Results for “time management” 347 found
Saturday assorted links
The New Zealand real estate problem, with reference to Palmerston North
From my email, from Ryan Reynolds:
I’ve worked in Palmerston North, as well as Tauranga and Auckland (all briefly). I’m Australian too, so my perspective may be shaded vs what a Kiwi or someone from further afield might say.
The major issue is just supply of new dwellings and the permitting and development process. All the rest of the factors noted point to increases in demand (immigration, natural population growth, easy credit, real income growth, tax structures, chinese buyers) – but without a limit on supply you would have expected those factors to result in a building boom not a rapid price appreciation. That’s obviously not the way reality has played out.
From a permitting side, the Resource Management Act heavily constrains lots of building decisions and imposes a lot of bureaucracy (and time delays and uncertainty). Less specifically, Kiwi’s appear to have strong preferences for careful building and urban sprawl in lots of dimensions. That includes specific issues like building heights, overshadowing, retaining views of specific hills or valleys (including Maori heritage sites) and retaining its environmental and cultural heritage (however brief it may seem to outsiders). These preferences are captured in major urban plans which set out acceptable terms for developments, but often even urban plans won’t contain enough zoned land to meet demand (see the bun fight over the Auckland Unitary Plan from 2016), and even then those plans took years to put together. This plays out in a strong community undercurrent and politicians of both stripes use scare campaigns about the horrors of inappropriate development. Anything two stories or over can count as ‘inappropriate’.
From a policy perspective there seems to be no understanding of the practical trade off between housing demand and conservation, except from economists outside the planning departments (see NZ Initative or Michael Reddell, ex RBNZ) or from the central government threatening to unwind urban plans.
The second issue is that NZ also has a lot of partly and wholly government owned and operated utilities (water supply, networks and wastewater; electricity and gas networks; electricity generation) and services provided under government monopolies required for new developments (roads, education, healthcare, and other social services). In many cases the entities charged with providing these services are capital and/or budget constrained and they don’t have the funds to provide major new capex works in the short to medium term. Furthermore, the revenues earned from providing these services are often inadequate to cover economic costs. For instance, water supply and wastewater is provided at below cost price in many cases in NZ, and in large parts of the country water supply is un-metered. And there is serious community opposition to either privatization or changes in tariffs. As a consequence though, capex projects in the water sector are effectively large donations of capital for no return for the water corporation. As is the case for virtually all roads, schools, or hospital projects, any of which could prevent or stall major new urban developments. So even if new land was zoned as ‘fit for development’ (which it won’t be), the entities required to facilitate that development don’t have the funds to do so and nobody else is allowed to fill that gap.
And yes, Palmerston North is still dull. But then people say that Switzerland is dull too. I’ve seen much worse.
In defense of McKinsey
That is the topic of my latest Bloomberg column, here is the opener:
The latest institution to take a big whack from the media, with its well-known negative bias, is McKinsey & Co. A recent article in The New York Times shows how much the consulting company has worked for authoritarian and autocratic countries, including China, Saudi Arabia and Russia.
I would instead frame this story in a broader and far more positive reality: One of the biggest, most positive (and most neglected) global trends over the last 30 years has been the spread of managerial and technocratic expertise to what used to be called “third world governments.” In most countries, the central banks, the public health authorities, the treasuries and many other public-sector institutions now collect good data, hire Western-educated advisers, and try to implement good solutions.
And:
…when I meet entrepreneurs in poorer parts of the world, I am often struck by the fact that they are highly intelligent and conscientious, but they don’t always understand all of the cultural codes of good management. Advice that might appear stupid or trivial to more experienced observers may actually help to build new cultures of business excellence and economic growth.
There is much more at the link. Here is a good tweet stream on the company. Here is the McKinsey response to the NYT article.
Deconstructing cultural codes
As I continue to do Conversations with Tyler, more people ask me about “the Tyler Cowen production function.” Well, here is one piece of it I don’t think I’ve written about or talked about before. I’m going to bring you there in slightly long-winded fashion, long-winded for a blog post that is.
I’ve long been convinced that “matters of culture” are central for understanding economic growth, but I’m also painfully aware these theories tend to lack rigor and even trying to define culture can waste people’s time for hours, with no satisfactory resolution.
So I thought I would tackle this problem sideways. I figured the best way to understand culture was to try to understand or “crack” as many cultural codes as possible. As many styles of art. As many kinds of music. As many complex novels, and complex classic books, and of course as many economic models as well. Religions, and religious books. Anthropological understandings. I also learned two languages in my adult years, German and Spanish (the former better than the latter). A bit later I realized that figuring out how an economic sector works — if only partially — was really not so different from cracking these other cultural codes. For instance, once I spent three days on a boat (as keynote speaker), exclusively with people from a particular segment of the shipping trade. It was like entering a whole new world and every moment of it was fascinating.
