Thursday, July 31, 2008
Hal Varian on Technology
What is the role of technology in everyday lives? Can we predict the paths of innovation? What can economists contribute in this technology driven era? Hal Varian, Google's Chief Economist and UC Berkeley Professor has his own thoughts.
Saturday, June 7, 2008
Chicago Conference on China
1991 Nobel Laureate Ronald Coase will organize an international conference on China's Economic Transformation this July. Steven N. S. Cheung is also invited to give a keynote speech there, talking about his most recent paper, titled, "The Economic System of China".
Although this paper has not been put onto the conference website, here is some clue. As Cheung argued for himself, "...section three of this paper generalizes the concept of contract, by far nobody in the field of institutional economics has reached that far...". Let's hope!
Although this paper has not been put onto the conference website, here is some clue. As Cheung argued for himself, "...section three of this paper generalizes the concept of contract, by far nobody in the field of institutional economics has reached that far...". Let's hope!
Friday, May 23, 2008
Are Humans Unique?
According to an article in the latest issue of NewScientist, we humans are not special as we used to believe since we now know better. We are not the only species that feels emotions, empathises with others or abides by a moral code. Neither are we the only ones with personalities, cultures and the ability to design and use tools. Yet we have steadfastly clung to the notion that one attribute, at least, makes us unique: we alone have the capacity for language.
Some recent research has revealed that six seemingly "uniquely" human traits are already found in animals (here), and that animals can even "possess" some human abilities (here).
Some recent research has revealed that six seemingly "uniquely" human traits are already found in animals (here), and that animals can even "possess" some human abilities (here).
Bless Sichuan, Bless My Hometown
The 5.12 earthquake has already killed more than 60,000 people in Sichuan province. Being very close to the epicenter, my hometown city, Mianzhu, is severely damaged. More than 10,000 civilians lost their lives in this devastating earthquake. One of my aunts, a beloved wife and mother, also died in the disaster. To me, she was always kind, generous and supportive. May she rest in peace in a rainbow heaven!
May God bless everyone in Sichuan!
May God bless everyone in Sichuan!
Sunday, May 4, 2008
The Mystery of Monogamy
Three economics professors from Hebrew University published an interesting paper on the American Economic Review, examining why developed societies are monogamous while rich men throughout history have typically practiced polygyny.
Wealth inequality naturally produces multiple wives for rich men in a standard model of the marriage market. However, we demonstrate that higher female inequality in the marriage market reduces polygyny. Moreover, we show that female inequality increases in the process of development as women are valued more for the quality of their children than for the quantity. Consequently, male inequality generates inequality in the number of wives per man in traditional societies, but manifests itself as inequality in the quality of wives in developed societies.
As summarized by Mahalanobis, the main empirical prediction is that the composition of inequality, not just the level, is an important determinant of the degree of polygyny in society. Specifically, societies should be more polygynous in countries where variation in overall wealth inequality is determined more by differences in nonlaber income (capital and inherited wealth) versus income variation generated by differences in the levels and returns to human capital investments.
Worth a read.
Wealth inequality naturally produces multiple wives for rich men in a standard model of the marriage market. However, we demonstrate that higher female inequality in the marriage market reduces polygyny. Moreover, we show that female inequality increases in the process of development as women are valued more for the quality of their children than for the quantity. Consequently, male inequality generates inequality in the number of wives per man in traditional societies, but manifests itself as inequality in the quality of wives in developed societies.
As summarized by Mahalanobis, the main empirical prediction is that the composition of inequality, not just the level, is an important determinant of the degree of polygyny in society. Specifically, societies should be more polygynous in countries where variation in overall wealth inequality is determined more by differences in nonlaber income (capital and inherited wealth) versus income variation generated by differences in the levels and returns to human capital investments.
Worth a read.
The Intellectual Portrait Series
...from The Online Library of Liberty.This Intellectual Portrait Series features several interviews with some of the most notable economists and leading classical liberal figures of our time, including Milton Friedman, James Buchanan (part I, II), Ronald Coase, Armen Alchian and Gary Becker. This series also has an one hour summary of the life and thought of Friedrich A. Hayek.
