Posts filed under ‘Methods/Methodology/Theory of Science’
Are We Quacks?
| Lasse Lien |
Rich Bettis makes an important point in a forthcoming issue of SMJ. Bettis points out how two unfortunate practices interact with each other to create a very serious and fundamental problem for knowledge accumulation in (strategic) management.
One is the widespread practice of running numerous regressions on a given dataset and subsequently adapting (or in milder cases “tuning”) hypotheses or theory to fit the data. By itself this practice is quite unfortunate, since data patterns can and will occur by chance, and the more regression models one tries the more likely that one will “find” something. We obviously do not want such random patterns to influence either theory building or our catalog of empirical findings. However, this problem would be a great deal less serious if replication studies were common and we gladly published non-findings. Random correlations in the data would not survive replication tests, and would be eliminated fairly quickly.
As we all know, in management, replication studies cannot get published and are basically just not done. To make matters worse, we don’t publish non-findings either. This is the second unfortunate practice. Taken together these two practices may in the worst case indicate that much of what we think we know in management are just random data patterns, discovered through data mining, and protected by our lack of replication studies and refusal to publish non-findings. This is a sobering thought. As Bettis points out, we should all be very thankful that replication studies are more common in medical research than in management.
What is the solution? Well, a first step might be to launch the Journal of Managerial Replication Studies and give it the prestige it deserves. Either SMS or AOM should see the launch of such a journal as a crucial responsibility. I mean, we really don’t want to be quacks, do we?
HT: Helge Thorbjørnsen
Rationalistic Hubris and Opportunistic Behavior
| Peter Lewin |
The October 2011 issue of the Journal of Economic Behavior & Organization is a special issue on the work of James Buchanan, guest edited by Pete Boettke, arising out of a recent FFSO conference. In addition to Boettke, the contributors are Kliemt, Marciano, Munger, Leeson, G. Vanberg, Voigt, Horwitz, Besley, Coyne, and Horn on a variety of topics. Amartya Sen and Elinor Ostrom contributed short appreciations. This issue is full of good stuff on a variety of topics.
I focus here on the lead article by Pete Boettke somewhat clumsily entitled, “Teaching Economics, Appreciating Spontaneous Order, and Economics as a Public Science.” For my part, this article alone makes the issue worthwhile getting. Boettke presents an overview of the many facets of Buchanan’s work (and as they developed over his career) helpfully connecting and contrasting it with Hayek. Some of these ideas are directly relevant to the organization and management context.
At the risk of distorting oversimplification, we may say that whereas Hayek concentrated on the problem of rationalistic hubris, Buchanan concentrated on the problem of opportunistic behavior. Both are inevitable and related problems of social systems, and each of their works thus complements the other. In a nutshell, each is an in-depth protracted examination of the knowledge problem and the incentive problem, respectively.
As points of emphasis in their respective works, Hayek concentrated on the limits on man’s knowledge at the abstract level, and the contextual nature of the knowledge residing in the economy at the concrete level, while Buchanan stressed the institutional/organizational logic of politics and the systemic incentives that different rule environments generate. In both, however, the central message of same players, different rules, produce different games is seen throughout their work in comparative political economy. To Hayek the puzzle was how to limit the rationalistic hubris of men, to Buchanan the puzzle was how to limit the opportunistic impulse of men. Both found hope in what they called a “generality norm” embedded in a constitutional contract — no law shall be passed, or rule established which privileges one group of individuals in society.
Hayek uses an evolutionary approach and Buchanan a “veil of ignorance” contractarian approach. But both are surely applicable to organizations of all types.
Intellectual History Making a Comeback
| Peter Klein |
At this blog we love intellectual history, particularly the history of economic and management thought. Of course, intellectual history has largely disappeared from the curricula of top economics and management programs. In these fields, the trend was driven by positivism — the belief that social science, like natural science, should favor experimental methods, hypothesis testing, and the rest of the usual trappings of Science. For positivists, there is no need to study the history of the discipline, because any truths emerging from prior work have already been incorporated in to the current textbooks and journal articles. (Murray Rothbard called this the “Whig theory” of intellectual history.)
In the field of intellectual history more generally, the challenges came from the late-twentieth-century emphasis on race, gender, and ethnicity, which privileged social, cultural, and material factors over intellectual ones. But apparently intellectual history is making a comeback. The New York Times reports on the newly formed Society for U.S. Intellectual History, which is sparking new interest in the field. The Times article describes
a resurgence in the fortunes of intellectual history — a discipline long dismissed, if not as boring, then as musty, elitist and out of touch. While intellectual historians like Richard Hofstadter and Perry Miller once dominated the profession, they were swept aside in the 1960s by the rise of social and then cultural history, which regarded talk of “the American mind” as code for “the mind of white, male Americans who happened to write books.”