Eventually it seemed to me that problems of management were themselves a kind of cultural code, each one different of course.
And travel was the most potent form of this challenge, every new place a new culture to be unraveled and partially understood, and how much time was there to do that anyway?
It is very time-consuming — years-consuming — to invest in this skill of culture code cracking. But I have found it highly useful, most of all for various practical ventures and also for dealing with people, and for trying to understand diverse points of view and also for trying to pass intellectual Turing tests.
I am not recommending this you at any particular margin, or at the margin I have invested in. But if you ask me about the Tyler Cowen production function, every now and then I will tell you.
Addendum: It occurs to me that the number and diversity of cultural codes is increasing much faster than the ability of any individual to track them, much less master them. In this regard, an understanding of matters cultural is always receding from us.
My Conversation with Paul Romer
Here is the audio and transcript, Paul was in top form and open throughout. Yes economic growth, blah blah blah, but we covered many related topics too:
COWEN: And you also think we should simplify the English language. Right?
ROMER: [laughs] Well, there’s two parts to that. One is, in writing and communication, there should be a very high priority on clarity. It’s hard to know what’s the mechanism that enforces that. There are variants on English, like the English used to write the manuals people use to service airplanes, where there’s a very restricted vocabulary. The words are chosen so that you can’t have any ambiguity because you don’t want somebody servicing a plane to get confused. So there are some things you could do on writing, word choice, vocabulary, exposition.
There’s a separate issue, which is that amongst the modern languages, English has the worst orthography, the worst mapping between spelling and sounds of any of the existing languages. And it’s a tragedy because English is becoming the universal second language.
The incidence of people who don’t learn to read is substantially higher in English than in other languages. People have known for a long time, it takes longer to learn to read in English because of the bad orthography. But what hasn’t gotten enough attention is that there’s an effect on the variance as well. There are more people who never get over this hurdle to actually learning to read.
If there were a way to do in English what they’ve done in other languages, which is to clean up the orthography, that could make a huge difference in the variation associated with whether or not people can learn to read English.
And:
COWEN: Can a charter city work if we import good laws from the outside world but not the appropriate matching culture?
ROMER: You’ve zeroed right in on the connection. The real motivation that I had for charter cities was exactly this one that you can see in the US versus New Zealand. You can think of a charter city exercise . . .
This is actually the story of Maryland: We’re going to create laws, and we’re going to guarantee freedom of religion in Maryland, and it’s in the laws; it’s in the institution somehow. That didn’t turn out very well. Maryland had a Catholic elite but then large numbers of Protestant indentured servants or workers. And this kind of commitment to freedom of religion was not stable in Maryland at all.
The case that’s worth trying to copy is Pennsylvania, where William Penn recruited large numbers of people who actually believed in freedom of religion. The word charter comes from the charter that Penn wrote for Pennsylvania, but it wasn’t the document that mattered. What mattered was that there were a bunch of people in the founding population who were committed to this idea of a separation of church and state and religious freedom. And that’s what made it durable in Pennsylvania in a way it wasn’t in Maryland.
And this:
ROMER: …Moses was of this generation that was too enamored of the car, and this is where I think Jacobs had a better intuition. But the challenge, the dichotomy I would pose would be Jane Jacobs versus Gouverneur Morris.
Morris was the guy who drew the grid that laid out the rectangular street map for Manhattan.
We also discussed music, including Hot Tuna, Clarence White, and Paul’s favorite novel, dyslexia, what Paul has learned about management, and much more. Self-recommending, if there ever was such a thing.
Why is most travel writing so bad?
The most painful sections of a bookshop to have to read through would be the management books, self-help, and also the travel books. Yet management, self-help, and travel are all very important and indeed extremely interesting matters, so I am wondering why these books are so bad. Today let’s focus on travel.
My biggest complaint is that travel books seem not to discriminate between what the reader might care about or not. Here is a randomly chosen passage from a recent travel book of Jedidiah Jenkins:
We walked our bikes over one more bridge and into Tijuana. Weston was barefoot, which he noted out loud as we entered Mexico. We got on our bikes and rode into immediate chaos.
Or this:
I drank my coffee and read the news on my phone. I felt him sitting next to me.
Who cares? And who is Weston anyway? (Longer excerpts would not seduce you.) Yet this book — To Shake the Sleeping Self: A Journey from Oregon to Patagonia, and a Quest for a Life with No Regret — has 85 reviews on Amazon with an average of four and a half stars and it was a NYT bestseller.
Is travel like (some) sex, namely that you can’t write about it because it is viscerally exciting in a “you had to be there” way? Why cannot that constraint be overcome by shifting the focus to matters more factual?
