Coordination Problem

IHS Grants to Inspire Students

The Institute for Humane Studies is now accepting proposals for educational activities that serve to impart understanding about the principles and practices of liberty and free markets.

Projects could include research assistantships, student reading groups, speaker series or workshops, colloquia, debates, movie viewings,  but we are looking for any proposals that offer innovate and creative ways to inspire students.

The Hayek Fund for Faculty Student Educational Activities application (www.theihs.org/hayek-fund) takes approximately 10-15 minutes to fill out. The funds are limited and disbursed on a rolling basis, so we encourage you to apply now and no later than April 31 for projects this semester or this fall.

If you have any questions about the fund or for ideas about what projects have been most successful, contact Hayek Fund Director, Amanda Winther-Schorsch (awschorsch@ihs.gmu.edu).

Don Boudreaux on Ludwig Lachmann

|Peter Boettke|

Don Boudreaux has an excellent appreciation of the ideas of Ludwig Lachmann that I highly recommend.

Dan Klein's Knowledge and Coordination --- come join us

|Peter Boettke|

Today (Wed, March 28th) at 5:00pm in Enterprise Hall Rm. 80, we will have a public forum on Dan Klein's new book, Knowledge and Coordination (Oxford, 2011).  The panel discussion will feature not only Dan providing a basic overview, but Deirdre McCloskey providing commentary on the larger themes that Klein's work raises not only for the practice of economics but for the realization of the "good society".

Update on Living Economics --- website at Independent Institute

|Peter Boettke|

The Independent Institute has now established a website for the book.  We will establish a page for the book at the Hayek Program site as well in the future and will update once established.

The F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics

|Peter Boettke|

I am pleased to announce the formal launch of the F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics (PPE) at the Mercatus Center at George Mason University.

I hope you will find this website a useful gateway to information on our research and graduate education programs. 

When George Mason University started its PhD program in the early 1980s, F.A. Hayek gave one of the first public lectures on his work that would later be published as The Fatal Conceit. Hayek's path breaking work in philosophy, politics and economics was a source of inspiration for the faculty and graduate students at George Mason University. Future Nobel Prize winners at George Mason University, James Buchanan and Vernon Smith, in their own respective ways developed Hayek's ideas even further.

Our research group draws on the insights of all three of these Nobel Laureates, as well as the work of Ronald Coase, Douglass North, and Elinor Ostrom, to form our own unique blend of research in political economy. Our students are trained in the conventional methods and methodology of economics as well as the interdisciplinary approach to political economy that the PPE label is intended to convey.

I welcome your feedback and interest in becoming involved with our program. We will keep this website continually updated with information concerning our working papers, articles, and books as well as the journals and book series that our faculty edit and the seminars and special events we organize in the hopes that it will prove a useful resource to you and your students.

 

Inclusive/Predatory; Exclusive/Predatory; Exclusive/Non-Predatory; Inclusive/Non-Predatory States and the Wealth of Nations

|Peter Boettke & Chris Coyne|

Bill Easterly has a lengthy review of Acemoglu and Robinson's Why Nations Fail in the WSJ.  It is a very insightful review and for the careful reader it touches upon contemporary research in development economics at the analytical, empirical, and most importantly methodological level.

Throughout the book, Acemoglu and Robinson rely on comparative historical case studies to illustrate their main point about the need for the elites to bargain with the citizens and establish an inclusive state, as opposed to establishing a exclusive state.

Early in his review essay Easterly raises a challenge to the current methodological fad of randomized controlled experiments in development economics, but he also raises a methodological objection to the use of comparative historical case studies.  He wonders about "cherry picking" on the one hand, and "ex post rationalization" on the other.  His objections are not new, see Jon Elster's APSR essay, "Rational Choice History: A Case of Excessive Ambitions."

We attempt to address these methodological objections to comparative historical analysis in our paper, "Comparative Historical Political Economy" (with Pete Leeson).  Our defense boils down to the selection of the cases --- pick those which are the least favorable to your hypothesis --- and to the detailed analysis of the institutions under question rather than merely retro-fitting history to a rational choice behavioral model.

The great strength of the comparative historical case study approach to political economy is that done correctly it avoids the problems that large scale empirical testing confront when attempting to provide institutionally rich explanations.  It permits a more detailed examination and unbundling of institutions --e.g., we cannot so neatly divide political institutions into inclusive or exclusive.  What matters most for comparative analysis of the relationship between peace and prosperity is the predatory nature of private and public institutions.  If the institutions established are able to curb predation, peace and prosperity follow; otherwise they do not.  Within this context, Acemoglu and Robinson's contribution is an important one.

