter is having a great year, I can tell you that. First he is cited in the scientific statement for Williamson’s Nobel Prize. Recently, it also became clear that he is on Wiley’s most-read-articles list, an honor he shares with the very same Williamson. Peter’s paper tops the list for the Strategic Entrepreneurship Journal. A link to the list of top papers can be found here.

Way to go, Peter!

15 December 2009 at 3:53 pm 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).