Today, however, a new breed of young intellectual historian is aiming to integrate the spirit of “history from below” with an approach that doesn’t chop American history off at the neck. Young intellectual historians, scholars at the conference were quick to emphasize, have fully absorbed the lessons of the profession’s increased attention to questions of race, class and gender, without losing hold of the premise that ideas matter, even in a culture that still considers “intellectual” a term of abuse.
“We still want to talk about ideas, but we see ideas everywhere,” said Andrew Hartman, a professor at Illinois State University and president of the newly formed Society for U.S. Intellectual History, which sponsored the conference. “Big ideas affect everybody. It’s not elitist to talk about them.”
Shakespeare and Epistemology
| Peter Klein |
We university types love The Bard — we’ve got bookstores hither and yon, pizza joints, you name it. Not surprisingly, Shakespearean scholars are up in arms at Roland Emmerich’s film Anonymous, which they view as silly entertainment at best, disreputable Oliver Stone style revisionism at worst. I haven’t seen the movie and don’t have a particular dog in the authorship fight (though I once heard a very funny lecture by Joe Sobran based on his 1997 book Alias Shakespeare). But I’m puzzled by the core epistemological issue: what do we really know about Shakespearean authorship?
An English professor friend told me that belief in a different author for any of Shakespeare’s works is like “belief in the phlogiston theory of fire.” Stephen Marche writes in the NY Times Magazine: “It is impossible that Edward de Vere wrote Shakespeare. Notice that I am not saying improbable; it is impossible.” Again, I don’t know anything about the issue other than what I’ve read in recent commentaries, but Marche’s case, in the piece linked above, is surprisingly weak (some Shakespeare products are dated after de Vere died, which only proves that de Vere couldn’t have written those; the doubters are snobs who don’t believe a poor country boy could have written such beautiful verse, which could be true, but hardly establishes that the country boy did in fact write them; and other circumstantial bits and ex cathedra pronouncements.)
My question, though, is the epistemological one: How can we possibly know with 100% certainty who authored every one of the literary works attributed to Shakespeare? Heck, we don’t know who really writes the stuff published under names like “Doris Kearns Goodwin” and “Stephen Ambrose,” and those appeared in the last few years, not the 17th century. There’s even a lively controversy about what Adam Smith wrote and what he copied. Intellectual historians are frequently reinterpreting and revising, and few cows are sacred. Regarding Shakespearean authorship, then, shouldn’t we expect a little Popperian or Hayekian humility?
Causal Identification in Management Research
| Peter Klein |
Mike Ryall writes about the 2011 HBS strategy conference:
Of the empirical papers, almost half incorporated some method aimed at causal identification. My sense is that such identification strategies will soon become a fairly standard requirement for publication in a top management journal (“soon” being measured in academic time, of course).
We’ve discussed this issue several times, including a 2008 post on the potential tradeoffs between choosing problems that are well-identified and choosing problems that are important. I agree with Mike that the management and entrepreneurship literatures — at least the quantitative empirical part of those literatures — are catching up the economists here. But consider the advantages of backwardness: can management research learn to take identification seriously without falling into the Freakonomics trap? (Please, no Freakostrategy or Super-Freakopreneurship!)
Of course, management and entrepreneurship researchers, unlike most economists, tend to sympathize with (or at least tolerate) qualitative methods, and one legitimate means of generating causal inference is careful, detailed, historical investigation, case work, ethnography, analytical narrative, and so on. I suspect, though, that the trend Mike describes will tend to push these approaches to the side as well.
What Do Boards Really Do?
| Peter Klein |
Coase is fond of telling this story about the economist and the horse:
Economics, over the years, has become more and more abstract and divorced from events in the real world. Economists, by and large, do not study the workings of the actual economic system. They theorize about it. As Ely Devons, an English economist, once said at a meeting, “If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, ‘What would I do if I were a horse?’” And they would soon discover that they would maximize their utilities.
Coase, as O&M readers know, prefers direct, hands-on observation to abstract theorizing. As a Misesian [serious, hubba hubba], of course, I can’t endorse this view as a general prescription, though I recognize its value for empirical work. Sometimes it’s best to look at real examples, or to ask real practitioners. Kaplan and Strömberg read through real-world venture-capital contracts to see how control rights were allocated. Genesove and Mullin used the minutes of trade-association meetings, not modeling, to figure out how members of the US sugar cartel maintained compliance.
