Author Archive
O&M for the High-Time-Preference Reader
| Peter Klein |
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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…)
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.
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?
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…)
Most Popular Posts of 2007
| Peter Klein |
Our most popular posts of 2007:
- Physics Envy and All That
- Design Puzzles
- Contronymns
- Taxes al Carbon
- The University of Phoenix and the Economic Organization of Higher Education
- How Does Management Affect Capabilities?
- Market-Based Management
- Agency Theory in Management
- Has Corporate Corruption Increased?
- The SWOT Model May Be Wrong
- Management Journal Impact Factors 2005
- PhD Candidate Shortage in Accounting
- Things You Shouldn’t Say at Your Dissertation Defense
- Do We Need a Project Project?
- The Legacy of Max Weber
- The Language of Economists (and Sociologists)
- Accounting: A Brief History
- Is Entrepreneurship a Factor of Production?
- The Galileo Legend
- The New Bashing of Economics: The Case of Management Theory
What makes a popular post? The main determinant seems to be an incoming link from a high-traffic site; items 1-4, 6, and 13-15 above were all linked from sites like Instapundit, the Dynamist Blog, Greg Mankiw, and Marginal Revolution. Items 5, 9, 12, and 17 come up often in search -engine results. My guess that items 7, 8, 10, 16, 18, and 20 were the most popular among our regular readers.
Sociology Quote of the Day
| Peter Klein |
Jeremy Freese, trolling the comment threads at our good twin site:
As for sociology, it’s been more a cloud/confederacy than a discipline for more than 30 years anyway, bound together by a determined resolution to ignore the wild number of pairwise combinations of self-described sociologists who have nothing whatsoever in common intellectually except leftward politics.
Now, you can bet that if I’d written that I’d be hearing from the boys over at orgtheory.
Starbucks Is Good for Mom and Pop
| Peter Klein |
The WSJ ran a piece a few years back showing that independently owned coffeehouses do better after Starbucks moved to town. Taylor Clark (of Starbucked fame) provides similar figures in today’s Slate:
In its predatory store placement strategy, Starbucks has been about as lethal a killer as a fluffy bunny rabbit. . . . According to recent figures from the Specialty Coffee Association of America, 57 percent of the nation’s coffeehouses are still mom and pops. Just over the five-year period from 2000 to 2005 — long after Starbucks supposedly obliterated indie cafes — the number of mom and pops grew 40 percent, from 9,800 to nearly 14,000 coffeehouses. (Starbucks, I might add, tripled in size over that same time period. Good times all around.)
The theory is that Starbucks’s rapid growth (maybe not this rapid) has boosted the demand among US consumers for premium coffee, a demand that Starbucks alone cannot satisfy. Three cheers for positive spillovers! (Greg Mankiw, how about Pigouvian subsidies for poor old Howard Schultz?)
Markets in Everything, Gift Card Edition
| Peter Klein |
A new secondary market for gift cards, those ubiquitous plastic goodies that so many of us found in our Christmas stockings this year (via WWD). Lisa Fairfax provides more examples and some discussion. And don’t miss Jennifer Offenberg’s work.
New Videos: Roth, Tirole
| Peter Klein |
Boston University has put the last two Rosenthal Memorial Lectures online. Here’s Alvin Roth on “What Have We Learned From Market Design” (no, it’s not supposed to be self-contradictory) and Jean Tirole on “Economic Incentives, Self Motivation, and Social Pressure.” (HT: Marshall Jevons)
Open Source and Spontaneous Order
| Peter Klein |
Open-source software is often cited as an example of what Hayek termed spontaneous order, the organic, bottom-up, decentralized form of organization that characterizes the market system. Giampaolo Garzarelli, in an explicitly Hayekian analyis, says open-source projects are defined by “no hierarchy, self-organization, self-regulation, and no ownership structure.” Is this an accurate characterization?
Commercial law, manifest in the medieval law merchant or lex mercatoria, is another important example of spontaneous order in the literature (see Harold Berman and Bruce Benson). Fabrizio Marrella and Christopher Yoo use the law merchant as a benchmark, asking “Is Open Source Software the New Lex Mercatoria?”They think not, arguing that focal firms, individuals, and groups play a more important role in guiding the evolution of open-source projects than is usually recognized. As a result, “[o]pen source has not achieved the type of universality or uniformity of principles envisioned by proponents of the lex mercatoria.” (more…)
New Papers on the Economic Analysis of Religion
| Peter Klein |
The economic analysis of religion is a rapidly growing area of applied microeconomics. To some, it represents creative and clever applications of economic theory to social, cultural, and institutional phenomena. Others see it as a crude form of economic imperialism. Only economists could take the spirit out of spirituality!
The October 2007 issue of the American Journal of Economics and Sociology contains some examples of this genre:
John H. Beck, “The Pelagian Controversy: An Economic Analysis.” The present study analyzes the decision of church authorities in the early fifth century to reject the doctrine advanced by Pelagius in favor of the position taken by Augustine. Accounts of the controversy reveal two self-interested motives for the church hierarchy to reject the Pelagian doctrine: (1) the Pelagian view would have undermined the authority of the church hierarchy; and (2) by making greater demands for moral conduct, it would have raised the “cost” of being a Christian and thereby discouraged growth in church membership, particularly among the Roman upper class. (more…)
Christmas Classics
| Peter Klein |
It’s that magical season, time to enjoy your favorite Christmas classics — not The Night Before Christmas or It’s a Wonderful Life, but “In Defense of Scrooge” and “Economics of Santa’s Workshop” by Michael Levin from the old Free Market newsletter. Steve Landsburg’s 2004 piece on Scrooge is not as penetrating as Levin’s, but who can disagree with his conclusion: “Its taxes, not misers, that need reforming.”
