The Mises Institute has just released a new edition of Hayek's early works on economic theory, Prices and Production and Other Works: F. A. Hayek on Money, the Business Cycle, and the Gold Standard, edited and introduced by Joe Salerno. It collects the monographs Prices and Production, Monetary Theory and the Trade Cycle, and Monetary Nationalism and International Stability, along with the important essays "The Paradox of Saving," "Reflections on the Pure Theory of Money of Mr. J.M. Keynes," "The Mythology of Capital," and "Investment That Raises the Demand for Capital." These works, written between 1929 and 1937, established Hayek's reputation as one of the great technical economists of his day, and the leading opponent of Keynes in monetary and business-cycle theory. Ironically, Hayek is mostly known today for his popular writings, particularly The Road to Serfdom, and for his later work on knowledge, evolution, and social theory. It is often forgotten that he was first and foremost an economic theorist.

Here is a detailed Hayek bibliography (through 1982) compiled by Leonard Liggio. Here's a biographical essay written by yours truly. Here is the home page of the Collected Works of F. A. Hayek (and a pointer to my favorite volume). And it's never too early to begin preparations for this important holiday.

Update: By coincidence, Collected Works editor Bruce Caldwell was interviewed in today's Carolina Journal about his new edition of The Road to Serfdom.

Ten-year-old child wants a mobile phone. Parent buys a basic, inexpensive model with a pay-as-you-go plan. Child loses phone.

Parent: "You see, I thought that might happen, which is why I got you a cheap phone that's easily replaceable and not one of those fancy, expensive ones you're always asking for."

Child: "But if I had a fancy one, I would have been more careful not to lose it."

Zunächst schaute ich bei der BUAP rein und meldete mich "diciendo hola" bei der Oficina für Internationale Beziehungen. Mit einem Mitarbeiter der Oficina ging ich dann zu den Uni-eigenen Anwälten, die mich irgendwann ins Ausländerregister von Mexiko eintragen sollen. Wenn ich alle geforderten Unterlagen beisammen hab. Bis zum 11. August bleibt mir dafür Zeit. Aber seit heute hab ich auch alles beisammen. Alvaro zeigte mir dann noch meine Fakultät - mitten im Centro Historico. Kolonialer Bau, groß, mit mehreren Patios - beeindruckend. DAS ist Uni, das ist Alma Mater, das hat Würde, ja!

Meine Suche nach Zimmern in Puebla gestaltete sich nicht sonderlich einfach. Sämtliche Nummern, die ich wählte (achso, mein Handy funzt inzwischen, musste es umständlich bei einer Hotline registrieren und bin total stolz auf mich, dass ich das ohne die Hilfe eines Mexikaners gestanden habe), nahmen nicht ab. Ich habe von der BUAP eine Liste mit Unterkünften für Studenten bekommen - zum Großteil nutzlos. Eine Dame aber nahm ab. Senora Sonia. Die Dame wollte mich am Nachmittag in der Innenstadt mit dem Auto aufsammeln und dann mit mir zur Angebotenen Wohnung fahren. Ausgemacht war 17:30 Uhr. Gegen fünf bekam ich eine SMS, dass sie sich wegen Regen (Aguacero - jeden Tag! Woher das Wasser nur kommt?) verspätet. Ich sollte doch bitte bis 6 auf sie warten. Naja, ich stand dann an der ausgemachten Strasse um 6, als der große abendliche Aguacero über der Innenstadt hereinbrach, flüchtete mich unter das Vordach einer Kirche (davon gibt es tausende in Puebla - Kirchen, Kirchen, Kirchen) und wartete dort weiter auf Senora Sonia. Viertel vor sieben fuhr ihr kleiner Chevy Corsa in rot vor. Wir fuhren 5 Minuten der Strasse folgend aus dem direkten Zentrum heraus und standen vor einem ziemlich häßlichen, blauen Gebäude. Drinnen sah's dann ganz nett aus. Ein Zimmer in einer WG hatte sie mir angeboten - 3 Zimmer, derzeit ist nur eines belegt, Alexis aus Puerto Rico, Stundent an der BUAP. Eine Stunde palaverten wir über Möglichkeiten, Umgänglichkeiten, Respekt, Besuch, Lautstärke (als hätte ich noch nie in einer WG gewohnt - aber bitte, so wurde es wenigstens gesagt), Sauberkeit, Internet und und und... Alexis schien mir sehr sympathisch, die Wohnung sehr nah am Zentrum, aber es war die erste, die ich mir anschaute. Wir verblieben so, dass ich mich bis Ende der Woche entscheide.

