Posts filed under ‘– Klein –’
Hoselitz Bleg
| Peter Klein |
Can anyone point me to biographical or bibliographical resources on Bert F. Hoselitz? He is known to Austrian economists as the translator (with James Dingwall) of Menger’s Principles of Economics, but he was also an accomplished Chicago development economist who founded the journal Economic Development and Cultural Change. He was trained in Vienna (according to this brief note) but did not apparently have much contact with the Austrian school. I’m particularly interested in Hoselitz’s contributions to entrepreneurship theory.
The Social Transformation of American Business Schools
| Peter Klein |
Is management a profession? Are collegiate schools of business legitimate professional schools? The answers Rakesh Khurana’s book provides to both questions are “not yet” and “maybe never.”
Thus opens Donald Stabile’s EH.Net review of Rakesh Khurana’s From Higher Aims to Hired Hands: The Social Transformation of Business Schools and the Unfulfilled Promise of Management as a Profession (Princeton, 2007). Business schools, argues Khurana, emerged in the late 19th and early 20th centuries to provide “legitimacy” to management, giving it the same professional status as medicine or law. In Khurana’s account, this project failed largely because business schools, under the influence of powerful foundations such as Carnegie, Rockefeller, and Ford, promoted a curriculum focused on quantitative methods rather than the softer elements of ethics and social responsibility. (The main culprit: economics, or at least a 1970s-era Chicago school caricature of economics, as we’ve seen many times before.)
For additional commentary and discussion see Jim Heskett’s HBS Working Knowledge piece and this article from Business Week.
Old JITE Symposia Now Online
| Peter Klein |
Old issues of the Journal of Institutional and Theoretical Economics (JITE) — by “old” I mean issues from the 1980s and 1990s, not the really old ones from the 19th century, when it was called Zeitschrift fuer die gesamte Staatswissenschaft — are finally online courtesy of the German site DigiZeitschrifte. Access is limited to members of subscribing universities (which, unfortunately, doesn’t include my own) but some of you, particularly in Europe, may be in luck. (If anyone knows other distribution channels please let me know.)
In 1986 editors Rudolf Richter and Eirik Furubotn began devoting each volume’s first issue to a symposium on the New Institutional Economics (the tradition continues today). There are terrific issues from the late 1980s and early 1990s with articles, comments, and replies by Williamson, North, Coase, Alchian, Demsetz, Tullock, Manne, Libecap, Masten, Frey, Teece, Goldberg, Alston, Wallis and many other NIE luminaries. Even T. W. Hutchison makes a couple of appearances. And don’t miss the classic Posner-Coase-Williamson exchange from 1993 (1, 2, 3, 4).
Those of us without online access might try that building — what is it called? — oh, yes, the “library.”
The Organizational Implications of Creativity
| Peter Klein |
This paper, forthcoming in Organization Studies, asks how entrepreneurs can structure firms to encourage employee creativity and discovery while discouraging unproductive rent-seeking. The former requires delegation and the latter requires close monitoring and control; managing these trade-offs is a key to successful entrepreneurial performance.
In “The Organizational Implications of Creativity,” Richard Gil and Pablo Spiller examine a similar trade-off: the choice between internal and external procurement of creative activities. The nature of these activities makes them difficult to manage internally, but buying creative content on the market subjects the buyer to the winner’s curse. Here’s the abstract:
We develop a basic framework to understand the organization of highly creative activities. Management faces a fundamental tradeoff in organizing such activities. On the one hand, since creativity cannot be achieved by command and control or by monetary incentives, internal/contractual production of creative products is plagued by hazards arising from their fundamental characteristics: extremely high input, output and market uncertainty, and the inherent informational advantages of creative talent. Procuring highly creative products in the market place, though, exposes the distributor to a fundamental risk: independently produced creative goods are generic distribution-wise. Thus, in procuring creative products in the marketplace, distributors face the unavoidable winner’s curse risk. Since this risk is, to a large extent, independent of the creative nature of the product, the higher the creative content, the higher the relative hazards associated with internal or contractual production. Thus, internal/contractual production of creative goods will tend to be less prevalent the higher the creative content associated with its production. We apply this insight to the evolution of the U.S. film industry in the mid-XXth century. We exploit two simultaneous natural experiments — the diffusion of TV and the Paramount antitrust decision forcing the separation of exhibitors from distributors and prohibiting the use of block-booking. Both events increased the demand for creative content in movies. We develop empirical implications which we test by analyzing in detail the decision by distributors to produce films internally or to procure then in the market place, in the face of an increase in the demand for creative content.