Too many travel books seem like an inefficient blending of memoir, novel, and travel narration, and they are throughout too light on information. Ideally I want someone with a background in geography, natural history, or maybe urban studies to serve up a semi-rigorous account of what they are doing and seeing.
Here is one mood-affiliated blurb for the Jenkins book:
“A thrilling, tender, utterly absorbing book. With winning candor, Jedidiah Jenkins takes us with him as he bicycles across two continents and delves deeply into his own beautiful heart. We laugh. We cry. We feel the glory and the agony of his adventure; the monotony and the magic; the grace and the grit. Every page of this book made me ache to know what happened next. Every chapter shimmered with truth. It’s an unforgettable debut.”
—Cheryl Strayed, author of Wild and Tiny Beautiful Things
What do people want from travel books anyway? It seems the Jenkins work sold well because he is famous on Instagram, which may or may not correlate with book-writing skills.
Here is another randomly chosen passage:
I wait. I drink some more water. It sit in the grass and chat with the others. I have a few false starts: “Ooh, I’m feeling it…just kidding, no I’m not.” “Okay, now I am! No, that’s an ant on my ankle.”
Is the problem an absence of barriers to entry for writing travel books? That many books will sell automatically “by country” rather than because of the quality of their content, leading to an excessively segmented market? Other travel book readers seem to obsess over the mode of transportation, such as whether a particular trip was undertaken by bicycle. Are there too many celebrities and semi-celebrities trying their hand at a relatively easy-to-fudge literary genre?
What are the microfoundations for this failure in the quality of travel books?
Here are various lists of the best travel books of all time. Even there I find many overrated, noting that Elizabeth Gilbert is better than most.
If you are wondering, three of my favorite travel books are Robert Byron’s The Road to Oxiana, David G. Campbell, The Crystal Desert: Summers in Antarctica, and also Suketu Mehta, Maximum City: Bombay Lost and Found, perhaps the best travel book ever written.
Somebody — fix this problem!
What I’ve Been Watching
Bohemian Rhapsody—you already know the plot and it’s a tad long but the music is great and Rami Malek is fabulous as Freddie Mercury. The movie culminates with a virtually shot-by-shot recreation of the legendary Queen performance at Live Aid, considered by many to the greatest live performance in all of rock and roll. A little puzzling why they didn’t use the original. Worth seeing in the theater, if you don’t have a home theater.
Crazy Rich Asians – the all Asian cast made it notable and the shots of Singapore are great but it’s only average as a romantic comedy. The leads lack chemistry.
The Last Kingdom (Netflix)—I’ve watched all three Seasons and enjoyed them. Season 3, however, is beginning to lose its legs. The on-again, off-again love affair between King Alfred and Uhtred has worn its course and I swear I’ve seen the jump in the boats and row away under falling arrow scene more than once before. Still, it’s not boring.
Bodyguard (Netflix) —taut British thriller. I enjoyed it and at 6 episodes it’s less of an investment than some series.
Homecoming (Amazon Prime)—sold as a Julia Roberts endeavor. She’s fine but the real star is the mysterious atmospherics and unusual shots and edits. I didn’t realize till the end of the first episode that this was a Sam Esmail show. Ah, now it all makes sense. If you liked Mr. Robot, give it a shot. I haven’t finished the first season and I may not, so I can’t say for certain whether the investment is worthwhile.
Daredevil (Netflix) I have already mentioned. Now cancelled, despite a great third season.
The Man Who Would be King (Amazon Prime) – a John Huston classic featuring Sean Connery and Michael Caine. One of my favorites. Based on a story of Rudyard Kipling which was based on the true story of Josiah Harlan, Prince of Ghor.
At Eternity’s Gate: A stirring and powerful performance by Willem Dafoe as Van Gogh. Directed by Julian Schnabel, himself a noted artist. The camera work–meant to convey a “you are there” point of view and also the sometime madness of Van Gogh–was disconcertingly jumpy at times. Schnabel would have done better stepping back and placing more trust on Dafoe’s performance and also the cinematography of Benoît Delhomme. Oddly, Schnabel insists Van Gogh was murdered when suicide is the accepted account and one that rings true, even to the film itself.
Machines (Amazon Prime)–an excellent documentary illustrating a day in the life of a textile factory in Gujurat, India. The pictures do the work, very little commentary. Dickensian. Especially striking to an economist , how inefficiently the factory is being run. Quality control, inventory management and maintenance are clearly atrocious. I am reluctant to claim something is inefficient but we have strong experimental evidence that management quality in these firms is very low and that better management could more than pay for itself.
What I’ve been reading
1. Santiago Levy, Under-Rewarded Efforts: The Elusive Quest for Prosperity in Mexico. Probably the best current book on Mexico’s economy and why it has not grown more rapidly. Most of all, Levy blames misallocation, and more specifically the attachment of too many workers to the low-productivity informal sector. The author notes (p.34) that both the top 20 percent of the wage distribution, or even the top 1 percent, saw no wage growth from 1996 to 2015.
