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Business Economics
A Category Archive (83 entries)
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November 19, 2009
Books: Reviews and Suggested Readings
Arnold Kling
The Kauffman Foundation conducted a survey of entrepreneurs. The findings can be inferred from the table of contents. Experience, Management, and Luck: The Keys to Success Professional Networks, Education, Funding, Personal Networks: Important Location, Investor Advice, Alumni Networks, and Regional... MORE
October 30, 2009
Business Economics
Arnold Kling
I don't think yesterday's GDP report matters. Historically, cyclical movements in GDP are just blips. It is the long-run trend of productivity that matters. This news from Scott Shane might be disturbing. The self-employment rate is now below pre-recession levels.... MORE
October 26, 2009
Economic Methods
Arnold Kling
(i). Bob Sutton quotes a meta-analysis by Frank Schmidt and John Hunter published in 1998 on the factors found to affect job performance. 1. GMA tests ("General mental ability") 2. Work sample tests 3. Integrity tests: surveys design to assess... MORE
October 14, 2009
Business Economics
Arnold Kling
Calvin Trillin interviews a Wall Street old-timer. When the smart guys started this business of securitizing things that didn't even exist in the first place, who was running the firms they worked for? Our guys! The lower third of the... MORE
October 12, 2009
Business Economics
Arnold Kling
I think Alex Tabarrok is the most helpful of the bloggers thus far. Lynne Kiesling is helpful on Williamson as well as on Elinor Ostrom, the other new Nobel Laureate. I think of Oliver Williamson in terms of the 1980's... MORE
September 25, 2009
Business Economics
Arnold Kling
Make it an exercise in obtaining government money. Fisker Automotive, a private company based in Irvine, Calif., has received a $529 million loan from a Department of Energy program designed to fund the development of alternative vehicles. This was announced... MORE
September 16, 2009
Finance: stocks, options, etc.
Arnold Kling
From a New York Times story: He recalls vividly the days in early 2007 at Lehman when his financial models began to throw up more warnings showing delinquencies and defaults, and he remembers colleagues on his desk raising questions about... MORE
August 25, 2009
Business Economics
Arnold Kling
We were filmed in Kansas City in February. My first appearance is at 9:23. One theme of the video is the similarity between blogging and entrepreneurship. Catch Tyler about 18 minutes in (he also speaks earlier in the video).... MORE
August 21, 2009
Behavioral Economics and Rationality
Arnold Kling
Matt Yglesias wonders why politicians are not more strongly motivated by higher ideals. Selling the public good down the river to bolster your re-election chances isn't like stealing a loaf of bread to feed your starving children. The welfare rolls... MORE
July 20, 2009
Finance: stocks, options, etc.
Arnold Kling
I want to make a few comments on this issue, which David has touched on On balance, I think I would support auditing the Fed. 1. The conservative case against auditing the Fed is that it will reduce the Fed's... MORE
July 15, 2009
Books: Reviews and Suggested Readings
Arnold Kling
Alex Tabarrok looks at a study showing the increasing churn in the U.S. economy. The topple rate is a measure of how the rank of large firms on return of assets changes over time. The topple rate has increased by... MORE
June 25, 2009
Economics of Health Care
Arnold Kling
Melinda Beeuwkes Buntin and David Cutler write, There are health care institutions that have spent large sums on health IT with zero or even negative returns; some health IT reforms made matters worse and had to be uninstalled. The reason... MORE
June 12, 2009
Business Economics
David Henderson
In his book, Prophet of Innovation: Joseph Schumpeter and Creative Destruction, business historian Thomas K. McCraw lays out a numerical example of economies of scale. Unfortunately, in doing so he confuses marginal and average cost. McCraw writes (pp. 52-53): Let... MORE
May 7, 2009
Books: Reviews and Suggested Readings
Arnold Kling
I asked, "If we had a product that allowed us to put questions and answers on your Web site, and this product wouold make all the e-mails go away, would you buy it?" Now here's a good lesson in... MORE
January 21, 2009
Business Economics
Arnold Kling
President Obama comes across to me as the Master of the Mixed Signal. It seems unclear how he will set priorities or where he stands on several key issues. I think this goes beyond a calculated effort to try to... MORE
January 14, 2009
Business Economics
David Henderson
It seems obvious that the answer to the above question is "yes." But it wasn't obvious to a small businessman who bet hundreds of thousands of his own money and hundreds of thousands of other people's money on his answer.... MORE