The Curious Case of Hans Werner Gottinger
| Peter Klein |
From Joshua Gans I learn that Research Policy has officially retracted a 1993 article by Hans Werner Gottinger which copies substantial passages from a 1980 article published in the Journal of Business. A lengthy editorial in the September 2007 issue of Research Policy explains the case. Apparently Gottinger is a serial plagiarist who has regularly copied material from previously published papers, without acknowledgement, and has falsified his CV by listing positions and affiliations with universities and institutes that never existed or never employed him. This article in Nature provides details (the Research Policy editorial will be gated for some readers).
The entire incident is very sad, and suggests that academic dishonesty may be much more common than is usually thought. One low-cost suggestion for improvement: publishers should check key words and phrases from every paper — or even the entire text — against the archives from Google Scholar, JSTOR, Google Books, and other full-text databases of academic publications. That won’t catch everything, but will likely catch at least some cases. Surely the Google cache has made life harder for plagiarists. (Students, beware!)
Hayek and Entrepreneurship
| Peter Klein |
At the Kauffman data symposium participants were given little notebooks with the Kauffman logo and a quote from Hayek — “Society’s course will be changed only by a change in ideas” — on the cover. It’s a nice line and certainly in the spirit of Hayek’s views on social change as expressed in The Road to Serfdom, “The Intellectuals and Socialism,” and other works, though the exact quotation does not seem to appear in Hayek’s writings. (The line is attributed to Hayek by John Blundell, recounting a conversation between Hayek and IEA founder Antony Fisher. In “The Rediscovery of Freedom,” written in 1983, Hayek puts it this way: “A young English pilot who had returned from the war and had made a great deal of money in a few years as an entrepreneur came to me [around 1947] and asked me what he could do to thwart the ominous growth of socialism. I had considerable trouble persuading him that mass propaganda was futile and that the task consisted rather of convincing intellectuals.”)
The Kauffman Foundation focuses on entrepreneurship, not opposition to socialism, so I started thinking about the influence of Hayek on entrepreneurship research. Kirzner’s theory of entrepreneurial discovery builds directly on Hayek’s notion of an economy characterized by dispersed, tacit knowledge, an economy in which “competition” is a process of coordination and equilibration, rather than a set of conditions (as in Walrasian competitive general equilibrium). However, Hayek did not develop a theory of the entrepreneur per se. (more…)
I’m Not Narcissistic, Just Really Important
| Peter Klein |
If you have the kind of sophisticated sense of humor I have, you enjoy Bud Light’s “Real Men of Genius” series. Yesterday I heard the salute to “Mr. Stadium Scoreboard Marriage Proposal Guy”:
You’ve combined the three things you love most in the this world:
Your girlfriend, your team, and lots and lots of attention.
I thought of that when reading Arijit Chatterjee and Donald Hambrick’s recent ASQ paper, “It’s All About Me: Narcissistic CEOs and Their Effects on Company Strategy and Performance” (working-paper version here).
This study uses unobtrusive measures of the narcissism of chief executive officers (CEOs) — the prominence of the CEO’s photograph in annual reports, the CEO’s prominence in press releases, the CEO’s use of first-person singular pronouns in interviews, and compensation relative to the second-highest-paid firm executive — to examine the effect of CEO narcissism on a firm’s strategy and performance. Results of an empirical study of 11 CEOs in the computer hardware and software industries in 1992-2004 show that narcissism in CEOs is positively related to strategic dynamism and grandiosity, as well as the number and size of acquisitions, and it engenders extreme and fluctuating organizational performance. The results suggest that narcissistic CEOs favor bold actions that attract attention, resulting in big wins or big losses, but that, in these industries, their firm’s performance is generally no better or worse than firms with non-narcissistic CEOs.
Remember, there’s no “I” in “team” — but if you look closely, you’ll find a “me.”
Qualitative Comparative Analysis
| Peter Klein |
I learned about Qualitative Comparative Analysis (QCA) from Peer Fiss at last month’s Sundance conference on comparative organizations. QCA is a kind of cluster analysis that is said by its proponents to be superior to linear regression for identifying causal relationships among variables in small samples. Kogut, MacDuffie, and Ragin (2004) and Fiss (2007) apply QCA to organizational problems. If you’re interested in learning more you might drop by the EGOS Colloquium in Amsterdam next July for a special session on QCA and similar methods, “Comparing Organizations: New Approaches to Using Case Study, Small-N, and Set-Theoretical Methods.”