Später sprang ich wieder in ein Internet-Café. Ich konnte nicht glauben, dass es keine sinnvolle Internetseite geben sollte, in der man ZImmer oder WGs in Puebla finden sollte. Und bitte, ein bißchen Google, ein bißchen Altavista und ya: CompartoDepa.com.mx! Das war genau die Seite, die ich gesucht hatte. Eine Art WG-Gesucht oder StudentenWG auf mexikanisch. Hier fand ich dann eine Menge Angebote und druckte kräftig aus.

Heute morgen wollte ich dann weitere Termine ausmachen. Gerardo hatte im Internet gleich mehrere Zimmer angeboten und wir vereinbarten einen Termin für halb 12. Ich fuhr mit einem Taxi zum Treffpunkt, blätterte 50 Peso hin und klingelte in der 16 de septiembre an einem weißen Garagentor. Davor eine laute Strasse - viel Verkehr, Busse, Camiones - kaum zu überqueren. Gerardo öffnete mir und zeigte mir das erste Zimmer. Eher ein (drücken wir es mal nett aus) Löchlein. Klein, noch nicht fertig, mit einem noch kleineren Bad, in dem man sich kaum unter der Dusche drehen könnte und einem 1m² großen irgendwas. Mit oben offen, wo man wohl rauchen könnte. Links und rechts, vorn und hinten Wände in voller Höhe. Eher nix. Dann stiegen wir in den zweiten Stock und hier zeigte sich eine freundliche, große Wohnung, mit großer Küche, viel Licht, einem modernen Bad und vier Zimmern. Dazu ein kleiner Balkon direkt am Wohnzimmer, und auf dem Dach eine Terasse mit Asador (Grill), Pflanzen, Stühlen und Tischen, und einem ziemlich beeindruckenden Blick auf den Vulkan La Malinche, der für die Dauer eines Augenblickes einen Blick auf sein schneebedecktes Dach gewährte. DAS sah mir schon eher nach was aus. Als ich so mit Gerardo plauderte, sagte er mir, dass das Zimmer in dieser Wohnung ab 1. August frei sei. So lang hatte ich nicht vor, im schäbigen, aber irgendwie netten Victoria zu verbringen. (Hab das Hotel irgendwie doch gemocht, ist mir heut so beim Durch-die-Stadt-Laufen eingefallen. Keine Ahnung warum?!) Er erzählte mir von anderen Zimmern, die er direkt im Centro Historico vermieten würde. Una Casa colonial, grande. Si le gusta a la gente extranjera.... Jaja, Koloniale Gebäude - das gefällt den meisten Ausländern. Also sprangen wir in seinen gelben Crossfox und düsten ins Zentrum.

Gerardo hatte nicht zuviel versprochen. Keine 7 Minuten Fußweg vom Zocalo entfernt, parkten wir den Wagen vor einem roten kolonialen Haus. Von außen noch nichts besonderes - also hier. Als Gerardo die Tür öffnete, offenbarte sich ein kleiner, schmaler und lang gezogener, bunt bemalter Patio, von dem links und rechts Zimmer abgingen. Pflanzen und Blumen säumten den Weg nach hinten und Gerardo zeigte mir das ein oder andere Zimmer mit meterhohen Decken. Dazu die beeindruckend großzügige Küche am Ende des Patios und zu guter Letzt: La Terraza! Auf dem Dach befindet sich ein toller Platz, teils bedeckt mit einem Sonnendach und mit Couches ausgestattet, Pflanzen an den Rändern - eine herrliche und großzügige Dachterasse. Wunderbar. Wir plauderten und plauderten und irgendwann hatte Gerardo wohl begriffen, dass ich aus meinen Hotel rauswollte. Aber auch hier sollte das Zimmer erst ab dem 1. August frei werden.

Aber Gerardo machte mir ein Angebot. Du ziehst bis dahin zu mir und meiner Mutter. Ja und hier sitz ich jetzt, in einem großzügigen, mexikanischen Haus, mit einem tollen Garten, einem riesigen Wohnzimmer und bewohne Gerardos Zimmer.

