Posts filed under ‘– Klein –’
Another African Entrepreneurship Blog
| Peter Klein |
I’ve previously recommended Timbuktu Chronicles for informed commentary on entrepreneurship and economic development in Africa. Here is another site, Diary of an African Entrepreneur, by an anonymous (you guessed it) African entrepreneur. (HT: PSD Blog)
Introducing Guest Blogger Steven Postrel
| Peter Klein |
It takes at least two people to fill Nicolai’s shoes, so Steven Postrel will be joining Cliff and myself while Nicolai’s on holiday this month. Steve is an economist who studies business strategy and organizations at SMU’s Cox School of Business. He has also worked at UCLA, UC-Irvine, and Northwestern. His research focuses on two areas: first, the fundamental meaning and sources of competitive advantage, and second, the mechanisms by which management choices affect firm capabilities, with a particular interest in the costs and benefits of knowledge specialization in different contexts. Welcome, Steve!
Personal Data Assistant for Luddites
| Peter Klein |
Nicolai and Mario, this is for you: the Hipster PDA. (HT: Web Worker Daily)
AEA Papers on Organizations
| Peter Klein |
A selection of papers on firms, contracts, organizations, and institutions from this weekend’s American Economic Association meeting in Chicago.
Incomplete Contracts and Ownership: Some New Thoughts
Hart, Oliver (Harvard University)
Moore, John Hardman (University of Edinburgh)
Diversity of Governance Governance-Organization Architecture Linkage: Complementarities and Human Assets Essentiality
Aoki, Masahiko (Stanford University)
Firms, Nonprofits, and Cooperatives: A Theory of Organizational Choice
Herbst, Patrick (Goethe University, Frankfurt)
Prufer, Jens (Goethe University, Frankfurt)
Firm Boundaries in the New Economy: Theory and Evidence
Subramanian, Krishnamurthy (Emory University)
Queen Bee Syndrome
| Peter Klein |
Everyone knows that males tend to be perceived more favorably for leadership positions than females. But did you know that this perception is stronger among females? A paper by Rocio Garcia-Retamero and Esther López-Zafra in the journal Sex Roles (vol. 55, nos. 1-2, July 2006) provides evidence that women are more prejudiced against women leaders than are men.
Participants evaluated a male or a female candidate for a leadership position in an industry that was congruent or incongruent with the candidate’s gender role. Participants showed prejudice against the female candidate, especially when she worked in an industry incongruent with her gender role. Female and older participants showed more prejudice against the female leader than did male and younger participants.
The London Times, reporting on the paper, calls this “queen bee syndrome.” Says businesswoman Nicola Horlick: “I have seen women in managerial positions discriminating against other women, possibly because they like to be the only female manager or woman in the workplace.” (HT: A&L Daily)
This evidence squares with a basic truth about stereotyping, or “statistical discrimination,” as economists call it. Under such discrimination, the strongest conflicts tend to result from within-group, rather than between-group, conflicts of interest. See Bryan Caplan’s illuminating discussion here.
Expedited Reviews: Act Now, Offer Expires Soon!
| Peter Klein |
The Atlantic Economic Journal is trying a new tactic to attract high-quality submissions: expedited reviews for all papers received within a designated window. Received this by email (emphasis in original):
Just a reminder that the deadline to submit papers to the Atlantic Economic Journal’s “ER” program is January 31, 2007. The “ER” program grants your manuscript special attention and guarantees a quick response. You will no longer spend months waiting around to hear a decision on your submission. Notice of the first level of review is made within 30 days of submission. The paper is then rushed to the second level of review, with a final decision made within the next 60 days.
This program is only being offered for a limited time and will expire on January 31, 2007.
For further information or to submit online, please go to: http://www.iaes.org/publications/aej/er_program.htm
Not the usual sales pitch from a scholarly publication, but in an increasingly competitive academic labor market, the promise of a quick turnaround may be attractive, especially to junior faculty. (The typical turnaround for an economics journal is around six months.)
As the academic journal space becomes increasingly crowded, with online publications like the BE Press journals competing with the established (and new) print journals, such aggressive tactics may become increasingly common. (A more effective tactic might be differential submission fees — one fee for regular turnarounds, a higher fee for expedited reviews, and so on. After all, shouldn’t an economics journal be using the price mechanism to allocate a scarce resource?)
The Golden Decade
| Peter Klein |
Our friends at orgtheory.net are discussing the year 1977, in which several classic works in organization theory were published. I can’t be that precise, but I can vouch for the 1970s — a “golden decade” for organizational economics research. Coase’s “Nature of the Firm” appeared in 1937, of course, but it remained — in Coase’s words — “much cited, little used.” It was only in the 1970s that the modern theory of the firm, or the new economics of organization, emerged. Consider this list: (more…)
Introducing Guest Blogger Clifford Grammich
| Peter Klein |
We are pleased to introduce Clifford Grammich as our newest guest blogger. Cliff (PhD, Political Science, Chicago, 1996) conducts independent research on the demographics and sociology of religion. Among other projects, he is chairman of the Religious Congregations and Membership Study operations committee of the Association of Statisticians of American Religious Bodies, the compilers of the only decennial county-level enumeration of religious congregations and their members in the United States. He plans to post about some “market” issues and the “demand” for religion, as well other issues on religion he is currently researching. Welcome, Cliff!