2. Sriya Iyer, The Economics of Religion in India. A useful survey, which delivers on what the title promises.
3. Howard Sounes, Fab: An Intimate Life of Paul McCartney. One of my favorite biographies, this book is also excellent on outlining the history of the Beatles (and subsequent McCartney groups) as problems in the theory and practice of management. I now have ordered the author’s other books on music history.
4. Jeffrey D. Sachs, A New Foreign Policy: Beyond American Exceptionalism. This book is somewhat less radical than I had been expecting, mostly concentrating on the potential gains from multilateralism, international cooperation, and international law. Or is that the truly radical view?
5. Roger Scruton, Music as an Art. The chapter on Schubert is the highlight, and perhaps the best explanation of that composer’s beauty and importance. The book is otherwise high variance, with the remarks on morals and aesthetic philosophy much weaker. At times he pops open an insight when it is least expected, such as on heavy metal music: “In the realm of pop they were the modernists, undergoing in their own way that revolution against kitsch and cliche that had set Schoenberg and Adorno on the path towards 12-tone serialism.”
Helene Rosenblatt, The Lost History of Liberalism: From Ancient Rome to the Twenty-First Century, presents liberals as moralists and debunks the notion of liberalism as so exclusively an Anglo-American phenomenon.
Dean Keith Simonton, The Genius Checklist: Nine Paradoxical Tips on How You! Can Become a Creative Genius, is a popularization of some of his earlier research on genius and creative achievement.
Notable is Stephen L. Carter’s new biography of his grandmother, Invisible: The Forgotten Story of the Black Woman Lawyer Who Took Down America’s Most Powerful Mobster.
My Conversation with Michele Gelfand
Here is the audio and transcript, and here is the summary:
Michele Gelfand is professor of psychology at the University of Maryland and author of the just-released Rule Makers, Rule Breakers: How Tight and Loose Cultures Wire Our World. In her conversation with Tyler, Michele unpacks the concept of tight and loose cultures and more, including which variable best explains tightness, the problem with norms, whether Silicon Valley has an honor culture, the importance of theory and history in guiding research, what Donald Trump gets wrong about negotiation, why MBAs underrate management, the need to develop cultural IQ, and why mentorship should last a lifetime.
Here is one excerpt:
COWEN: As you know, it’s a common distinction in cross-cultural analysis to call some cultures individualistic and others collectivistic. How does tightness and looseness differ from that distinction? What do you pick up that, say, the work of Triandis does not?
GELFAND: Actually, Triandis is my mentor. I went to Champaign to work with him. I did a lot of research on collectivism and individualism. For a long time, that was the one dimension that we looked at in cross-cultural psychology.
It’s almost akin to, in personality psychology, only studying extroversion to the neglect of other dimensions, like neuroticism. In cross-cultural psychology, we got a little bit narrow in what we were studying. Collectivism-individualism is related to tightness but distinct.
Part of the problem we’ve had is, we’ve confounded cultures in our research. We’ve been studying East Asia, which is both tight and collectivistic, with the United States and other Western cultures, which tend to be loose and individualistic. So they have been confounded.
But when you think about the off-diagonals of that two-by-two, you can imagine cultures like Germany, Switzerland, Austria that tend to be pretty individualistic. They emphasize privacy. They’re not hugely group and family oriented, but they’re relatively tight. They have strong rules and punishments for deviance.
On the flip side, you can think about Latin American cultures — in our data, that’s Brazil or Spain — that tend to be pretty family oriented and pretty collectivistic, but they’re rather loose.
In a lot of ways, you can disentangle that variation, even if they’re related. They tend to be related about 0.4. That’s found both in modern nations and also traditional societies. At the state level, they also tend to be related but again distinct. Only in that case, it’s about 0.2 or 0.3, the correlation between tightness and collectivism.
And:
COWEN: Overrated or underrated, Staten Island?
GELFAND: [laughs] I would say probably underrated. That’s because I actually am familiar with Staten Island. We have relatives that live there. It’s probably the last undiscovered place around the city. Brooklyn has become a chichi place to live, but Staten Island has not. There’s great delis there. I’ve spent some time there.
And:
COWEN: Putting aside your political views, but just if you observe Donald Trump as a negotiator — as a psychologist, what strikes you?
GELFAND: Donald Trump has a very classic negotiation style. It’s a distributive negotiation style. It’s a win-lose style. It works in certain contexts, especially contexts where there’s one issue or when there’s very little expected future interaction.
What Donald Trump does is, he takes that style to international [laughs] politics where these contexts, the structure of these situations is very different. There’s usually many issues at the table. There’s expected future interaction…His style is really mismatched with the context that he’s in.