Wir fuhren direkt von der kolonialen Residenz zu ihm nach Hause, damit er das kurz mit seiner Mutter klären konnte. Kein Problem, sagte Mama, der auch die ganzen Zimmer in der Stadt gehören. Gerardo macht nur die Fitzelarbeit, zeigen, verhandeln, bewerben und und und... Direkt danach sprangen wir wieder in seinen gelben Crossfox, steuerten das Victoria an und ich sammelte die Sachen in meinem Zimmer zusammen. Danach hatte Gerardo noch dies und das zu tun, wobei ich ihn begleitete. Später kauften wir an einer Cocina economica fertiges Essen zum Mittag. Zusammen mit Mama verspeissten wir die mitgebrachten Sachen und setzten uns danach an den Vertrag. Natürlich ging ihm beim Ausdrucken die Tinte aus. Also setzten wir uns wieder in den Kampffox und düsten zu einem Auffüllshop. Keine 300 Meter entfernt - aber 8 Peso der Liter Sprit - wer Auto hat, der fährt. Bei dieser Gelegenheit shoppte ich gleich noch beim Walmart Lebensmittel für die kommenden Tage. Es ist nicht unnormal, dass Gerardo und seine Mama Leute im Haus haben. Ein Franzose lebt wohl auch zur Zeit hier - hab ihn aber noch nicht gesehen. Naja, später fuhren wir wieder zurück und machten den Rest des Vertrages fertig. Und jetzt sitz ich hier, tipp die Eindrücke ganz schnell in mein Notebook, dass auch ja nichts verloren geht, und gleich werden wir noch mal zur Casa Colonial aufbrechen.

Zwei Zimmer, die mir noch zur Option stehen, habe ich noch nicht gesehen -  und die wollen wir uns anschauen. All das erscheint mir erstmal sehr vernünftig und ich freue mich schon, auf meinen endgültigen Einzug in die Casa Colonial. Die Terasse - ein Traaaauuuuum! Ja, aber vorerst genieße ich den großzügigen Lebensstil der gehobenen (Mittel-?)Klasse Mexikos - so groß, wie das Anwesen hier ist, kann das gar nicht normal sein. Bueno, ich bin froh, dass ich mein Ziel erreicht habe, bis zum Ende der Woche eine dauerhafte Bleibe in Puebla zu finden. In diesem Sinne - todo bien!

Un' nu': Danke fürs Lesen und: Dranbleiben!

Du große Hand, ich brauche dich,

weil ich bei dir geborgen bin.

Ich spüre deine Hand,

wenn ich wach werde und du bei mit bist

wenn ich Hunger habe und du mich fütterst,

wenn du mir hilfst, etwas zu greifen und aufzubauen,

wenn ich mit dir meine ersten Schritte versuche,

wenn ich zu dir kommen kann, weil ich Angst habe.

Ich bitte dich: Bleibe in meiner Nähe und halte mich.

Und es sagte die große Hand zur kleinen Hand:

Du kleine Hand, ich brauche dich,

weil ich von dir ergriffen bin.

Das spüre ich,

weil ich viele Handgriffe für dich tun darf,

weil ich mit dir spielen, lachen und herumtollen kann,

weil ich mit dir kleine, wunderbare Dinge entdecke,

weil ich deine Wärme spüre und dich lieb habe,

weil ich mit dir zusammen wieder bitten und danken kann.

Ich bitte dich: Bleibe in meiner Nähe und halte mich.

(© by Gerhard Kiefel)

Entrepreneurship is exciting, important, dynamic, unpredictable, creative, the "driving force" of the market economy, in Mises's words. But is it beautiful? Yes, writes Evan Osborne in the new issue of the excellent Independent Review:

Commerce deserves a place next to literature, poetry, painting, music, and other conventional forms of art as an arena for human expression and a potential source of beauty. To expand the limits of human possibilities, entrepreneurs attempt to create value by rearranging scarce resources, and the methods they employ in these endeavors exhibit such dimensions of beauty as proportion, symmetry, and harmony.

The online edition of the article, "Commerce is Beautiful," is behind a six-month moving wall but you can read the working-paper version here. It's worth nothing that mathematics, another field not normally associated with the fine arts, also uses aesthetic terms like elegant, deep, austere, and beautiful to describe its achievements.

From PhD Comics, via Fabio. Part of an this week's series poking fun at the professoriate.