We Got Street Cred
| Peter Klein |
O&M gets this nice endorsement from the tech-oriented Doctor Recommended blog:
If you have spent much time working for The Man or consider yourself an entrepreneur of any stripe, then you have at some point thought about how firms should be organized: flat, horizontal, vertical, Terry Tate-ish, ad nauseam. I find the academic debate surrounding these issues interesting, though at times, completely Ivory Towerish. However, Peter Klein and his Denmarkian friend make the discourse interesting and germane. Plus I have a soft-spot for their Austrian-esque approach to Bureaucracy.
If there’s one thing we Ivory-Tower types hate, it’s being called Ivery Towerish!
The New Model CEO
| Peter Klein |
The firing of Home Depot’s Robert Nardelli, whose Saban-esque compensation package was a flashpoint of controversy during his six-year tenure as CEO, dominates the front page of Thursday’s WSJ. Alan Murray’s column, “Executive’s Fatal Flaw: Failing to Understand New Demands on CEOs,” neatly summarizes the New Corporate Governance:
What Mr. Nardelli missed . . . is that in the post-Enron world, CEOs have been forced to respond to a widening array of shareholder advocates, hedge funds, private-equity deal makers, legislators, regulators, attorneys general, nongovernmental organizations and countless others who want a say in how public companies manage their affairs. Today’s CEO, in effect, has to play the role of a politician, answering to varied constituents. And it’s in that role that Mr. Nardelli failed most spectacularly.
Here’s the problem: Do we really want CEOs to be politicians? If we accept Hayek’s argument that in the political marketplace, the worst get on top, what kind of leader becomes our New Model CEO? (more…)
Agency Costs in Corporations
| Peter Klein |
Law professors are calling this “the best corporate law cartoon ever.” (Click to enlarge.)
More on Walras
| Peter Klein |
Regarding Walras and the development of mathematical economics, Don Lloyd sends along these quotes from The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics by Eric D. Beinhocker (HBS Press, 2006):
The young Walras had a very shaky start to his career, and there was little foreshadowing of his later greatness. As a student, he was twice rejected from the prestigious Ecole Polytechnique due to poor mathematical skills. He instead went to the Ecole des Mines but failed as an engineer, then tried his hand as a novelist but was unsuccessful at that as well. One evening in 1858, a depressed Walras took a walk with his father, a teacher and writer, discussing what he should do with his life. The elder Walras, a great admirer of science, said that were two great challenges remaining in the nineteenth century: the creation of a complete theory of history, and the creation of a scientific theory of economics. He believed that differential calculus could be applied to economics to create a “science of economic forces, analogous to the science of astronomical forces.” The younger Walras was inspired by his father’s vision of a scientific economics and decided to make achieving that vision his life’s work (p. 29).
[I]t was particularly from chapter two of [Poinsot’s Elements of Statics], titled “On conditions of equilibrium expressed by means of equations,” that Walras imported the concept of equilibrium from physics into economics and laid the foundation for the Traditional Economics found in textbooks and journals today. This historical detail is noteworthy, because, as we will see in the next chapter, some critics argue this borrowing of equilibrium from physics was a crucial scientific misstep that has had lasting consequences for the field (p. 31).
Best Paper Title I Read Today
| Peter Klein |
“A Conceptual Framework for Interpreting Recorded Human History” by North, Wallis, and Weingast. Abstract below. (Thanks to Arnold Kling for the pointer.)
Neither economics nor political science can explain the process of modern social development. The fact that developed societies always have developed economies and developed polities suggests that the connection between economics and politics must be a fundamental part of the development process. This paper develops an integrated theory of economics and politics. We show how, beginning 10,000 years ago, limited access social orders developed that were able to control violence, provide order, and allow greater production through specialization and exchange. Limited access orders provide order by using the political system to limit economic entry to create rents, and then using the rents to stabilize the political system and limit violence. We call this type of political economy arrangement a natural state. It appears to be the natural way that human societies are organized, even in most of the contemporary world. In contrast, a handful of developed societies have developed open access social orders. In these societies, open access and entry into economic and political organizations sustains economic and political competition. Social order is sustained by competition rather than rent-creation. The key to understanding modern social development is understanding the transition from limited to open access social orders, which only a handful of countries have managed since WWII.
P.J. O’Rourke Reads The Wealth of Nations
| Peter Klein |
. . . so you don’t have to.
O’Rourke is a funny guy — his chapter on farm policy in Parliament of Whores should be required reading in all courses in agricultural economics and public policy — so this should be an entertaining book. Not sure if I’ll agree with his interpretation of Smith, of course. (Also highly recommended: “Among the Euro-Weenies” from 1988’s Holidays in Hell.)