Here’s another interesting example: “What Do Boards Really Do?” by Miriam Schwartz-Ziv and Michael Weisbach.
We analyze a unique database from a sample of real-world boardrooms – minutes of board meetings and board-committee meetings of eleven business companies for which the Israeli government holds a substantial equity interest. We use these data to evaluate the underlying assumptions and predictions of models of boards of directors. These models generally fall into two categories: “managerial models” assume boards play a direct role in managing the firm, and “supervisory models” assume that boards’ monitor top management but do not make business decisions themselves. Consistent with the supervisory models, our minutes-based data suggest that boards spend most of their time monitoring management: 67% of the issues they discussed were of a supervisory nature, they were presented with only a single option in 99% of the issues discussed, and they disagreed with the CEO only 3.3% of the time. In addition, managerial models describe boards at times as well: Boards requested to receive further information or an update for 8% of the issues discussed, and they took an initiative with respect to 8.1% of them. In 63% of the meetings, boards took at least one of these actions or did not vote in line with the CEO.
I think Ronald would approve.
Two Finance Papers of Interest
| Peter Klein |
Two recent review-type papers from NBER:
Behavioral Corporate Finance: An Updated Survey
Malcolm Baker, Jeffrey Wurgler
NBER Working Paper No. 17333
Issued in August 2011We survey the theory and evidence of behavioral corporate finance, which generally takes one of two approaches. The market timing and catering approach views managerial financing and investment decisions as rational managerial responses to securities mispricing. The managerial biases approach studies the direct effects of managers’ biases and nonstandard preferences on their decisions. We review relevant psychology, economic theory and predictions, empirical challenges, empirical evidence, new directions such as behavioral signaling, and open questions.
A Brief History of Regulations Regarding Financial Markets in the United States: 1789 to 2009
Alejandro Komai, Gary Richardson
NBER Working Paper No. 17443
Issued in September 2011In the United States today, the system of financial regulation is complex and fragmented. Responsibility to regulate the financial services industry is split between about a dozen federal agencies, hundreds of state agencies, and numerous industry-sponsored self-governing associations. Regulatory jurisdictions often overlap, so that most financial firms report to multiple regulators; but gaps exist in the supervisory structure, so that some firms report to few, and at times, no regulator. The overlapping jumble of standards; laws; and federal, state, and private jurisdictions can confuse even the most sophisticated student of the system. This article explains how that confusion arose. The story begins with the Constitutional Convention and the foundation of our nation. Our founding fathers fragmented authority over financial markets between federal and state governments. That legacy survives today, complicating efforts to create a financial system that can function effectively during the twenty-first century.
“Micro Chauvinists” Pushing Back …
| Nicolai Foss |
A reviewer of a recent book proposal by Teppo Felin and me (which was accepted, BTW; details later) had the effrontery to note that “Felin and Foss get considerable pushback when they take a strong stand on methodology.” Of course, this reviewer got it all wrong. To wit:
- Teppo and I recently published “The endogenous origins of experience, routines and organizational capabilities: The poverty of stimulus” in the Journal of Institutional Economics, accompanied by critical comments by Sidney Winter, Brian Pentland, Geoff Hodgson and Thorbjørn Knudsen. Here is our response to the comments of our critics. The response has been accepted for publication in the Journal of Institutional Economics.
- In a recent paper in Sociological Theory, influential sociologists Ronald Jepperson and John W Meyer took issue with the rampant “micro-chauvinism” that, in their opionion, increasingly dominates social science, and called for multi-level explanation that admits a role for causation that (in some unexplained fashion) takes place at levels above that of individuals. In this brief note, Teppo and I (and Peter Abell of LSE) take issue with their arguments, and argue that they fundamentally misunderstand methodological individualism and its crucial role in understanding those phenomena that are “multi-level”, “complex” and “emergent.”
Thus, the macro chauvinists are the ones who are getting the pushback ;-)
Legal Rights of Academics and Journalists
| Peter Klein |
Do academic oral historians have the same legal protections as journalists? No, according to the US Department of Justice:
With the filing, the U.S. government has come down firmly on the side of the British government, which is fighting for access to oral history records at Boston College that authorities in the U.K. say relate to criminal investigations of murder, kidnapping and other violent crimes in Northern Ireland. The college has been trying to quash the British requests, arguing that those interviewed as part of an archive on the unrest in Northern Ireland were promised confidentiality during their lifetimes.