Many of the best parts are at or near the end, so do read or listen all the way through. And you can buy Michele’s book here.
My Fall Industrial Organization reading list
This is only part one for the class, do not panic over whatever you think might be completely left out. That said, suggested additions are welcome, here goes:
Competition
Bresnahan, Timothy F. “Competition and Collusion in the American Automobile Industry: the 1955 Price War,” Journal of Industrial Economics, 1987, 35(4), 457-82.
Bresnahan, Timothy and Reiss, Peter C. “Entry and Competition in Concentrated Markets,” Journal of Political Economy, (1991), 99(5), 977-1009.
Asker, John, “A Study of the Internal Organization of a Bidding Cartel,” American Economic Review, (June 2010), 724-762.
Whinston, Michael D., “Antitrust Policy Toward Horizontal Mergers,” Handbook of Industrial Organization, vol.III, chapter 36, see also chapter 35 by John Sutton.
“Benefits of Competition and Indicators of Market Power,” Council of Economic Advisors, April 2016.
Jan De Loecker and Jan Eeckhout, “The Rise of Market Power and its Macroeconomic Implications,” http://www.janeeckhout.com/wp-content/uploads/RMP.pdf. My comment on it is here: https://marginalrevolution.com/marginalrevolution/2017/08/rise-market-power.html
Me on intangible capital, https://marginalrevolution.com/marginalrevolution/2017/09/intangible-investment-monopoly-profits.html.
Traina, James. “Is Aggregate Market Power Increasing?: Production Trends Using Financial Statements,” https://research.chicagobooth.edu/-/media/research/stigler/pdfs/workingpapers/17isaggregatemarketpowerincreasing.pdf
Shapiro, Carl. “Antitrust in a Time of Populism.” UC Berkeley, working draft from 24 October 2017, forthcoming in International Journal of Industrial Organization.
Klein, Benjamin and Leffler, Keith. “The Role of Market Forces in Assuring Contractual Performance.” Journal of Political Economy 89 (1981): 615-641.
Breit, William. “Resale Price Maintenance: What do Economists Know and When Did They Know It?” Journal of Institutional and Theoretical Economics (1991).
Bogdan Genchev, and Julie Holland Mortimer. “Empirical Evidence on Conditional Pricing Practices.” NBER working paper 22313, June 2016.
Sproul, Michael. “Antitrust and Prices.” Journal of Political Economy (August 1993): 741-754.
McCutcheon, Barbara. “Do Meetings in Smoke-Filled Rooms Facilitate Collusion?” Journal of Political Economy (April 1997): 336-350.
Crandall, Robert and Winston, Clifford, “Does Antitrust Improve Consumer Welfare?: Assessing the Evidence,” Journal of Economic Perspectives (Fall 2003), 3-26, available at http://www.brookings.org/views/articles/2003crandallwinston.htm.
FTC, Bureau of Competition, website, http://www.ftc.gov/bc/index.shtml., an optional browse, perhaps read about some current cases and also read the merger guidelines.
Parente, Stephen L. and Prescott, Edward. “Monopoly Rights: A Barrier to Riches.” American Economic Review 89, 5 (December 1999): 1216-1233.
Demsetz, Harold. “Why Regulate Utilities?” Journal of Law and Economics (April 1968): 347-359.
Armstrong, Mark and Sappington, David, “Recent Developments in the Theory of Regulation,” Handbook of Industrial Organization, chapter 27, also on-line.
Shleifer, Andrei. “State vs. Private Ownership.” Journal of Economic Perspectives (Fall 1998): 133-151.
Xavier Gabaix and David Laibson, “Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets,” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=728545.
Strictly optional most of you shouldn’t read this: Ariel Pakes and dynamic computational approaches to modeling oligopoly: http://www.economics.harvard.edu/faculty/pakes/files/Pakes-Fershtman-8-2010.pdf
http://www.economics.harvard.edu/faculty/pakes/files/handbookIO9.pdf
Economics of Tech
Farrell, Joseph and Klemperer, Paul, “Coordination and Lock-In: Competition with Switching Costs and Network Effects,” Handbook of Industrial Organization, vol.III, chapter 31, also on-line.
Weyl, E. Glenn. “A Price Theory of Multi-Sided Platforms.” American Economic Review, September 2010, 100, 4, 1642-1672.
Tech companies as platforms, Tyler Cowen chapter, to be distributed.
Gompers, Paul and Lerner, Josh. “The Venture Capital Revolution.” Journal of Economic Perspectives (Spring 2001): 145-168.