Microinsurance
| Peter Klein |
We’ve expressed skepticism on these pages for the microfinance movement. Next up for critical scrutiny: microinsurance, which follows largely the same model. See the discussion on the PSD Blog for details, and especially this paper by Jonathan Morduch.
Judgment, Luck, and Intuition
| Peter Klein |
Former guest blogger Lasse Lien asked recently how entrepreneurial judgment is different from luck. Harold Demsetz once asked the same thing about Kirzner’s concept of alertness (“The Neglect of the Entrepreneur, 1983”). In our work on entrepreneurship Nicolai and I have defined judgment in Knightian terms as decision-making when the range of possible future outcomes, let alone the likelihood of individual outcomes, is unknown. In Mark Casson’s formulation, judgment is needed “when no obviously correct model or decision rule is available or when relevant data is unreliable or incomplete.”
If judgment is more than luck, then what is it? How about “intuition,” another kind of decision-making without a formal rule or model? The January 2007 Academy of Management Review features Erik Dane and Michael Pratt’s “Exploring Intuition and Its Role In Managerial Decision Making.” Intuition is defined inconsistently across the literatures in psychology, philosophy, and management, and Dane and Pratt do a nice job summarizing and synthesizing these definitions. Their own concept of intuitions is “affectively charged judgments that arise through rapid, nonconscious, and holistic associations.” They write: (more…)
NASA Didn’t Invent Tang
| Peter Klein |
Or velcro, the microwave oven, teflon, or nylon, not to mention semiconductors, microprocessors, or the internet, to name just a few innovations falsely credited to America’s giant, bloated, and highly inefficient space bureaucracy. Tim Swanson reminds us of all this, and adds:
In the end, regardless of what the state did or did not fund or invent, the take-away principle is the unseen. While everyone with a TV has been able to see the hordes of chemical rockets dramatically blast into the cosmos over the past decades, they were similarly unable to see the productive opportunities foregone and ignored via the reallocation of scarce resources.
The perceived benefits of a vain, nationalized space program include, among others, the fallacious need to fight the mythical shortage of scientists and engineers. Whereas in reality, it has stymied private tourism, exploration, and research for nearly half a century.
Tim also notes that during the Space Shuttle’s development, NASA engineers regularly testified before various appropriations committees that the Shuttle’s estimated failure rate was 1 per 100,000 missions. The actual failure rate has been 1 in 50.
Rubinstein on Behavioral Economics
| Peter Klein |
Ariel Rubinstein (discussed here and here) isn’t high on behavioral economics:
1. The behavioralists’ models are just as unrealistic as the traditional models. “[Matthew] Rabin goes out of his way to beat, if I may use his own phrase, the ‘dead parrot’ of full rationality. Of course there are many facts that are hard to reconcile with full rationality. But the psychology and economics literature has replaced a dead parrot with one that is equally dead. If the ‘time consistent’ model is wrong, then [Rabin’s present-bias model] is equally wrong.”
2. The papers are long and messy. “A major drawback of the behavioral economics models is that they lack both the elegance and generality that characterize the literature of General Equilibrium and Game Theory. The typical paper is messy and terribly long. Simple ideas are lost in poorly formulated models and numerical examples.” (Of course, if you don’t rank elegance and generality as your top theoretical criteria, this criticism isn’t likely to be compelling.) (more…)
Cover Letters From Hell
| Peter Klein |
As a service to our student readers, we suggest you avoid these cover letter mistakes when circulating your CV to potential employers (academic or commercial).
All of us — not only students, but mature professionals as well, particularly in academia — should work hard to avoid jargon-speak.
A writer uses pseudo-legalese because he lacks confidence in his authentic voice. From undergraduates trying to ace our Creativity Test, to MBAs immersed in BizSpeak, applicants feel they must inflate their prose by imitating Dickens, or combing the thesaurus to select — sigh — precisely the wrong word.
Imagine, if you will, two roommates at Thesaurus U.:
“I aspire to obtain a beverage. The vending machine is where my path leads.”
“I wish to accompany you, since I have assembled a myriad of coins.”
“I possess coins, as well. Let’s embark.”
Via Craig Newmark.
The Other O&M
| Peter Klein |
Sometimes people mistake me for this Peter Klein, or this one, or this one. (Memo to other Peter Kleins: If you have any of my journal acceptance letters, could you please forward them? I seem to be missing a few.) As it turns out, “Organizations and Markets” is also the title of an Economic Research Network (ERN) subject matter journal. (ERN, part of SSRN, uses the word “journal” for its lists of abstracts and papers; there’s no peer review involved.) George Baker manages the series; his illustrious advisory board includes names like Gibbons, Hart, Holmstrom, Jensen, Shleifer, and Williamson. Not bad.
Here are the most downloaded papers in the series. You’ll see some familiar items. A sample issue looks like this.
Wonder how much they’d pay for our URL?
Organizations and Markets 
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