This is from Inside Higher Ed via Zachary Schrag, who notes that the DOJ brief
suggests that the Boston College researchers are mere academics, and seizing information from them should be easier than prying it from reporters “because the Constitution and the courts have long recognized the unique role which news reporters play in our constitutional system. See, e.g., Branzburg, 408 U.S. at 681; New York Times Co. v. Sullivan, 376 U.S. 254, 268-71 (1964). The limited protections afforded news reporters in the context of a grand jury subpoena should be greater than those to be afforded academics engaged in the collection of oral history.”
Lots of interesting stuff above about informed consent, academic freedom, confidentiality, etc.
New Issue of Business History Review
| Peter Klein |
The March 2011 issue of Business History Review, just now online, contains several excellent papers, including “The Origin and Development of Markets: A Business History Perspective” by Mark Casson and John Lee, “Economics, History, and Causation” by Randall Morck and Bernard Yeung, “Globalization, Development, and History in the Work of Edith Penrose” by Christos Pitelis, and “Economic Theory and the Rise of Big Business in America, 1870–1910” by Jack High.
Morck and Yeung take the (perhaps surprising, almost Misesian) position that “[i]nstrumental variables can lose value with repeated use because of an econometric tragedy of the commons: each successful use of an instrument creates an additional latent variable problem for all other uses of that instrument,” and that “[e]conomists should therefore”consider historians’ approach to inferring causality from detailed context, the plausibility of alternative narratives, external consistency, and recognition that free will makes human decisions intrinsically exogenous.”
High notes that “by 1910, the entrepreneur was an important figure in American economics. He appeared regularly in textbooks written by American economists and his influence in the economy, especially in large firms, was generally recognized.” Entrepreneurship at that time was not about startups, but coordination more generally: J. R. Commons called the entrepreneur “the speculating, progressive, organizing, inventive, economizing agent of industry.”
AEA Drops Double-Blind Reviewing
| Peter Klein |
An announcement from the American Economic Association:
On April 15, 2011, the Executive Committee voted to drop “double-blind” refereeing for the Association’s journals. The change to “single-blind” refereeing (the referees’ identity remains undisclosed) is effective July 1, 2011. Easy access to search engines increasingly limits the effectiveness of the double-blind process in maintaining author anonymity. Double-blind refereeing also increases administrative costs of the journals and makes it harder for referees to identify an author’s potential conflicts of interest arising, for example, from consulting.
Frank Knight and the Austrians
| Peter Klein |
At this year’s Austrian Scholars Conference I gave a presentation playfully titled “Frank H. Knight: The Forgotten Austrian.” The title was tongue-in-cheek, of course, as Knight was no Austrian. Though friendly with Hayek personally, Knight was a harsh critic of Austrian capital theory, particularly as formulated by Böhm-Bawerk and Hayek. (Knight conceived capital as a permanent fund of value, with interest determined by the technical marginal productivity of capital, rejecting notions of production structures and time preference.) Knight was also a key developer of perfect competition theory — anathema to Austrians — though mainly to illustrate the importance of uncertainty, not to serve as a welfare bechmark.
Still, there are many interesting similarities between Knightian and Austrian economics. Regular readers of O&M already know that Mises’s approach to entrepreneurship, uncertainty, and the firm is basically the same as Knight’s. Knight rejected positivism, calling it “the emotional pronouncement of value judgments condemning emotion and value judgments” (Knight, 1940). He often sounded like a Misesian praxeologist: “If anyone denies that men have interests or that ‘we’ have a considerable amount of knowledge about them, economics and its entire works will simply be to such a person what the world of color is to the blind man” (Knight, 1956). Indeed, critics dismiss Knight’s epistemological writings as “extended Austrian-style disquisitions on the foundations of human knowledge and conduct and the like” (LeRoy and Singell, 1987) — the ultimate insult! (more…)
Research Design Quote of the Day
| Peter Klein |
Following up our earlier discussion of identification versus importance (see also this), here’s the research design quote of the day (via Pete Boettke):
I worry that the drive for “clean” identification as a methodological obsession is driving some junior researchers . . . to a pursuit of the cute instrument (whether natural or experimental). This is leading them down the intellectual cul de sac of precise answers to trivial questions.
You see this kind of lament expressed more and more in various social science fields. Will there be a backlash against the identification obsession?