January 13, 2009
Economics of Health Care
Arnold Kling
Michael Cannon and I make it. Patients with multiple diagnoses require someone who can organize the efforts of multiple medical professionals. It is not unreasonable to imagine that delivering health care effectively, particularly for complex patients, could require a corporate... MORE
December 15, 2008
Business Economics
Arnold Kling
Russ Roberts and Bob Higgs discuss the concept on this week's econtalk. Nassim Taleb tells Charlie Rose that we are headed for Capitalism 2.0, in which stock prices are much lower, and banks are treated like public utilities--their job is... MORE
Business Economics
Arnold Kling
Management systems degrade. As a manager or a regulator, if you stand still you fall behind. This year, the Washington Redskins hired a new coach, Jim Zorn. They started out 6-2, but they have since lost 5 out of 6... MORE
December 8, 2008
Business Economics
Arnold Kling
In his latest podcast, Russ Roberts interviews Steven Lipstein the CEO of the large hospital that shunted my father around to 8 different units over a two-week period. What strikes me about Lipstein is how little responsibility he wants to... MORE
September 3, 2008
Business Economics
Arnold Kling
Teresa D. Harrison and Christopher A. Laincz write We find that [nonprofit] entry behavior resembles that of for-profits but greatly differs on the exit side. New public charities begin smaller than incumbents. The survivors grow much faster than incumbents while... MORE
August 16, 2008
Business Economics
Arnold Kling
I've said that I think that someone should write a book about Freddie Mac. Here is my chapter.... MORE
August 6, 2008
Business Economics
Arnold Kling
A Freddie Mac Press release says, The story is apparently based on the word of David Andrukonis, a former employee who was involuntarily terminated in 2005. It describes a memorandum – one we can't confirm the existence of, one we... MORE
July 30, 2008
Business Economics
Arnold Kling
1. I should have more autonomy. 2. I should be rewarded more for my own ideas that work. 3. I should be penalized less for my own ideas that fail. 4. Competition that is innovative or inexpensive is unfair. That... MORE
July 22, 2008
Business Economics
Bryan Caplan
David Friedman's recent post on airplane boarding gave me a "Why Not?" idea: Wouldn't it be simpler if last row on the airplane was called #1? Then even the innumerate could understand that the first row boards first. It's not... MORE
July 21, 2008
Business Economics
Arnold Kling
Glenn Reynolds pointed to this blog post, which says that an inflatable electric car could be only $2500 in price and available starting in 2010-2011. The link takes you to a site for something called XP Vehicles. It lists no... MORE
July 2, 2008
Business Economics
Arnold Kling
Mihir A. Desai, Dhammika Dharmapala, and Monica Singhal write, The Low Income Housing Tax Credit (LIHTC) program provides for the majority of new affordable housing units built in the U.S. and has resulted in the production of 1.5 million low-income... MORE
June 26, 2008
Economic Education
Arnold Kling
The question of whether businesses should be public-spirited is a great one for class discussion. Teachers and professors will want to bookmark Creative Capitalism. Thanks to Tyler Cowen for the pointer. Here is Michael Kinsley's introduction: why not just pay... MORE
June 5, 2008
Business Economics
Arnold Kling
Another Nassim Nicholas Taleb quote: A scalable profession is good only if you are successful; they are more competitive, produce monstrous inequalities, and are far more random, with huge disparities between efforts and rewards--a few can take a large share... MORE
May 28, 2008
Business Economics
Arnold Kling
From Another Paul Graham essay: If you start from successful startups, you find they often behaved like nonprofits. And if you start from ideas for nonprofits, you find they'd often make good startups. In Under the Radar, where I argued... MORE
May 19, 2008
Business Economics
Arnold Kling
Michael Malone writes, Half of all new college graduates now believe that self-employment is more secure than a full-time job. Today, 80% of the colleges and universities in the U.S. now offer courses on entrepreneurship; 60% of Gen Y business... MORE
May 18, 2008
Business Economics
Arnold Kling
Steve Boriss is not such a fan of the Associated Press. First, while its members’ businesses are shrinking, the AP has used their fees to mushroom into a huge, full-service news outlet with more than 4,000 employees working in more... MORE
April 3, 2008
Business Economics
Arnold Kling
Paul Graham writes, The average MIT graduate wants to work at Google or Microsoft, because it's a recognized brand, it's safe, and they'll get paid a good salary right away. It's the job equivalent of the pizza they had for... MORE