Friday, May 2, 2008
Economics makes you selfish??
As Ray Fisman puts forward on Forbes: We are what we learn.
"Exposed to these (Milton Friedman and Ayn Rand's) compelling intellectual frameworks, which emphasize market efficiency and model human behavior as driven primarily by rational self-interest, do students become more selfish?
It is not easy to measure the effect of indoctrination (or, more euphemistically, "learning"). Students don't randomly decide to study, for example, economics rather than French literature. Perhaps the econ majors were efficiency fanatics to begin with.
Except, it turns out, at Yale Law School. All students are required to take courses in contracts and in torts, and they're randomly assigned to an instructor for each class. Some of these teachers have Ph.D.s in economics, some in philosophy and other humanities, and some have no strong disciplinary allegiances at all. Professors are encouraged to design their courses as they see fit. Instructors from economics may emphasize the role of contracts in making possible the efficiency gains of the marketplace, while philosophers may emphasize equal outcomes for contracting parties. So economists teach about efficiency and philosophers teach about equality.
To figure out whether this affected their young charges, we put 70 Yale Law students in a computer lab, and had them play a game that would reveal to us their views on fairness...It turns out that exposure to economics makes a big difference in how students split the pie, in terms of both efficiency and outright selfishness. Students assigned to classes taught by economists were more likely to give a lot when it was cheap to do so. But they were also much more likely to take the whole pie for themselves.
These findings hint at the influence that powerful ideas may have in shaping how we see the world, even late in life. It's also a sobering message for teachers such as myself. The students in my classroom will venture forth into the world of business and management, carrying with them some of the viewpoints and attitudes that I choose to emphasize in my lectures. Students learn much more than the facts; what we choose to communicate to them is a responsibility not to be taken lightly."
Hat tip to Mankiw.
"Exposed to these (Milton Friedman and Ayn Rand's) compelling intellectual frameworks, which emphasize market efficiency and model human behavior as driven primarily by rational self-interest, do students become more selfish?
It is not easy to measure the effect of indoctrination (or, more euphemistically, "learning"). Students don't randomly decide to study, for example, economics rather than French literature. Perhaps the econ majors were efficiency fanatics to begin with.
Except, it turns out, at Yale Law School. All students are required to take courses in contracts and in torts, and they're randomly assigned to an instructor for each class. Some of these teachers have Ph.D.s in economics, some in philosophy and other humanities, and some have no strong disciplinary allegiances at all. Professors are encouraged to design their courses as they see fit. Instructors from economics may emphasize the role of contracts in making possible the efficiency gains of the marketplace, while philosophers may emphasize equal outcomes for contracting parties. So economists teach about efficiency and philosophers teach about equality.
To figure out whether this affected their young charges, we put 70 Yale Law students in a computer lab, and had them play a game that would reveal to us their views on fairness...It turns out that exposure to economics makes a big difference in how students split the pie, in terms of both efficiency and outright selfishness. Students assigned to classes taught by economists were more likely to give a lot when it was cheap to do so. But they were also much more likely to take the whole pie for themselves.
These findings hint at the influence that powerful ideas may have in shaping how we see the world, even late in life. It's also a sobering message for teachers such as myself. The students in my classroom will venture forth into the world of business and management, carrying with them some of the viewpoints and attitudes that I choose to emphasize in my lectures. Students learn much more than the facts; what we choose to communicate to them is a responsibility not to be taken lightly."
Hat tip to Mankiw.
Wednesday, April 30, 2008
After Stepping Down...
Freakonomist Steven Levitt stepped down as the editor of one of the most prestigious academic journals in economics, Journal of Political Economy, a few weeks ago. Here is his earlier message to economists and here is a story describing how he was treated after stepping down...
Three Podcasts from Science & the City
Science & the City has three interesting podcasts:
The first one is Future of the Stockmarket, in which investors, economists, and quantitative finance experts discuss how technological innovations have hastened the growth of the markets.