Lasse's post reminded me of the classic "What the Professor Really Means." Students, take note. Graduate students, study this carefully for its pedagogical wisdom.

The long-awaited New Institutional Economics: A Guidebook is due out this September from Cambridge University Press. Editors Eric Brousseau and Jean-Michel Glachant assembled an all-star team including Oliver Williamson, Paul Joskow, John Nye, Gary Libecap, Lee Alston, Pablo Spiller, Benito Arruñada, Stéphane Saussier, Jackson Nickerson, Brian Silverman, Joanne Oxley, Mike Sykuta, Mike Cook, and many others -- even Foss and Klein. You can pre-order yours today -- the hardback's a whopping $140 but the paperback's only $59.

Here's the official CUP page and here's an information page put together by Eric Brousseau. It should be a valuable reference for years to come.

Visiting my Mom this past weekend I found an item in the local paper about Kelly Robinson and Dan Norder, a happy couple who met at a Jack the Ripper conference. That's right, they're fellow Ripperologists. They're even hosting this year's Ripper conference, 10-12 October in Knoxville, Tennessee. For every interest or hobby there's a group or club, and in the new economy they're all on the web. (I shouldn't give Kelly and Dan too hard a time; after all, I met my wife at an Austrian economics conference.)

By the way, in case you missed it, the current issue of HBR features Anita Elberse's critique of the Long-Tail phenomenon. Yes, she argues, the web has given us many niche markets, but almost all the money is being made at the left-hand side of the distribution. Here are Chris Anderson's response and Elberse's rejoinder.

BMW-Sauber's first track test of a KERS system for 2009 went off without a hitch, the German magazine Auto Motor und Sport reports.

The event, on July 15, took place at the German carmaker's own Miramas test circuit, with Marko Asmer at the wheel over 48 kilometres.

It is now well known that Red Bull's KERS testing resulted in a visit to its Milton-Keynes factory of the local fire department, while Honda had some teething trouble when its initial track testing - with an old car - took place on an airfield runway and subsequently at Silverstone.

BMW-Sauber's KERS track testing will step up a notch next week when Christian Klien takes to the wheel of a modified F1.08 chassis.

Willy Rampf said:

"It will be obvious that we are running the systems, but the car will have nothing to do with the car for next year."

Neal's View: As a new technology, as far as F1 goes, everything is hush-hush. Expect performance and reliability to be much improved by the time they are introduced.

Like other members of the O&M community in the Northern Hemisphere I'm enjoying the lazy days of summer. This week I've been on an extended-family vacation in Destin, Florida -- heart of the "Redneck Riviera" -- reading mindless fiction, drinking piña coladas, and showing off my Body by InBev. One thing that surprises me is that prices at the local grocery store, and the local Wal-Mart (sorry, Walmart >|<), are no higher than the prices back home, even though the price elasticity of demand is surely lower. Why don't resort-town stores price like stores in airports or at ski resorts? Demand isn't quite that inelastic, but presumably less elastic than demand in year-round communities. Likewise, one would expect Walmart prices to be significantly lower in retirement communities or other areas populated by price-sensitive shoppers.

I asked my colleague Emek Basker, a Walmart expert, and she says that while there's plenty of anecdotal evidence of variation in price (and product selection) across Walmart stores, she doesn't know any empirical studies explaining these differences systematically in terms of price elasticities, income, labor costs, etc. Anybody know of such studies?

The Chronicle of Higher Education provides a useful summary of the OS-Liebowitz debate on file sharing we've been following for a while (thanks to David Glenn for the tip). I like this description of the original piece by Oberholzer-Gee and Strumpf:

The paper seemed like a model piece of empirical social science for the Freakonomics era. Unusual data source analyzed with "instrumental variables"? Check. Counterintuitive conclusion? Check. Implications for hot-button policy debate? Check. The scholars filed an amicus brief in defense of file-sharing companies in the U.S. Supreme Court's Metro-Goldwyn-Mayer Studios Inc. v. Grokster case in 2005. When a revised version of their working paper appeared in the February 2007 issue of the Journal of Political Economy, it was the lead article.