April 1, 2008
Business Economics
Arnold Kling
Tyler Cowen ponders the theoretical merits of a proposed re-organization of financial regulation. The Fed is smarter than other regulators, the Fed can pay higher salaries, and the Fed has more independence. ...One important question is what kind of relationship... MORE
February 28, 2008
Business Economics
Arnold Kling
This interview has many. A good quote to give my statistics students: If you are looking for a career where your services will be in high demand, you should find something where you provide a scarce, complementary service to something... MORE
January 31, 2008
Business Economics
Arnold Kling
Russ Roberts writes, Within a firm and within a family, resources and decisions get made without prices and often without profits. The answer (as Coase understood and as Lauren notes in her comment) is that in these organizations, the savings... MORE
January 23, 2008
Business Economics
Arnold Kling
On Radio Free Megan, Austan Goolsbee (now an adviser to Barack Obama) discusses, among other things, the role of regulation in financial markets. Using his 20/20 hindsight, Goolsbee tells us that the mortgage market should have been better regulated. I... MORE
November 14, 2007
Business Economics
Arnold Kling
William Easterly writes, Set big goals. Do whatever it takes to reach them. These muscular sentences form the core of commencement addresses, business-advice books, political movements and even the United Nations approach to global poverty. In "Strategic Intuition," a concise... MORE
November 10, 2007
Books: Reviews and Suggested Readings
Arnold Kling
Is called The Logic of Life. I hated the introduction. At one point, Harford writes, Might there not be such a thing as a rational blowjob? I don't think of myself as a prude, but I wound up muttering to... MORE
November 2, 2007
Business Economics
Arnold Kling
This is an hour-long video of an announcement at Google of a set of protocols called "Open Social." I cannot vouch for its economic significance. But any business sociologist ought to watch this to see the way these guys talk,... MORE
August 10, 2007
Business Economics
Arnold Kling
I write, Despite Young Dave's assessment, I think it is possible that Facebook will make the leap from its predominantly young demographic to mainstream, grown-up usage. If it does so, the transition will happen soon and will not take long.... MORE
August 7, 2007
Economic Education
Arnold Kling
According to Tyler Cowen, it's right here. He says (it's an interview with Bloomberg's Tom Keene) that right now blogs are the best place to learn economics. Probably not if your goal is to pass the exam. But it's an... MORE
July 26, 2007
Business Economics
Arnold Kling
Austan Goolsbee writes, Take the Sonics. The team may have lost $60 million while Mr. Schultz owned it. But he bought it for $200 million in 2001 and sold it for $350 million five years later. So he ended up... MORE
July 24, 2007
Business Economics
Arnold Kling
In The New York Times, Harriett Rubin writes, It took Dee Hock, father of the credit card and founder of Visa, a thousand books to find The One. Mr. Hock walked away from business life in 1984 and looked back... MORE
July 20, 2007
Business Economics
Arnold Kling
the Wall Street Journal does an interview. WSJ: Is Google an example of a “winner take all” market, where “network effects” make it more valuable as it gets more users? Varian: I don’t think [search] is a winner take all... MORE
July 10, 2007
Business Economics
Arnold Kling
James Surowiecki contrasts the governance of pirate ships with that of corporations. Leeson’s analysis of pirate governance focusses mainly on the way in which this system deterred self-dealing. But the pirate system was also based on an important insight: leaders... MORE
June 22, 2007
Business Economics
Arnold Kling
Here is a very worthwhile interview with businessman and libertarian benefactor Charles Koch. Q: What do you envision Koch Industries to be in 10 years? Mr. Koch: The future is unknown and unknowable. This is the perspective of a book... MORE
June 14, 2007
Business Economics
Arnold Kling
Tyler Cowen praises Ben Casnocha in Tyler's New York Times column. But why has America produced so many successful young entrepreneurs? Ben Casnocha, 19, author of the new book “My Start-Up Life: What a (Very) Young C.E.O. Learned on His... MORE
May 2, 2007
Business Economics
Arnold Kling
Jane Galt (who showed up at a lunch at Cato today) found this story. Several electronics outfits now sell head-mounted displays that they claim are the next frontier in gaming and movie watching. Rudimentary virtual-reality tech has been around since... MORE
April 13, 2007
Business Economics
Arnold Kling
I'll just pull quotes from several of his essays.... MORE
March 11, 2007
Business Economics
Arnold Kling