Paul Graham, essays, http://www.paulgraham.com/articles.html, and on Google itself, http://www.slate.com/blogs/blogs/thewrongstuff/archive/2010/08/03/error-message-google-research-director-peter-norvig-on-being-wrong.aspx
Acemoglu, Daron and Autor, David, “Skills, Tasks, and Technologies: Implications for Employment and Earnings,” http://econ-www.mit.edu/files/5607
Robert J. Gordon and Ian Dew-Becker, “Unresolved Issues in the Rise of American Inequality,”http://www.people.fas.harvard.edu/~idew/papers/BPEA_final_ineq.pdf
Song, Jae, David J. Price, Fatih Guvenen, and Nicholas Bloom. “Firming Up Inequality,” CEP discussion Paper no. 1354, May 2015.
Andrews, Dan, Chiara Criscuolo and Peter N. Gal. “Frontier firms, Technology Diffusion and Public Policy: Micro Evidence from OECD Countries.” OECD working paper, 2015.
Mueller, Holger M., Paige Ouimet, and Elena Simintzi. “Wage Inequality and Firm Growth.” Centre for Economic Policy Research, working paper 2015.
Readings on blockchain governance, to be distributed.
Haltiwanger, John, Ian Hathaway, and Javier Miranda. “Declining Business Dynamism in the U.S. High-Technology Sector.” Ewing Marion Kauffman Foundation, February 2014.
Organization and capital structure
Ronald Coase and Oliver Williamson on the firm, if you haven’t already read them, but limited doses should suffice.
Gibbons, Robert, “Four Formal(izable) Theories of the Firm,” on-line at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=596864.
Van den Steen, Eric, “Interpersonal Authority in a Theory of the Firm,” American Economic Review, 2010, 100:1, 466-490.
Lazear, Edward P. “Leadership: A Personnel Economics Approach,” NBER Working Paper 15918, 2010.
Oyer, Paul and Schaefer, Scott, “Personnel Economics: Hiring and Incentives,” NBER Working Paper 15977, 2010.
Tyler Cowen chapter on CEO pay, to be distributed.
Cowen, Tyler, Google lecture on prizes, on YouTube.
Ben-David, Itzhak, and John R. Graham and Campbell R. Harvey, “Managerial Miscalibration,” NBER working paper 16215, July 2010.
Glenn Ellison, “Bounded rationality in Industrial Organization,” http://cemmap.ifs.org.uk/papers/vol2_chap5.pdf
Miller, Merton, and commentators. “The Modigliani-Miller Propositions After Thirty Years,” and comments, Journal of Economic Perspectives (Fall 1988): 99-158.
Myers, Stewart. “Capital Structure.” Journal of Economic Perspectives (Spring 2001): 81-102.
Hansemann, Henry. “The Role of Non-Profit Enterprise.” Yale Law Journal (1980): 835-901.
Kotchen, Matthew J. and Moon, Jon Jungbien, “Corporate Social Responsibility for Irresponsibility,” NBER working paper 17254, July 2011.
Strictly optional but recommended for the serious: Ponder reading some books on competitive strategy, for MBA students. Here is one list of recommendations: http://www.linkedin.com/answers/product-management/positioning/PRM_PST/20259-135826
Production
American Economic Review Symposium, May 2010, starts with “Why do Firms in Developing Countries Have Low Productivity?” runs pp.620-633.
Dani Rodrik, “A Surprising Convergence Result,” http://rodrik.typepad.com/dani_rodriks_weblog/2011/06/a-surprising-convergence-result.html, and his paper here http://www.hks.harvard.edu/fs/drodrik/Research%20papers/The%20Future%20of%20Economic%20Convergence%20rev2.pdf
Serguey Braguinsky, Lee G. Branstetter, and Andre Regateiro, “The Incredible Shrinking Portuguese Firm,” http://papers.nber.org/papers/w17265#fromrss.
Nicholas Bloom, Raffaella Sadun, and John Van Reenen, “Recent Advances in the Empirics of Organizational Economics,” http://cep.lse.ac.uk/pubs/download/dp0970.pdf.
Nicholas Bloom, Raffaella Sadun, and John Van Reenen, the slides for “Americans do I.T. Better: US Multinationals and the Productivity Miracle,” http://www.people.hbs.edu/rsadun/ADITB/ADIBslides.pdf, the paper is here http://www.stanford.edu/~nbloom/ADIB.pdf but I recommend focusing on the slides.
Bloom, Nicholas, Raffaella Sadun, and John Van Reenen. “Management as a Technology?” National Bureau of Economic Research working paper 22327, June 2016.
Syerson, Chad “What Determines Productivity?” Journal of Economic Literature, June 2011, XLIX, 2, 326-365.
David Lagakos, “Explaining Cross-Country Productivity Differences in Retail Trade,” Journal of Political Economy, April 2016, 124, 2, 1-49.
Casselman, Ben. “Corporate America Hasn’t Been Disrupted.” FiveThirtyEight, August 8, 2014.