NB: I was reminded of the Sundance conference, and the relations between economists and sociologists, when I had dinner with a prominent labor economist at last weekend’s Kauffman symposium on entrepreneurship data. He said he was tired of labor economics meetings — “all anyone talks about is identification, identification, identification” — and was thinking about attending the Academy of Management conference to broaden his perspective. I responded that after a few days at the AoM he might be dying for someone to mention identification!
Waldfogel’s “Tyranny of the Market”
| Peter Klein |
Joel Waldfogel visited our campus last week to discuss his new book, The Tyranny of the Market. I wasn’t sure what to expect. Joel is a creative and original thinker, a careful empiricist, and a nice guy. He’s one of the small (but growing) number of accomplished economists (Steve Levitt, Austin Goolsbee, Greg Mankiw, Brad DeLong, Steve Landsburg, etc.) who take the time to write for a general audience, a particularly meritorious activity. On the other hand, while I haven’t read Joel’s book, I was underwhelmed by this summary in Slate, as was most of the econo-blogosphere (1, 2, 3, 4).
After hearing Joel’s presentation and discussing it with him afterwards I’m more sympathetic to his case, but only slightly. His basic argument is simple: Under increasing returns, if the number of potential users of a particular good or service is sufficiently small, and the fixed costs are sufficiently large, then the good or service will not be produced even though there exist users whose willingness to pay exceeds the marginal cost of production. This Joel characterizes as a market failure, a challenge to the view that market provision, unlike government provision, allows everyone to have his preferences satisfied. If the state provides one color of tie, selected by majority vote, then I may be stuck with a red tie even when I prefer blue, while under market competition we all get the color we want. Not so, says Joel; if only a few of us prefer blue and the fixed costs are high enough then blue won’t be offered for sale. (more…)
Kauffman Symposium on Entrepreneurship Data
| Peter Klein |
I head to Kansas City today for the Kauffman symposium on entrepreneurship and innovation data, where Mike Sykuta and I will give a presentation on the CORI contracts library. Descriptions of all the data sets to be presented are available at SSRN.
I’m curious to see how the participants will address the issues of measurement and definition that are particularly thorny in entrepreneurship research.
Funny Things Scientific Researchers Do
| Peter Klein |
- Find oldest living animal, then kill it (via Gary Peters).
- Discover a primitive civilization in the US Midwest.
- Use game theory to analyze the toilet-seat problem.
Halloween Movies for Middle Managers
| Peter Klein |
The Saw movies, writes Grady Hendrix in Slate, are perfect for middle managers. Typical slasher flicks are “id-tickling celebrations of the chaos that ensues when mindlessly violent monsters are unleashed in controlled environments like summer camps, schools, hospitals, and space stations. ” By contrast, Jigsaw — the protagonist-villian of the Saw films — is
a pedant and a bore, a Type A overachiever who is constantly creating “tests” for the other characters and then grading the results. Chaos is his enemy; order and personal productivity are his friends. He’s a management drone leading the cast in a team-building exercise. . . . In Saw III he uses liquefied pigs, death by car wash, and a tricked-out version of the rack to awaken a grieving father to the magic of forgiveness. It’s the liberating figure of the motion picture monster reduced to the status of a self-help guru. And he won’t shut up. “Despite all of the advantages and privileges that you were given at birth, you have returned to prison again and again,” he scolds one of his victims. “Up until now, you have spent your life among the dead, piecing together their final moments. You’re good at this because you are also dead. Dead on the inside,” he preaches at another. It’s like an endless lecture from your mom.
The Saw movies don’t just celebrate traps; they are traps: Fans are lured in with the promise of gore, but they find themselves stuck in their seats, subjected to Jigsaw’s endless stream of numbing pseudo-profundities.
An “endless stream of numbing pseudo-profundities”? Hmmm, sounds like some of the academic journals I read.
Maybe Taylorism Will Come Back
| Peter Klein |
The human race will one day split into two separate species, an attractive, intelligent ruling elite and an underclass of dim-witted, ugly goblin-like creatures, according to a top scientist.
It doesn’t happen for 100,000 years, so today’s management consultants are safe. Of course, my headline refers to the popular conception of “Taylorism,” not actual Taylorism. (HT: Uncommon Descent)
O&M on Facebook
| Peter Klein |
I have an account on Facebook, but I don’t really know what to do with it. (All the cool kids use it, so I figured what the heck.) Anyway, for those of you serious Facebook users, we’ve created a Facebook group for O&M. Besides the usual social-networking features the page has Discussion Board capabilities so you can raise and discuss issues of interest without waiting for an appropriate post to appear here on the blog. Enjoy!
. . . And If You Can’t Teach, Teach Gym
| Peter Klein |
You know the old adage: If you can, do; if you can’t, teach. Is it true for business?