The Indian Economy is a blog about, well, you can guess. If you are an economist/writer/blogger who’s written about India and/or economics, they would like a few more contributors. You don't need to be a resident of India, but you... MORE
March 1, 2007
Business Economics
Arnold Kling
My essay on the YouBubble says, If you are a founder or an investor in a new business, then I would advise you to read the Business 2.0 article on 25 hot start-ups. Figure out what these enterprises have in... MORE
February 8, 2007
Business Economics
Arnold Kling
Hal Varian writes, it is simple to run a controlled experiment with a Web page. Amazon can show a different page layout to every hundredth visitor and determine in a few days whether the new design increases sales. Similarly, a... MORE
February 1, 2007
Institutional Economics
Arnold Kling
Clay Shirky writes, Open systems are a profound threat not only because they outsucceed commercial firms but also because they outfail them. They grow not in spite of failure but because of it. In traditional business, trying anything is expensive,... MORE
January 25, 2007
Income Distribution
Arnold Kling
Bruce Bartlett writes (from behind the NYTimeSelect firewall, unfortunately), [Alan] Reynolds has been criticized for making too much of inherent limitations in the data that have been known for many years and for ignoring evidence that conflicts with his thesis.... MORE
January 15, 2007
Business Economics
Arnold Kling
Organizations and Markets looks interesting, although the most stimulating posts are coming from a guest blogger, Steven Postrel. For example, It turns out that the main reason why upstream specialist A needs to know something about downstream specialty B is... MORE
Economics of Health Care
Arnold Kling
James Miller notes a New York Times story on corporations setting up in-house health clinics. Miller comments, Much of economic growth comes from specializing. Whatever is requiring firms such as Pepsi to "unspecialize" by providing health care is greatly harming... MORE
January 2, 2007
Business Economics
Arnold Kling
This story rings true with me. “There have been scandals in corporate history where people are really making stuff up, but this wasn’t a criminal enterprise of that kind,” [Yale law professor Jonathan] Macey says. “Enron was vanishingly close, in... MORE
November 27, 2006
Books: Reviews and Suggested Readings
Arnold Kling
In my latest essay, I write, Continental Europe is set up to preserve large public sectors, large banks, and large corporations. For individuals, the promise is stable jobs, a stable business environment, and collective sharing of the costs of unemployment,... MORE
October 12, 2006
Business Economics
Arnold Kling
But I agree with what he writes here. The general point is much broader. Baseball involves a lot of money; people have strong incentives to make the right decisions. But even experienced people make systematic errors--and it took a Billy... MORE
October 4, 2006
Business Economics
Arnold Kling
The Washington Post says, Neither Circuit City nor Best Buy discloses how much of its bottom line comes from extended warranty sales. But analysts have estimated that at least 50 percent and in some lean years 100 percent of profits... MORE
September 25, 2006
Business Economics
Arnold Kling
'Jane Galt" writes If Mr Delong emails me, I will be quite happy to put him in touch with reputable and knowlegeable people, not paid to do so, who believe that Skilling and Lay, at the very least, may be... MORE
September 15, 2006
Business Economics
Arnold Kling
It turns out that my post on Test Scores and Economic Performance was preceded by Stuart Buck's meditation on the knowledge contained in businesses. For any type of business that you can imagine, the overwhelming majority of the information necessary... MORE
August 28, 2006
Business Economics
Arnold Kling
Bryan makes a good point that denying someone a risky investment opportunity probably will not protect that individual, given all of the alternatives out there. When I wrote, I think we need fewer fund-raising start-ups and more start-ups where the... MORE
August 26, 2006
Business Economics
Arnold Kling
Bruce Boston asks, what are the economic arguments in favor of the two class system of accredited investors and non-accredited investors? And are these economic arguments stronger than the counter-arguments that can be made on this same topic? I'd also... MORE
August 25, 2006
Business Economics
Arnold Kling
The San Francisco Chronicle reports, Ray Ruiz of Sacramento will perform one of the dirtier jobs of parenthood: For $50 an hour plus travel costs, Ruiz will bring a chair, lights, chemicals and combs to your house to pick the... MORE
August 23, 2006
Business Economics
Arnold Kling
Tyler Cowen finds advice on what to buy used. We just helped my daughter move to an apartment in Boston. She asked, "How did people sell their used furniture before Craigslist?" My wife and I decided that part of the... MORE
