Posts filed under ‘– Foss –’
What Are Hybrid Forms and How Can They Be Modeled?
| Nicolai Foss |
Many scholars have argued that hierarchies are increasingly infused by market mechanisms (e.g., here and here), and that elements of authority can increasingly be witnessed in market transactions. This has been referred to as the “swollen middle hypothesis.” A major step forward in the understanding of such hybrid governance is Williamson’s seminal 1991 paper in the ASQ, “Comparative Economic Organization: The Analysis of Discrete Structural Alternatives,” and Holmström and Milgrom’s equally important 1994 paper in the AER, “The Firm as an Incentive System.” (more…)
Mises and Mises (and Knight and Hoppe) on Probability
| Nicolai Foss |
O&M has featured a number of posts on uncertainty as a phenomenon that, in some sense, goes beyond risk. Contributors to these kind of discussions often delight in employing notions such as “Knightian uncertainty,” “genuine, real, true . . . uncertainty,” “the unlistability problem,” “surprise functions,” etc., and they debate whether so-called Knightian uncertainty really is inconsistent with a Bayesian perspective, whether Shackle’s notion of uncertainty is in some sense deeper than Knight’s, etc.
Much of the debate is, if perhaps not a quagmire, then certainly an area where conceptual clarification and some serious formal work would seem to be much needed (with respect to the latter, see this). Conceptual clarification may occasionally involve going back to important figures in the debates and consider what they (really) said. (more…)
Innovation Without Patents
| Nicolai Foss |
While public policy-makers (and students) exalt patents, scholars in strategic management and innovation studies tend to take a much more balanced view. They know that the use of patents tend to concentrate in relatively few industries, and that in many cases alternative mechanisms are superior means of appropriating rent streams from innovations (e.g., this paper). Of course, libertarians, including libertarian economists, have long harbored skepticism towards the patent system, including skepticism based on efficiency arguments. Now economic historians seem to add to patenting skepticism. (more…)
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…)
Why Are Sociologists So Silent on Property Rights?
| Nicolai Foss |
I just finished reading Bruce Carruthers and Laura Ariovich’s “The Sociology of Property Rights,” published in The Annual Review of Sociology (2004) (no, Brayden, O&M is not the anti-sociology blog). This is a nice piece, but it is debatable how much of it is sociology per se. In actuality, most of the paper, which given the journal (research annual) that it is published one would expect to survey sociology contributions, turns out to be a survey of — economics. Specifically, the contributions of Coase, Demsetz, Barzel, and even Moore and Hart are highlighted and summarized. The authors themselves acknowledge that sociology “neglects” property rights. Others have made similar observations (e.g., Richard Swedberg).
This neglect of property rights is bizarre; after all, property rights, in a sort of proto-Hartian understanding, were central in Marx’ thought. Durkheim and Veblen also didn’t neglect property rights. Intuitively, one would think of property rights as a preeminent sociological theme, as it involves power, social stratification, inequality, and other sociology favorites. So, what accounts for the neglect?
Hayek Orchid Bleg
| Nicolai Foss |
Want to impress that free-market girlfriend (or potential girlfriend) of yours? Buy a Paphiopedilum Friedrich von Hayek!
Who knows the story behind this? Hayek’s father was a Professor of Botany. Might he have named an orchid after his son? Or was it named by a later Hayek-admiring botanist? Or, are we talking about an altogether different Hayek (not likely)?
John Nash on YouTube
| Nicolai Foss |
Somewhat to my surprise I found clips with John Nash on YouTube. And I don’t mean trailers for A Beautiful Mind (but here it is), but the genuine article. Here and here he is.
Introducing Guest Blogger David Hoopes
| Nicolai Foss |
Peter and I are very pleased to welcome David Hoopes as our newest guest blogger. David is an Associate Professor in the Management Department at the California State University-Dominguez Hills. He received his PhD in strategy and organization from the UCLA in 1996. He has done excellent work with former O&M guest blogger Steven Postrel (e.g., this paper), and edited (with Tammy Madsen and Gordon Walker) one of the best special issues ever of the SMJ, the 2003 one on “Why Is There a Resource-based View: Toward a Theory of Competitive Heterogeneity.” David’s research centers on capability-based sustainable advantage, management of technology and product development, and the relation between knowledge sharing and organization. He has been a frequent participant in various O&M threads and we are very pleased to add him to the line-up.
Thank You, Steve
| Nicolai Foss |
Steve Postrel has served for more than half a year as O&M guest blogger, our longest-serving GB so far. Peter and I have been extremely happy for Steve’s long tenure here, for he has contributed some of the most profound posts on O&M. Not surprisingly, these posts have also been among the most popular O&M posts. Peter and I coined the internal notion of the “Postrel Effect” to refer to the surge of O&M views that has always followed a Postrel post. Luckily, Steve has promised to frequently visit O&M and comment, so perhaps this way we may still benefit from the Postrel Effect. Thanks, Steve, for your excellent work here!!