Decker, Ryan and John Haltiwanger, Ron S. Jarmin, and Javier Miranda. “Where Has all the Skewness Gone? The Decline in High-Growth (Young) Firms in the U.S. National Bureau of Economic Research working paper 21776, December 2015.
Furman, Jason and Peter Orszag. “A Firm-Level Perspective on the Role of Rents in the Rise in Inequality.” October 16, 2015.
http://evansoltas.com/2016/05/07/pro-business-reform-pro-growth/
Furman, Jason. ”Business Investment in the United States: Facts, Explanations, Puzzles, and Policy.” Remarks delivered at the Progressive Policy Institute, September 30, 2015, on-line at https://m.whitehouse.gov/sites/default/files/page/files/20150930_business_investment_in_the_united_states.pdf.
Scharfstein, David S. and Stein, Jeremy C. “Herd Behavior and Investment.” American Economic Review 80 (June 1990): 465-479.
Stein, Jeremy C. “Efficient Capital Markets, Inefficient Firms: A Model of Myopic Corporate Behavior.” Quarterly Journal of Economics 104 (November 1989): 655-670.
Sectors: finance, health care, education, others
Gorton, Gary B. “Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007,” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1401882, published on-line in 2009.
Erel, Isil, Nadault, Taylor D., and Stulz, Rene M., “Why Did U.S. Banks Invest in Highly-Rated Securitization Tranches?” NBER Working Paper 17269, August 2011.
Healy, Kieran. “The Persistence of the Old Regime.” Crooked Timber blog, August 6, 2014.
More to be added, depending on your interests.
What are the best analyses of small, innovative, productive groups?
Shane emails me:
Hello!
What have you found to be the best books on small, innovative, productive groups?
These could be in-depth looks at specific groups – such as The Idea Factory, about Bell Labs – or they could be larger studies of institutions, guilds, etc.
I suggest reading about musical groups and sports teams and revolutions in the visual arts, as I have mentioned before, taking care you are familiar with and indeed care passionately about the underlying area in question. Navy Seals are another possible option for a topic area. In sociology there is network theory, but…I don’t know. In any case, the key is to pick an area you care about, and read in clusters, rather than hoping to find “the very best book.” The very theory of small groups predicts this is how you should read about small groups!
But if you must start somewhere, Randall Collins’s The Sociology of Philosophies is probably the most intensive and detailed place to start, too much for some in fact and arguably the book strains too hard at its target.
I have a few observations on what I call “small group theory”:
1. If you are seeking to understand a person you meet, or might be hiring, ask what was the dominant small group that shaped the thinking and ideas of that person, typically (but not always) at a young age. Step #1 is often “what kind of regional thinker is he/she?” and step #2 is this.
2. If you are seeking to foment change, take care to bring together people who have a relatively good chance of forming a small group together. Perhaps small groups of this kind are the fundamental units of social change, noting that often the small groups will be found within larger organizations. The returns to “person A meeting person B” arguably are underrated, and perhaps more philanthropy should be aimed toward this end.
3. Small groups (potentially) have the speed and power to learn from members and to iterate quickly and improve their ideas and base all of those processes upon trust. These groups also have low overhead and low communications overhead. Small groups also insulate their members sufficiently from a possibly stifling mainstream consensus, while the multiplicity of group members simultaneously boosts the chances of drawing in potential ideas and corrections from the broader social milieu.
4. The bizarre and the offensive have a chance to flourish in small groups. In a sense, the logic behind an “in joke” resembles the logic behind social change through small groups. The “in joke” creates something new, and the small group can create something additionally new and in a broader and socially more significant context, but based on the same logic as what is standing behind the in joke.
5. How large is a small group anyway? (How many people can “get” an inside joke?) Has the internet made “small groups” larger? Or possibly smaller? (If there are more common memes shared by a few thousand people, perhaps the small group needs to be organized around something truly exclusive and thus somewhat narrower than in times past?)
6. Can a spousal or spouse-like couple be such a small group? A family (Bach, Euler)?
7. What are the negative social externalities of such small groups, compared to alternative ways of generating and evaluating ideas? And how often in life should you attempt to switch your small groups?
8. What else should we be asking about small groups and the small groups theory of social change?
9. What does your small group have to say about this?
I thank an anonymous correspondent — who adheres to the small group theory — for contributions to this post.