Warmest holiday wishes to you and yours from the O&M crew!
Performance-Enhancing Drugs and Competitive Advantage
| Peter Klein |
Once again, performance-enhancing drugs are in the news. In a highly competitive environment some people will do anything to gain an advantage, despite the potential long-term health risks. How widespread is the problem, and what should be done about it?
No, not baseball. I’m taking about professors popping “smart pills” to improve their cognitive performance. Two Cambridge researchers report in Nature that colleagues studying brain disorders are themselves using drugs like Modafinil “to counteract the effects of jetlag, to enhance productivity or mental energy, or to deal with demanding and important intellectual challenge.”
Is this acceptable? “Should the life of the mind be chemically enhanced,” asks the Chronicle, “when, say, a professor needs to crank out a tenure-worthy paper?” Many of us consume massive quantities of caffeine already; perhaps Modafinil isn’t really all that different. Others see the practice akin to Ritalin abuse by college students. “It smells to me a lot like taking steroids for physical prowess,” says one critic.
My questions: If we discover that particular scholars are using these substances, should we put asterisks by their publications in reference lists? Should we deny them places in the academic Hall of Fame?
Adam Smith: Proto-Austrian?
| Peter Klein |
Austrian economists have mixed views on Adam Smith and classical economics. Mises and Hayek admired Smith as a social theorist and system builder while rejecting much of his technical apparatus, especially the labor theory of value. Menger taught Smithian political economy to his most famous pupil, Crown Prince Rudolf. Rothbard considered Smith grossly overrated. More generally, Austrian economists have tended to distance themselves as much from the classical system as from its neoclassical descendant. (Kirzner’s review of George Reisman’s Capitalism, which tries to synthesize Austrian and Ricardian economics, is worth reading in this regard.)
A new paper by Michael Bradley argues that the distinction between classical and Austrian analysis is overdrawn, at least with regard to competition theory. (more…)
Economists on Economics
| Peter Klein |
We’ve blogged on some of these papers already (1, 2), but it’s worth mentioning that the April 2007 issue of the American Journal of Economics and Sociology includes a symposium called “Reflections and Self-Reflections on the Economics Profession”:
- “Economists’ Opinions of Economists’ Work” by William L. Davis
- “The Input Relationship Between Co-Authors in Economics: A Production Function Approach” by Marshall H. Medoff
- “Is There a Free-Market Economist in the House? The Policy Views of American Economic Association Members” by Daniel B. Klein and Charlotta Stern
- “What Do Economists Talk About? A Linguistic Analysis of Published Writing in Economic Journals” by Nils Goldschmidt and Benedikt Szmrecsanyi
Good reading for the narcissistic economist (is there another kind?).
O&M Classic: Grading Essay Exams
| Peter Klein |
This classic post from last year deserves another go.
Economic Advisers to Presidential Candidates
| Peter Klein |
Last week’s Freakonomics column in the NY Times asked “What Does A Presidential Candidate’s Economic Adviser Actually Do?” McCain adviser Douglas Holtz-Eakin gives the best (facetious) response: “The first thing that the economics adviser brings to any campaign staff is a hip coolness and bling.” The serious answers are interesting too.
Several high-profile academic economists are involved with the 2008 campaign: Greg Mankiw and Glenn Hubbard are advising Romney, Micheal Boskin works for Giuliani, and Austan Goolsbee is helping Obama. Maverick Republican Ron Paul hasn’t announced any official economic advisers — “my advisers [are] Mises and Hayek and Sennholz,” he told Business Week — but this list of academic supporters includes some distinguished economists (scroll down to the Ks).
Open-Source Chinese Food
| Peter Klein |
“And bring me a side of Mozilla.”
Mark Liberman explains how this likely happened. My advice: check the “history” tab before ordering. (HT: NameWire)
Opera and Mandated Standards
| Peter Klein |
More on Opera and Microsoft. Besides demanding that Internet Explorer be unbundled from Windows, Opera wants the European Commission “to require Microsoft to follow fundamental and open Web standards accepted by the Web-authoring communities.” But what standards? Determined how, and by whom? “[S]peaking as a web developer,” writes Mike Gunderloy on WebWorkerDaily, “I do not believe that I want the courts stepping in to determine what standards must be implemented in shipping products.” He notes:
- It’s not at all clear just what are the “fundamental and open Web standards.” Some sites are already experimenting with HTML5 and CSS3, even though the standards are in flux and not thoroughly implemented. Are these fundamental yet? Are things like MathML fundamental? Who decides?
- No browser is perfect. Depending on how closely your read the standards and interpret them, you can always find a test to break any given browser. Will some other vendor turn around and demand that Opera be pulled until it fixes its own rendering bugs? If the end result is that only perfect browsers can be shipped, we will have no browser at all.
- Once they get involved, why would the courts stop at regulating browsers? Imagine a takedown order aimed at a site you just deployed because it won’t validate. There are people out there determined to make the Internet a better place by forcing us all to be less sloppy. I’m not sure I want them to end up in control.
As the critics of Microsoft’s critics have frequently pointed out, asking the courts to determine optimum technical standards makes no sense — and neither does asking the courts to determine the optimum bundle (“you can buy a suit coat and a pair of suit pants, but not a suit”), the optimum set of vertical contractual restraints (“software licenses are OK, per-processor licenses aren’t”), and so on. Why can’t we let the market decide?
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