Living Economics: Yesterday, Today and Tomorrow

|Peter Boettke|

"It is customary for many people to blame economics for being backward," Mises wrote in Human Action. "Now it is quite obvious that our economic theory is not perfect. There is no such thing as perfection in human knowledge, nor for that matter in any other human achievement. Omniscience is denied to man. The most elaborate theory that seems to satisfy completely our thirst for knowledge may one day be amended or supplanted by a new theory. Science does not give us absolute and final certainty. It only gives us assurance within the limits of our mental abilities and the prevailing state of scientific thought. A scientific system is but one station in an endlessly progressing search for knowledge. It is necessarily affected by the insufficiency inherent in every human effort. But to acknowledge these facts does not mean that present-day economics is backward. It merely means that economics is a living thing--and to live implies both imperfection and change."

What I Have Been Reading --- Kindle Edition

|Peter Boettke|

On my Kindle at the moment -- non-fiction -- includes a few titles which readers of CP might find of interest:

Tim Taylor, The Instant Economist

Tim's the long time managing editor of the Journal of Economic Perspectives and he blogs at The Conversable Economist.

Norbert Haring and Olaf Storbeck, Economics 2.0

This book provides an overview of many contemporary ideas related to behavioralism, happiness, etc.

Both books are against "basic economics" and classical economics, and emphasize the deviations from rationality and from perfect markets.  Both are extremely well-written and well worth the read.

 

The 20th Anniversary of Hayek's Death

Steven Horwitz

In remembrance of the death one of this blog's favorite thinkers, I invite our esteemed commentariat to contribute their personal favorite Hayek quotes in the comments below.  I won't even start it off because I know there are so many good ones that folks will bring to the table.

Economics Everywhere --- Basketball Edition

|Peter Boettke|

Coach Jim Larranaga is one of the most intriguing coaches in all of NCAA basketball.  Peter Keating did a profile on Coach L in ESPN The Magazine last month, focusing on his use of statistics to help with establishing performance measures for his teams.  Larranaga was an economics major back at Providence College, where he also scored over a 1,000 points on the basketball court.  Larranaga attributes his success in coaching through the ranks of NCAA D1 schools (inclduing his great run at GMU) to analytics.  See the article  Download ESPN The Magazine_2012_ In the interest of full disclosure I was interviewed for the article, and even quoted -- perhaps one of my most cherished citations!!!!  Though what I was cited for is not a full reflection of what we talked about, but the discussion of Coach L's defensive system which is discussed was something I talked about in-depth (but so would anyone who follows the game closely).

Coaches for years have been utilizing various statistics to help assess individual performance and improve team success.  Coach L also uses various measures to help in putting his team together.  Among my personal favorites, is the statistics concerning scores off the pass versus scores off the dribble to assess your teams offensive ball movement.  See the thing that can kill your offense is lack of ball movement and in contemporary basketball what we call "first side threes".  Instead, you want the ball to move, perferably at least 3 sides of the floor (e.g., right, center, left) before a shot, and you would like to play the game inside-out, rather than outside-in.  Getting your players to consistently play that way, however, is not as easy as it sounds.

Burried inside the article, however, is a great example of how Coach L utilizes incentives to try to get his players to play the way he wants them to.  Last season (while Coach L was still at GMU), U of Miami was a team prone to turnovers.  Coach L does not tolerate his teams being that careless with the ball. So when he started working with the team this year, one of the first things he did was to let them scrimmage but with a rack of 12 balls on the sideline.  Whenever a turnover was committed, Coach L would remove a ball from the rack.  When the rack was empty, the players had to run without a ball for the time remaining whether that was 5 minutes, or 2 hours.  At first, the players continued to be careless with the ball and scrimmages turned into pure conditioning rather quickly.  But it didn't take long, and the players started to take care of the ball.  Coach L calls this "incentive thinking".

As any coach/teacher knows, such "incentive thinking" is essential to getting your players/students to do what you want them to do.

 

UPDATE: U of Miami had a strong season with victories over Duke and ACC champs Florida State.  They didn't get a bid to the NCAA, but competed in the NIT.  Last night their season came to an end with a 20-13 record with a loss to U of Minn.  Still a very strong start to the Larranaga era at U of Miami.