And people think editorial decisions are made on purely scientific grounds. . . . Anyway, the article includes valuable background information and some interesting details. Strumpf suggests that Liebowitz is pressing the issue so zealously because Liebowitz's center at UT-Dallas receives funding from the RIAA and "other commercial interests," a charge I find shockingly inappropriate and unprofessional. (Anyone who knows Liebowitz can attest to his zeal on a number of unpopular issues, such as his defense of QWERTY and his attack on the Boston Fed study of mortgage discrimination.)

I don't know the primary sources well but one gets the definite impression that Oberholzer-Gee and Strumpf are being less-than-fully candid about their work. Their defenses against various critics (not only Liebowitz) seem weak and unconvincing. Overall, this episode reminds me of the Card-Kreuger controversy over the minimum wage: an empirical paper finds the opposite of what everyone expects and makes a big splash, but the authors don't have a solid explanation for their findings, there are questions about the data and methods, and specialists aren't convinced by the results. My conjecture is that in this case, like the minimum-wage episode, the spashy result will not stand the test of time.

The notion of economic "opportunities," and their discovery or creation, is one of the core concepts of contemporary entrepreneurship research. But the use of opportunities as the unit of analysis poses several problems. The opportunity-discovery or opportunity-recognition perspective tends to treat economic opportunities as objective phenomena, while, under Knightian uncertainty, profit opportunities are always subjective, existing only in the imagination of economic actors. In an alternative view that Nicolai and I have elaborated in several papers, entrepreneurship is best understood not as perception, but as action, the investment of resources under uncertainty in anticipation of uncertain rewards.

In a new paper, "Opportunity Discovery, Entrepreneurial Action, and Economic Organization," I critique the opportunity-discovery perspective in more detail. In particular, I argue that the literature has misunderstood Israel Kirzner's concept of "discovery," the theoretical basis of much of the research on opportunity discovery. Kirzner's explanandum is not entrepreneurship per se, but equilibration. He invokes the entrepreneur, and his "alertness" to exogenously determined profit opportunities, as a metaphor, to explain the tendency of markets to clear. It is not meant as a positive account of the entrepreneurial function, but rather an instrumental explanation of the market process. Hence a research program based on operationalizing "opportunities," exploring thow they can be "discovered without search," and so on, is unlikely to bear fruit.

The paper is forthcoming in the Strategic Entrepreneurship Journal. Comments welcome. Abstract below the fold.

This paper reviews and critiques the “opportunity discovery” approach to entrepreneurship and argues that entrepreneurship can be more thoroughly grounded, and more closely linked to more general problems of economic organization, by adopting the Cantillon-Knight-Mises understanding of entrepreneurship as judgment. I begin by distinguishing among occupational, structural, and functional approaches to entrepreneurship and distinguishing among two influential interpretations of the entrepreneurial function, discovery and judgment. I turn next to the contemporary literature on opportunity identification and argue that this literature misinterprets Kirzner’s instrumental use of the discovery metaphor and mistakenly makes “opportunities” the unit of analysis. I then describe an alternative approach in which investment is the unit of analysis and link this approach to Austrian capital theory. I close with some applications to organizational form and entrepreneurial teams.

Following up Dick's post on speculation, Craig Pirrong had a nice piece in Friday's WSJ providng more details on oil markets. Notes Craig:

The unprecedented run-up in oil prices is painful for consumers around the world. But the focus on speculation is misguided, and represents a convenient distraction from an understanding of the real, underlying causes of high oil prices -- most notably continuing demand growth in the face of stagnant production, supply disruptions and the weakening dollar.

More restrictions and regulations of energy markets, in the vain belief that such actions will bring price relief, are counterproductive. They will make the energy markets less efficient, rather than more so.

The pointer is from Mike Giberson, who provides more information and links to Craig's (brilliantly named) blog, Streetwise Professor. Craig testified Friday on oil-market speculation before the US House Agriculture Committee; you can read his remarks here. And for a classic paen to speculation more generally, see Victor Niederhoffer's classic "The Speculator as Hero."

Note to graduate students: If you haven't read Craig's classic papers on bulk shipping, introducing the concept of "temporal specificity," your education is incomplete. Check 'em out:

Pirrong, Stephen C. 1992. “An Application of Core Theory to the Study of Ocean Shipping Markets.” Journal of Law and Economics 35: 89–131.

Pirrong, Stephen C. 1993. “Contracting Practices in Bulk Shipping Markets: A Transactions Cost Explanation.” Journal of Law and Economics 36: 937–76.