A paper in the August 2007 Academy of Management Perspectives, “Do Business School Professors Make Good Executive Managers?” by Bin Jiang and Patrick Murphy (full text; abstract; press release), identifies 217 firms with former business-school professors in management positions and finds that these firms have higher revenues-per-employee than a control group matched by industry, location, and firm size. Faculty making early exits from their academic careers appear to be the most valuable, while neither academic area nor business-school ranking seem to matter. Conclusion:
Executive managers learn from past experiences when they draw the right lessons from those experiences. But experience alone is not enough. Given the rigorous training professors receive in order to design research that objectively parses error and data, one final supposition is that they may be particularly competent at delineating patterns in complex management and organizational experiences. They may also be especially capable of continually developing innovative questions that lead to information useful for executive decision-making amidst uncertainty.
I enjoyed reading the paper. Certainly I like to think that I’d command a high salary if I chose to give up my cushy professor lifestyle for the real world. However, I don’t find the empirical analysis convincing. Here’s why: (more…)
Insert Your Own Punch Line Here
| Peter Klein |
Brian McCann describes recent experimental work on the ultimatum game:
Unlike humans, who have a tendency to make generous offers when they are the first player and to reject non-generous offers when they are the second players, chimpanzees exhibit the type of rational, profit-maximizing behavior economists would expect.
J-PAL Update
| Peter Klein |
We reported earlier on MIT’s Poverty Action Lab (J-PAL), a research and policy center that advocates using randomized controlled trials instead of traditional econometric methods to evaluate the effects of various programs. J-PAL is featured in this week’s issue of Nature, an unusual recognition for social-science research. (HT: 3quarks)
Why the Resistance to Prices?
| Peter Klein |
When the quantity demanded exceeds the quantity supplied — causing shortages, delays, congestion, misallocation — the solution is to raise the price. Every freshman economics student knows this. Why, then, are regulators, industry groups, and consumer representatives so often opposed to rationing by the price mechanism? Is it simply Bryan Caplan’s anti-market bias? Is it interest-group politics? Or is there something specific people don’t like, or don’t understand, about prices?
Two examples: (1) Airline landing slots. I worked on this problem with Dorothy Robyn back at the CEA in 2000. The US FAA prices airport landing slots, and access to the air traffic control system, on a per-passenger basis, regardless of time of day, season, overall stress on the system, and so on. In other words, the price charged has no relation to the marginal cost of provision. The obvious solution is some kind of congestion pricing mechanism. But the major players are generally opposed. Mike Giberson provides details on the latest attempt to use prices to reduce air-travel delays. Time-of-day pricing? “We are unalterably, adamantly opposed to it,” says the head of the Air Transport Association, the airlines’ lobby group. (more…)
Reflections on the McQuinn Entrepreneurship Conference
| Peter Klein |
Last week’s McQuinn Center conference on entrepreneurship in Kansas City was a great success, with some 75 participants from places like Nepal, Norway, the UK, and Peru as well as the US and Canada. Keynoters Cornelia Flora, Pierre Desrochers, Sandy Kemper, and Randy Westgren challenged and inspired the group and the papers and discussions highlighted a variety of innovative entrepreneurship research topics, theories, and methods. Papers and presentations are now available on the conference website.
I had the pleasure of offering introductory and closing remarks, and I’ll share here some reflections about the state of the field and suggestions for moving forward. (more…)
Tribute to Bob Higgs
| Peter Klein |
It was a great pleasure watching Robert Higgs accept the 2007 Schlarbaum Award for Lifetime Defense of Liberty at the Mises Institutes’s 25th Anniversary Celebration in New York. Bob is an outstanding scholar whose 1987 book, Crisis and Leviathan, should be required reading for Naomi Klein. He is a fierce defender of political and economic freedom, private property, and the rule of law. Bob also edits the Independent Review, a terrific interdisciplinary journal that values clear exposition as well as academic rigor (a rare combination, these days).
Earlier this year a group of Bob’s friends, colleagues, and former students produced a Festschrift volume, Government and the American Economy: A New History, in his honor. Contributors include Price Fishback (the editor), Gary Libecap, Stanley Engerman, Robert McGuire, Richard Sylla, John Wallis, Jeff Hummel, Robert Margo, Mark Guglielmo, Werner Troesken, Sumner La Croix, Randal Rucker, E. C. Pasour, Jr., Lee Alston, and Joseph Ferrie. The result is “a series of stimulating cameos by a distinguished assemblage of economic historians,” writes reviewer Gavin Wright (himself a distinguished economic historian). Check it out!
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