August 8, 2006
Business Economics
Arnold Kling
Chris Anderson's Long Tail thesis is that small, niche markets are, in the aggregate, very large on the Internet. Russ Roberts has a "podcast" (audio file) where Anderson explains his thesis. I recommend becoming familiar with Anderson's thinking. He draws... MORE
March 31, 2006
Business Economics
Arnold Kling
James Pinkerton pushes an idea to make the Federal government more effective. [Former Congressman Bob] Walker's idea, which makes it print debut here in TCSDaily, is this: Take the functions of the federal executive branch and turn them all into... MORE
November 23, 2005
Business Economics
Arnold Kling
My answer has always been "no." Read this post, from a venture capitalist. there are two ways to build a company. You can design it from scratch, figuring out exactly what you want to build, getting it all down on... MORE
September 20, 2005
Business Economics
Arnold Kling
In this essay, I write Small organizations are the size of hunter-gatherer bands. The behavior of each individual can be monitored and constrained by the group, using instincts that are deeply embedded by evolution into our social psychology. Members want... MORE
September 15, 2005
Business Economics
Arnold Kling
when he writes, Shouldn't the fact that WalMart finds it more efficient to be a bureaucracy of 1.5 million people--rather than to split itself up into 15,000 companies of a hundred employees each--make Arnold Kling a little hesitant in his... MORE
September 12, 2005
Business Economics
Arnold Kling
In my latest essay, I write, While I have little faith in individual corporations, I have more faith in decentralized market processes. For example, although I have no admiration for any oil company in particular, I believe that we will... MORE
July 20, 2005
Books: Reviews and Suggested Readings
Arnold Kling
A while back, Tyler Cowen recommended Perry Mehrling's book on finance theorist Fischer Black. I read it while on vacation this past week. I strongly endorse Tyler's recommendation. Black co-developed a formula for option pricing which garnered a Nobel Prize,... MORE
May 31, 2005
Business Economics
Arnold Kling
I found this story interesting. The Supreme Court on Tuesday overturned the conviction of the Arthur Andersen accounting firm for destroying Enron Corp.-related documents before the energy giant's collapse. In a unanimous opinion, justices said the former Big Five accounting... MORE
May 19, 2005
Business Economics
Arnold Kling
Paul Graham says, Most organizations who hire people right out of college are only aware of the average value of 22 year olds, which is not that high... The most productive young people will always be undervalued by large organizations,... MORE
April 22, 2005
Business Economics
Arnold Kling
Lots of good stuff recently at Knowledge Problem. Lynne tells us what to think of the new energy legislation. If you support a forward-looking, dynamic, creative, innovative approach to energy, this is not the legislation for you. If you are... MORE
March 7, 2005
Business Economics
Arnold Kling
Tyler Cowen posts on one of my favorite topics, movie economics. a multiplex will charge the same ($9.50 in my case) for the number one movie and for a flop. Nor is the price more expensive for Saturday night, or... MORE
February 10, 2005
Business Economics
Arnold Kling
I hope this got it out of my system. If mail-in rebates went away, then retailers would still have to earn their profits somehow. Either other shady sales practices would expand, or the retailers would have to raise prices. In... MORE
February 3, 2005
Business Economics
Arnold Kling
In this post, I joked about the complexity of mail-in rebate forms. It turns out that this is not a joke. It is in fact a deliberate swindle, which I am now quite sorry that I fell for. Ed Foster... MORE
January 8, 2005
Business Economics
Arnold Kling
The Glittering Eye points to this story on frequent flyer miles. By the end of 2004, almost 14 trillion frequent flyer miles had been accumulated worldwide, worth between 1p and 6p apiece. According to a new analysis by The Economist... MORE
September 20, 2004
Business Economics
Arnold Kling
The Economist writes, SO YOU want to withdraw cash from your bank account? Do it yourself. Want to install a broadband internet connection? Do it yourself. Need a boarding card issued for your flight? Do it yourself... Many people complain... MORE
August 23, 2004
Business Economics
Arnold Kling
Why are movie theaters gravitating toward large multiplexes? The Washington Post writes, With 16, 18 or 24 screens, the traffic in and out is constant and the popcorn sales never stop -- yet the staffing costs are only incrementally greater... MORE
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