More on Eship and Transaction Costs
| Nicolai Foss |
As indicated here, I believe that transaction costs are key antecedents to opportunity discovery, that is, the exercise of entrepreneurship. The costs of establishing property rights to new discoveries, and the costs of combining and recombining resources, all transaction costs, influence which discoveries will be made. Here (or here) is an entirely different way of relating transaction costs and entrepreneurship, namely Steven Michael’s “Transaction Cost Entrepreneurship” which focus on transacting problems in the entrepreneur/consumer (user) interface. A fine piece that is highly recommended. Here is the abstract:
When offering a novel product, the entrepreneur desires the customer to choose to “buy” (from the entrepreneur) rather than to “make.” Transaction cost economics provides guidance to firms considering a make-versus-buy decision. In this paper we extend transaction cost economics to examine the novel transactions proposed by the entrepreneur. Application of the theory identifies three crucial considerations for the transaction: the cost of quality measurement, the risk of overconfidence by the entrepreneur (here termed identity risk), and the required cost of necessary transaction specific assets. By extending transaction cost analysis to cover novel transactions across customers, entrepreneurship can be analyzed using established theories and measures to generate novel propositions.
JC Spender Wonders …
| Nicolai Foss |
He mails this: “Why did Ted Schultz, a Nobel winner, in his 1961 Presidential Address to the American Economic Association, “Investment in Human Capital,” not reference any of Solow’s work — for which, after all he too was awarded the Nobel?” A very good question!
“What Does Austrian Economics Predict?”
| Nicolai Foss |
At the professional development workshop on “The Austrian School of Economics: Applications to Organization, Strategy and Entrepreneurship,” arranged by my co-blogger for this year’s Academy of Management Meetings, the first question raised from the audience after the presentations was the one in the heading to this post. (Fabio at orgtheory.net has also made related, ehhh, provocations, which we will deal with later here at O&M).
It wasn’t entirely clear what the person who asked the question meant, the acoustics in the room were terrible (he had to repeat the question twice), and I am sure that complex issues like the symmetry thesis were popping up in the minds of my co-panelists, so there was some hesitation in the panel to address the question. (Afterwards I learned that unfortunately this was taken by some audience members as an implicit admission that AE isn’t predictive).
The question was unclear because it could mean any of this: (more…)
Teaching Game Theory
| Nicolai Foss |
Game theory is fun to teach because the real world applications, exemplifations, etc. are legion, and the theory so often does more than merely redescribe the situation, but actually brings new insight. If, however, you are out of good examples, you may want to check out Game Theory.net’s list of game theory in film, music and fiction.
The Anti-Blog
| Nicolai Foss |
One consequence of the expansion of the blogosphere is, in accordance with the basic Hegelian scheme, the emergence of the anti-blog. Here is the Anti-Becker-Posner-blog dedicated to smashing, well, you guessed it (and here is an alternative conception of what an anti-blog entails).
O&M has been accused of doing “right-wing craponomics,” Peter’s economics has been attacked by Sraffian Robert Viennau, and my comments about pomo and sociologists have often provoked angry reactions. I wonder when the Anti-O&M-Blog will appear? (Hmm, perhaps we shouldn’t play with fire; remember the Corsair Affair involving Søren Kierkegaard? (Tyler will know what I mean)).
Thoughts on Capabilities From the Interesting Sutton
| Nicolai Foss |
We have spent too much time on this blog discussing Bob Sutton. A much more interesting Sutton is John Sutton, the Sir John Hicks Professor of Economics as the London School of Economics. Sutton is the author of numerous papers and books (e.g., the highly influential Sunk Costs and Market Structure). He has had some influence on strategic management thinking, mainly (obviously) among those who base strategic management on industrial economics. (more…)
Pomo Periscope XIII: The Theology of Relativism
| Nicolai Foss |
OK, time to revitalize our successful Pomo Periscope series (seriously, the PP posts are among the most read O&M posts). I am reading Roger Scruton’s recent brilliant A Political Philosophy: Arguments for Conservatism at the moment. The book is an extremely articulate expression of true Burkean conservatism, and very far indeed from both neoconservatism and libertarianism. Anyway, these days Scruton seems unable to write anything without lashing out at pomo. Luckily, because what he says is correct and it must be said. (more…)
Does Management Research Need to Become More Empirical?
| Nicolai Foss |
Or, to put it more precisely, does management research (i.e., the journals) need to become more empirical in the specific sense of allowing for research that is pre-theoretic, but addresses an issue of relevance or detects a pattern to organizational stakeholders, that is, identifies a potentially important stylized fact? (more…)
David Laidler
| Nicolai Foss |
I have been shocked to realize that the young modern macro-economists I’m acquainted with have no knowledge of the work of David Laidler. There was a time when Laidler was seen as primary spokesman for monetarism, as one of the world’s pre-eminent monetary theorists, and as an eminent historian of monetary thought. Laidler was one of my early influences; in particular, I remember being impressed by his excellent 1981 Economic Journal article, “Monetarism: an Interpretation and an Assessment.” Anyway, Laidler (b. 1938) is still very active, and his work is very much worth looking at if you entertain an interest in the theory and history of money, and the doctrinal history of monetary theory. Here is Laidler’s homepage at the University of Western Ontario. And here is the Wiki.
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