Mario Rizzo’s Graduate Course in Behavioral Economics
| Peter Klein |
Check out the syllabus and join the discussion at ThinkMarkets. I appreciate boat-rocking as much as anyone but am personally in what Mario terms (in his syllabus) the “classical” camp. Still, this is a course I would definitely take. If he’s an easy grader.
New Insight from Old Data
| Peter Klein |
A few years ago Mike Sykuta and I met with Ronald Coase to discuss ways to add contract documents to the CORI library. Limited contract data from secondary sources, like large-company public filings, are readily available, but how to get a larger variety of contract types, such as the long-term supply agreements of particular interest to Coase? Firms are naturally reluctant to make these available to researchers. Coase’s suggestion was to pursue obsolete contracts from company archives. Old contracts, after all, should be as good as current ones for examining hypotheses about contract design and performance, and firms presumably don’t care if they’re made public.
A recent HBR article implores companies to make use of archived datasets, and the advice applies to academic researchers as well. “For example, a retailer that has kept and labeled its old POS data could now subject it to today’s sophisticated analytical techniques, gaining a valuable understanding of long-term consumer trends.” Likewise, revisiting old data with new and better econometrics, more careful attention to research design (e.g., identification), and sharper hypotheses could generate some interesting findings.
In strategy and entrepreneurship research, everybody wants to study the same stuff: pharma and biotech patenting, R&D alliances, technology IPOs, etc. On the margin, a clever study of an old industry, old data, an old problem, could create a lot of value.
The Performative Effects of Social Constructionist Professors in Business Schools
| Nicolai Foss |
Many European business schools praise disciplinary diversity. Some style themselves as “business universities,” rather than “traditional” business schools. Such schools may have a substantial contingent of faculty from the humanities, including historians, literary theorists, and philosophers, as well as sociologists and political scientists. The probability of such faculty subscribing to social constructionism is high. Typically, this perspective is taught to the students in courses on communication, whether intercultural or not, the theory of science, cross-cultural management, and so on. It is pretty much everywhere.
Those in sociology who stress “reflexivity” and “performativity” tell us that our theorizing, as mediated through teaching, influences the objects of theorizing. What may be the performative effect of social constructionist professors? My hypothesis is that the students they teach will end up acting like Hayek’s “constructivist rationalists” on the level of society, that is, managers who believe everything in organizations is malleable, and may therefore do substantial damage to the organizations they manage. The Wiki on social constructionism provides a neat summary of Ian Hacking’s celebrated critique of social constructionism:
Ian Hacking, having examined a wide range of books and articles with titles of the form “The social construction of X” or “Constructing X”, argues that when something is said to be “socially constructed”, this is shorthand for at least the following two claims:
(0) In the present state of affairs, X is taken for granted; X appears to be inevitable.
(1) X need not have existed, or need not be at all as it is. X, or X as it is at present, is not determined by the nature of things; it is not inevitable.
Hacking adds that the following claims are also often, though not always, implied by the use of the phrase “social construction”:
(2) X is quite bad as it is.
(3) We would be much better off if X were done away with, or at least radically transformed.
If this is foundational for you as a manager, you will likely have little respect for what has evolved inside an organization, because “it is not inevitable.” You will be unimpressed by efficiency arguments from economics and functionalist arguments from sociology that explain the presence of a given feature of an organization. Your urge is to change the organization erratically according to your whims, and nourish ongoing turmoil. Psychological/implicit contracts suffer. Negative implications for productivity and firm-level performance follow.
Scientific Misconduct in Management Research
| Nicolai Foss |
Fraudulent behavior in research is the ultimate academic gossip. It is hardly surprising that our post on Thomas Basbøll’s claim that management theory heavyweight Karl Weick has engaged in plagiarism (here) was one of O&M’s most popular posts in 2010. One of my own papers was once directly copied. All that was changed was the front page. In one of those strange coincidences, the journal editor asked my co-author to review the paper. The plagiarist was a consultant, not an academic, so it is possible that the case had no consequences for him.
How prevalent is scientific misconduct in management research? And how strongly should we care? After all, what gets published in the management journals does not have the same direct impact as what gets published in the medicine journals, or what the UN’s Intergovernmental Climate Panel utters. While management research may not cure cancer, it likely has considerable impact on resource allocation, and therefore on what is available for curing cancer. Moreover, there are strong externalities: A reputation for “bad science” in one field or discipline may easily spill over to other fields and disciplines. Hence, misconduct should be regarded with as severely in management research as in other fields and disciplines.