As a New Economy skeptic (1, 2, 3, 4) I worry about sweeping claims that information technology has rendered obsolete the large, vertically integrated, publicly held corporation and its managerial hierarchy. Such claims suffer from two problems: First, they tend to be thinly documented -- evidence on the economy-wide distribution of organizational forms is largely fragmentary and anecdotal. Second, they usually exaggerate what's new about those changes that we can document. As I wrote in my review of Yochai Benkler's The Wealth of Networks:

Benkler proposes social production as an alternative to the traditional organizational modes of “market” and “hierarchy,” to use Oliver Williamson’s terminology. Indeed, open-source production differs in important ways from spot-market interaction and production within the private firm. But here, as elsewhere, Benkler tends to overstate the novelty of social production. Firms, for example, have long employed internal markets, delegated decision rights throughout the organization, formed themselves into networks, clusters, and alliances, and otherwise taken advantage of openness and collaboration. There exists a variety of organizational forms that proliferate within the matrix of private property rights. Peer production is not new; the relevant question concerns the magnitude of the changes.

Here, the book suffers from a problem common to others in this genre. Benkler provides a wealth of anecdotes to illustrate the revolutionary nature of the new economy but little information on magnitudes. How new? How large? How much? Cooperative, social production itself is hardly novel, as any reader of “I, Pencil,” can attest. Before the web page, there was the pamphlet; before the Internet, the telegraph; before the Yahoo directory, the phone book; before the personal computer, electric service, the refrigerator, the washing machine, the telephone, and the VCR. In short, such breathlessly touted phenomena as network effects, the rapid diffusion of technological innovation, and highly valued intangible assets are not really really new. (Tom Standage’s history of the telegraph and its own revolutionary impact, The Victorian Internet [New York: Walker & Company, 1998], is well worth reading in this regard.)

A new paper by Giovanni Dosi, Alfonso Gambardella, Marco Grazzi, and Luigi Orsenigo, "Technological Revolutions and the Evolution of Industrial Structures: Assessing the Impact of New Technologies upon the Size and Boundaries of Firms," looks at the empirical evidence more systematically and concludes that the effect of information technology on firm size and organization is real, but modest:

In this work we discuss the impact of the new ICT techno-economic paradigm upon the vertical and horizontal boundaries of the firm and ask whether the change in the sources of competitive advantage has resulted in changes in the size of distribution of firms and also in the degree of concentration of industries. Drawing both on firm-level and national statistical data we assess the evolution of the overall balances between the activities which are integrated within organizations and those which occur through market interactions.

While the new paradigm entails "revolutionary" changes in the domain of technology, the modification in industrial structures has been somewhat more incremental. Certainly, the vertical and horizontal boundaries of firms have changed and together one is observing a turnover in the club of biggest world firms, accounting also for a shift in the relative importance of industrial sectors. Nonetheless, we do not observe any abrupt fading away of the Chandlerian multidivisional corporation in favour of smaller less-integrated firms.

Worth a read. And I'm sure Dick will have more to say about this!

Isn't this a little much for nerdy academics?

As a registered user with Cambridge Journals Online (CJO) you may be interested to read about the latest additions we have made to the site. . . .

Users can now bookmark links from journal homepages and article abstracts using social bookmarking services, such as del.icio.us, Digg.com and Reddit.com enabling them to save web pages they want to remember or share. 

What's next, a Twitter feed for Peter's daily research activities? [02:30pm July 10, 2008 from CoolProf: Just updated footnote 12.]

As a follow up to these comments about the organizational structure of professional-services firms, law firms in particular, note Tom Ulen's remarks on some recent trends, e.g., the growing importance of specialized, niche firms that provide specific services to corporate clients on a short-term basis.

I blogged previously on an alarm clock designed for procrastinators and people with time-inconsistent preferences. It runs up to 15 minutes fast but in a random pattern so you don't know how fast it really is. Here's an even better clock: if you don't wake up it starts dialing numbers randomly chosen from your phone's contact list, annoying the living s__ t out of your friends until you turn it off. As Engadget notes, this is brilliance -- "pure, sadistic, barbarous brilliance."

Most regulatory agencies are staffed by a mix of attorneys and economists. Members of these groups do not always play well together. How, then, should such an agency be organized -- functionally, putting the economists in a single unit, reporting to a chief economist, or divisionally, spreading the economists throughout divisions organized by legal issue, industry sector, geographic region, etc. and having them report to an attorney in charge of each division? An interesting application of the U-form versus M-form problem posed by Chandler (1962).