Thursday assorted links
1. Arvind Subramaniam is stepping down from the Indian CEA.
2. The communication ethics of Mister Rogers. And free behavioral economics guide for 2018.
3. The “silly walk” Monty Python culture that is Norwegian traffic management. And what does stand-up comedy in LA pay?
4. “Feulner’s first law is people are policy,” (NYT)
5. The impregnation culture that is Burger King Russia.
6. Amazon and government (WSJ).
Monday assorted links
1. Brief for an inclusive anti-canon (in philosophy, and otherwise). And a transcendental argument for liberalism.
2. Krugman on the possibility of a trade war.
4. Applying Moneyball techniques to team chemistry in sports — also the next frontier for management?
Towards An International Court of Smart Contract Arbitration
Firms involved in international commerce routinely contract that disputes are to be resolved by private courts of arbitration such as the International Court of Arbitration, the London Court of International Arbitration or the Singapore International Arbitration Center. These courts of arbitration compete for clients and thus have an incentive to resolve disputes fairly, quickly and inexpensively. Courts compete, for example, to provide arbiters who are experts not simply in the law but in the relevant area of commerce. The New York Convention of 1958 says that private arbitration decisions will be enforced by the national courts of any of the 159 signatories; thus private arbitration leverages national enforcement but is otherwise not tethered to national law (e.g. in US see, Mitsubishi v. Soler Chrysler, National Oil v. Libyan Sun). Over time private courts of international arbitration have developed a system of law that transcends nations, an anational law–this is the new lex mercatoria.
I propose that courts analogous to the courts of arbitration that govern international commerce be created to govern smart contracts in virtual space. Arbitration of smart contracts will develop a new private law that will evolve to meet the needs of virtual commerce, a true lex cryptographia. At first, it might seem contradictory to advocate for courts of smart contracts and the development of lex cryptographia. Isn’t the whole point of smart contracts that no courts or lawyers are needed? Similarly, lex cryptographia is usually understood to refer to the smart contracts themselves–code is law–rather than to law governing such contracts. In fact, it is neither desirable nor possible to divorce smart contracts from law.
Smart contracts execute automatically but only simple contracts such as those involving escrow are really self-enforcing. Most contracts, smart or dumb, involve touchstones with the real world. Canonical examples such as the smart contract that lets you use an automobile so long as the rent has been paid illustrate the potential for disputes. Bugs in the code? Disputes over the quality of the car? What happens when a data feed is disputed or internet service is disrupted? Smart contracts applied to the real world are a kind of digital rights management with all of DRMs problems and annoyances.
Some of these problems can be dealt with online using decentralized mechanisms. But we don’t yet know which decentralized mechanisms are robust or cost-effective. Moreover, when marveling at the wisdom of crowds we should not forget the wisdom of experts. Nick Szabo once remarked that if contract law was suddenly forgotten it would take hundreds of years to recover the embedded wisdom. Contract law, for example, is filled with concepts like mistake, misrepresentation, duress, negligence and intention that are not easily formalized in code. Contract law is a human enterprise. And the humans who write contracts want law with terms like negligence precisely because these terms fill in for gaps which cannot be filled in and formalized in contracts let alone in code.
I am enthusiastic about smart contracts on blockchains. Smart contracts will significantly reduce transaction costs and thus let people create valuable, new private orderings. But it will be more profitable to integrate law and code than to try to replace law with code. Integration will require new ways of thinking. The natural language version of a contract–what the parties intend to agree to–may not map precisely to the coded version. Arbiters will be called in to adjudicate and thus will have to be experts in code as well as in law. Smart contracts can be made by anonymous parties who may want a dispute resolved not just privately but anonymously. Smart contracts can be designed with escrow and multisignatory authority so arbiters will also become decision enforcers. All of these issues and many more will have to be understood and new procedures and understandings developed. The competitive market process will discover novel uses for smart contracts and the competitive market process among arbiters will discover novel law. Law will adjust to business practice and business practice to law.
In short, the best way to create a vital new lex cryptographia is through competitive, private arbitration built on the model that already governs international commerce.
How much is deep sea fishing subsidized?
While the ecological impacts of fishing the waters beyond national jurisdiction (the “high seas”) have been widely studied, the economic rationale is more difficult to ascertain because of scarce data on the costs and revenues of the fleets that fish there. Newly compiled satellite data and machine learning now allow us to track individual fishing vessels on the high seas in near real time. These technological advances help us quantify high-seas fishing effort, costs, and benefits, and assess whether, where, and when high-seas fishing makes economic sense. We characterize the global high-seas fishing fleet and report the economic benefits of fishing the high seas globally, nationally, and at the scale of individual fleets. Our results suggest that fishing at the current scale is enabled by large government subsidies, without which as much as 54% of the present high-seas fishing grounds would be unprofitable at current fishing rates. The patterns of fishing profitability vary widely between countries, types of fishing, and distance to port. Deep-sea bottom trawling often produces net economic benefits only thanks to subsidies, and much fishing by the world’s largest fishing fleets would largely be unprofitable without subsidies and low labor costs. These results support recent calls for subsidy and fishery management reforms on the high seas.
Emphasis added, that is by Enric Sala, et.al., via Anecdotal.