The second piece is Physics of the Impossible. The cofounder of string field theory offers a scientific exploration of the world of phasers, force fields, teleportation, and time travel.
In Distortions of Memory, experts in language, literature, neuroscience, philosophy, and psychoanalysis discuss what is known about how we store and subsequently recall the past.
The first one is Future of the Stockmarket, in which investors, economists, and quantitative finance experts discuss how technological innovations have hastened the growth of the markets.
The second piece is Physics of the Impossible. The cofounder of string field theory offers a scientific exploration of the world of phasers, force fields, teleportation, and time travel.
In Distortions of Memory, experts in language, literature, neuroscience, philosophy, and psychoanalysis discuss what is known about how we store and subsequently recall the past.
Wednesday, April 16, 2008
Henderson on Strategy and Sustainability
MIT Sloan School Professor Rebecca Henderson had a nice talk on what firms should do to implement strategy around sustainability, and why it is so hard to do new things in old organizations.
"...companies looking to act in fundamentally different ways, says Henderson, must prepare for overload, accepting and managing the fact that the business will be 'worse before better.' Becoming unstuck, says Henderson, means, measuring capacity, tracking resources, finding time to step back and make decisions, demonstrating a commitment at all levels of the company, and having serious conversations, from the mind and from the heart. In sustainability, concludes Henderson, we 'need to break the logjam between overload and strategy,' and we 'need to be very precise about what we want to do.'"
"...companies looking to act in fundamentally different ways, says Henderson, must prepare for overload, accepting and managing the fact that the business will be 'worse before better.' Becoming unstuck, says Henderson, means, measuring capacity, tracking resources, finding time to step back and make decisions, demonstrating a commitment at all levels of the company, and having serious conversations, from the mind and from the heart. In sustainability, concludes Henderson, we 'need to break the logjam between overload and strategy,' and we 'need to be very precise about what we want to do.'"
Monday, April 7, 2008
Another Empirical Review on the Boundary of the Firm
We had this post last September. Francine Lafontaine and Margaret Slade had a superb review paper on vertical integration titled "Vertical Integration and Firm Boundaries: The Evidence", which appeared in the Journal of Economic Literature (Non-gated version here).
A few months later, Kellogg professor Thomas Hubbard also published a paper on the same topic. "Viewpoint: Empirical research on firms' boundaries" appears in the current issue of the Canadian Journal of Economics. Instead of going through and summarizing all the major empirical work in the fields, like Lafontaine and Slade did last year, most of Hubbard's discussion concerns empirical work that is related to three key theoretical insights that build from each other, i.e. , relationship-specific investments, residual control rights and correlated organizational variables. Worth a read.
Hat tip to Organizations and Markets.
A few months later, Kellogg professor Thomas Hubbard also published a paper on the same topic. "Viewpoint: Empirical research on firms' boundaries" appears in the current issue of the Canadian Journal of Economics. Instead of going through and summarizing all the major empirical work in the fields, like Lafontaine and Slade did last year, most of Hubbard's discussion concerns empirical work that is related to three key theoretical insights that build from each other, i.e. , relationship-specific investments, residual control rights and correlated organizational variables. Worth a read.
Hat tip to Organizations and Markets.
Evidence on The Future of Economics
...via Marginal Revolution. Here is the paper.
In a nutshell: This short paper collects and studies the CVs of 112 assistant professors in the top-ten American departments of economics. The paper treats these as a glimpse of the future. We find evidence of a strong brain drain. We find also a predominance of empirical work.
In a nutshell: This short paper collects and studies the CVs of 112 assistant professors in the top-ten American departments of economics. The paper treats these as a glimpse of the future. We find evidence of a strong brain drain. We find also a predominance of empirical work.
Olin School: My Next Trip
I am going to join Olin School, Washington University this August to pursue my doctorate in Business Strategy there! The possibility that I would work with Professors Jackson Nickerson, Todd Zenger and Nicholas Argyres in the near future really makes me feel excited!
Any suggestions?
Any suggestions?
Sunday, March 30, 2008
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