An analysis of organizational structure at US and European competition agencies by Luke Froeb, Paul Pautler, and Lars-Hendrik Roller (via Dan Sokol) finds that

the main advantage of a functional organization is higher quality economic analysis while the disadvantage is that the analysis may not be focused on legal questions of concern, and is less easily communicated to the ultimate decision makers. Likewise, the advantages of a divisional organization are decentralized, and faster, decision making; however, the quality of the economic analysis is likely to be lower and can result in less information reaching the ultimate decision makers.

Froeb, Pautler, and Roller suggest that hybrid forms, such as (a) functional organizations with strong horizontal links between economists and attorneys or (b) divisional organizations with strong vertical links between economists and attorneys, and managers trained in both law and economics, are best.

My own experience at the CEA confirms the importance of both the vertical and horizontal links. We economists were organized into a focused unit for major projects like the Economic Report of the President but were also assigned to ad hoc, inter-Agency teams working on specific policy issues (I dealt with spectrum auctions, the pricing of air traffic control, and foreign ownership of domestic telecom assets, among other things). I was typically the lone economist (though hardly the nerdiest member) on each team.

Doherty will speak on the importance of a cohesive community through strong economic support of local business and will also participate in handing out membership plaques to the Chamber’s new membership.

To be held at the Augusta Pines Savannahs in Spring, Texas, the banquet will have all the ambience and air of Christmas, complete with dinner, dancing, holiday decor and live music.

The live auction will feature valuable sports and music collectibles, and special packages such as a Napa Valley Wine Tour and Nascar Racing at the Texas Motor Speedway in Fort Worth. “The evening promises to be fun and memorable.  This is a great opportunity to get unique Christmas gifts for the person who has everything,” says Elle Carnes, Banquet Chair. 

In its first year the Chamber hopes to increase awareness about the Chamber, boost its current membership by 20%, and raise $5,000 for its startup year.

Tickets are on sale now at $50 for chamber members and $55 for non-members. SKCC is soliciting donations for door prizes and auction items, as well as underwriters and advertisers for the event program.  If you would like to contribute or attend the auction, please visit us online at www.springkleinchamber.org or contact Elle Carnes, Banquet Chair, via email info@springkleinchamber.org or phone at (281) 912-1107.

###

The Spring Klein Chamber of Commerce (SKCC) is a non-profit organization dedicated to being the primary resource for area economic development, business expansion and overall quality of life in Spring-Klein. For more information, visit www.springkleinchamber.org.

Contact:

Candace Runaas

Runaas Resources Public Relations

281-257-4431

www.RunaasResources.com

Russ Coff, whose work is popular in these parts, is guest blogging over at orgtheory.net. Look for some good stuff in the coming weeks.

Update: Here's his first post.

Stan Liebowitz has posted another comment on the JPE file sharing controversy. Stan ups the ante by including, as appendices, a synopsis of the controversy, copies of correspondence between himself and the authors of the original article, and copies of the JPE referee reports and editor Steve Levitt's rejection letter. Readers outside of academia may enjoy this rare window into the arcane world of peer review. (Via Craig Newmark.)

Question: If the authors of the original paper, Oberholzer-Gee and Strumpf, published their response to Stan, would we refer to it as OS/2?

Update: Stan reminds me to emphasize that the negative referee report from the JPE, the basis of Levitt's rejection decision, was, in fact, written by Oberholzer-Gee and Strumpf. In other words, there is an OS/2, and you can read it as one of Stan's appendices. The core of Stan's paper is a detailed reply to OS/2, arguing that they don't have a legitimate response to the critiques in his original comment.

Ein Anruf bei meinem anderen Bruder, der glücklicherweise Airliner ist, macht den Weg frei. Und so sitze ich Freitag morgen kurz nach 5 im Flugahfenzubringer und bin auf dem Weg zu Konrad-Adenauer-Flughafen.

Kurz vor 8 setze ich am Freitag Morgen in einem verregneten und grauem Leipzig auf. Die Wolken hängen tief und ziehen weiter in Richtung Osten. Ich bin dem rheinischen Wetter vom Vortag hinterhergeflogen. Aber egal. Grund genug, eine Sonnenblume zu kaufen und mit frischen Brötchen im Gepäck mich auf den Weg zu meinem Bruder zu machen.