With respect to the incidence of fraudulent research behavior, rather little is known. While fraud in, particularly, medicine tends to draw major headlines in the press, I cannot recall anything similar in the case of management research. It seems unlikely that management researchers should be significantly more honest than researchers in medicine, so our lack of knowledge in this seems troublesome. In “Management Science on the Credibility Bubble: Cardinal Sins and Various Misdemeanors,” recently published in the Academy of Management Learning and Education, Arthur G. Bedeian, Shannon G. Taylor, and Alan N. Miller present evidence that research misconduct is quite a prevalent phenomenon. Briefly, they collected data from faculty in 104 PhD-granting management departments in the US. Questions identified “eleven different types of questionable research conduct, including data fabrication, data falsification, plagiarism, inappropriately accepting or assigning authorship credit, and publishing the same data or results in two or more publications.”
Some of Bedeian et al.’s examples of “questionable research conduct” seem somewhat open to interpretation and questioning (e.g., “developing ‘ins’ with journal editors” — in fact, the initiative for such “ins” often emerge from the editor side; “published the same data or results in two or more publications” — presumably, there is nothing necessarily wrong with publishing “the same data … in two or more publications”), and the procedure of asking faculty to indicate their “knowledge of faculty engaging in” research misconduct is questionable, as different faculty may relate to the same episode of research misconduct (they acknowledge this problem). Still, the numbers are quite striking. More than 70% reports knowledge of cases of not giving due credit to originators of ideas (i.e., plagiarism). Even more report knowledge of data manipulation, although only (?) 27% report knowledge of outright data fabrication.
Finally — a Field Experiment!
| Lasse Lien |
Field experiments represent a killer combination of a causal design and external validity — the best of both the classical (laboratory) experiment and the natural experiment. Unfortunately, field experiments in strategy, management, organizational economics, etc. are often prohibitively costly, morally questionable, or both. But sometimes a field experiment is feasible, and when it is, it tends to stand out as particularly interesting.
This paper illustrates this point quite well, IMHO. The paper is a field experiment on the not entirely trivial question: Does Management Matter?
The Value of Steve Jobs
| Peter Klein |
As you have likely heard, Steve Jobs is taking an indeterminate leave of absence from Apple to deal with his continuing health problems. How will this affect Apple? How important is one person — albeit the founder and CEO — to a diversified multinational company with tens of thousands of employees? Apple’s stock slipped slightly on the news of Jobs’ leave (down 2.3 percent today, the first trading day after the announcement), but Jobs’s health problems are well known and Apple’s stock price presumably already included a discount reflecting the possibility he’d step down. To estimate the value of a particular employee to the firm in this way, we need an unanticipated departure, one that isn’t a response to poor performance and isn’t expected in advance.
Sure, enough, there’s an app for that — I mean, there’s a literature on that. An influential 1985 paper by Bruce Johnson, Robert Magee, Nandu Nagarajan, and Harry Newman looked at stock-price reactions to CEO deaths by plane crash, finding positive announcement effects for founders and negative announcement effects for professional managers. (One way to handle the founder-succession problem!) Macabre, I know, but nonetheless a clever way to deal with endogeneity. Naturally, this paper spawned a follow-up literature. Rather than cite the papers myself, I’ll just block quote a paper by Bang Dang Nguyen and Kasper Meisner Nielsen presented at last week’s AEA meeting, “What Death Can Tell: Are Executives Paid for Their Contributions to Firm Value?” and you can chase down the references on your own: (more…)
New Coase Interview
| Peter Klein |
In conjunction with Ronald Coase’s new book on China, he’s given a new interview to his co-author Ning Wang. (HT: Paul Walker via Mike Giberson.) Excerpt:
WN: You mentioned many times that you do not like the term, “Coasean economics,” and prefer to call it simply the “right economics” or “good economics.” What separates the good from bad, the right from wrong?
RC: The bad or wrong economics is what I called the “blackboard economics.” It does not study the real world economy. Instead, its efforts are on an imaginary world that exists only in the mind of economists, for example, the zero-transaction cost world.
Ideas and imaginations are terribly important in economic research or any pursuit of science. But the subject of study has to be real.
I’m sympathetic to this, but with some methodological reservations, expressed at the end of this post. Anyway, the interview focuses on China, its future economic prospects and likely influence, and the newly formed Coase China Society. Coase is bullish on China: “In the past, economics was once mainly a British subject. Now it is a subject dominated by the Americans. It will be a Chinese subject if the Chinese economists adopt the right attitude.” (more…)
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