Punkt Neun steh ich bei der kleinen Familie vor der Haustür und darf das neue kleine Wunder - Elise - bewundern.

Faszinierend. Zwei Tage alt, alles ist so miniklein. Die Hände sind so groß, wie das vorderste Daumenglied,

der Unterarm ist so lang, wie mein kleiner Finger. Die Finger und Zehen haben winzig kleine Miniaturnägel - es ist wirklich schon toll - so ein kleiner kleiner Mensch - aber alles ist dran und funktioniert.

Als ich bei den Dreien bin, ist Elise ziemlich schläfrig - die Augen halb offen, mal halb zu, versucht sie sich langsam an die Welt zu gewöhnen. Probleme gibt es keine, ungewohnt scheint nur noch der viele Platz auf einmal zu sein, den sie um sich herum hat. Da kann man schon einmal erschrecken und ein bißchen weinen.

Mein Besuch dauert bis zum Mittag, später taucht meine Mama, die ja mal wieder Oma geworden ist auf, und mit ihr räume ich das Feld.

Ich habe für meine Leipzig-Blitz-Aktion insgesamt nicht viel Zeit geplant. Schon am späten Nachmittag wollte ich wieder in Leipzig in den Flieger steigen und zurück nach Köln/Bonn fliegen. Trotzdem schaffe ich es noch, meinen lieben Freunde Daniel zu aktivieren und zu einem kurzen, aber leckeren hausgebrauten  Bierchen im Brauhaus zu bewegen. Eine Stunde haben  wir für unser kurzes Treffen und es ist wahrscheinlich das letzte Mal vor Mexiko, das wir uns gesehen haben. Schön, dass das geklappt hat.

Nach einem weiteren Treffen mit Mama und Papa auf ein finales Leipzig-Bier mache ich mich gegen 5 wieder auf den Weg zum Flughafen. Die Maschine zurück hat leider 40 Minuten Verspätung - 40 Minuten, die ich auch in Leipzig noch hätte nutzen können. Aber egal.

Zurück in Bonn schaue ich kurz nach 8 auf ein Ausstandsglas Sekt im Steppenwolf vorbei, danach noch auf ein Bierchen mit den Kollegen und auf dem nach-Hause-Weg noch kurz auf dem Geschichts-Sommer-Fest vorbeigewunken. Danach fahre ich, so langsam merkend, dass mir die Energie schwindet, völlig übermüdet mit dem Nightliner nach Haus - und falle in einen tieeeefen Schlaf. Ein verrückter Tag, wahnsinn, was man alles in 24 Stunden packen kann - aber alles für diesen Augenblick - alles für Elise.

Took my son to see The Incredible Hulk today. Best scene (paraphrasing from memory):

Bad guy Emil Blonsky, demanding at gunpoint for nerdy science professor to inject him with Bruce Banner's radiation-infected blood: "Make me like him!"

Professor: "It's extremely dangerous. You don't know what it could do to you!"

Blonsky grabs professor by the throat and hoists him over his head.

Professor: "I didn't say I wouldn't do it. I just need informed consent."

Like many observers, I was puzzled by last year's IPO of the Blackstone Group, one of the nation's largest private-equity firms. After all, the ability of PE firms to restructure and improve poorly performing companies owes a lot to their isolation from the day-to-day pressures of satisfying public investors. PE firms already face potential agency conflicts between their general partners and the managers of their portfolio companies, and between their general and limited partners; why add agency problems between the partners and public shareholders? Has the credit squeeze raised the cost of debt finance that much?

Today's WSJ reports that KKR, which considered going public last year but pulled out, is again pondering an IPO:

The storied corporate-buyout firm has quietly and aggressively hired a battery of executives in recent months, creating an organization chart that looks remarkably similar to that of a public company. It has brought on a general counsel, a public-affairs chief, a chief compliance officer, a chief technology officer, a chief talent officer and a chief human-resources officer. . . .

[P]eople close to KKR acknowledge that it is still keen on becoming a public company and a raft of recent shifts, including the hiring spree, speak to a broader change at the firm and how it views its business.

Perhaps the publicly held PE firm is best described as a new hybrid form, an organization that combines the governance advantages of private equity with the lower capital costs of the publicly traded corporation. Or does it combine the worst features of both?