Data and theory in economics

Noah Smith on the Nobel for the architects of the “credibility revolution” in economics: Anyone who expects the credibility revolution to replace theory is going to be disappointed. Science seeks not merely to catalogue things that happen, but to explain why — chemistry is more than a collection of reaction equations, biology is more than …

A definition of culture

From an NBER review of the economics of company culture. The authors describe the varied ways “culture” has been defined, not just with respect to companies, and then offer this list: A sensible list of elements in that package, though neither nearly exhaustive nor likely satisfactory to all, is as follows, adapted from a variety …

Fixing the internet

The other day I rewatched one of my favorite talks about the internet, a 2015 lecture on algorithmic decisions by Jonathan Zittrain of Harvard Law School titled “Love the processor, hate the process.” Like all his talks, it’s funny, wide-ranging, and hard to summarize. But I think reflecting on it you can see him proposing …

Durkheim on empiricism and economics

From 1938: “The famous law of supply and demand for example, has never been inductively established, as should be the case with a law referring to economic reality. No experiment or systematic comparison has ever been undertaken for the purpose of establishing that in fact economic relations do conform to this law. All that these …

The political economy of attention

A review paper from NBER hits on something I’ve been thinking about lately: how media and attention factor into political economy. How do groups of people coordinate to take political action? When are they able to overcome free rider problems? These are central questions in political economy, and one line of thinking says that smaller, …

Software, management, competition

Software startups often target applications that many companies share – accounting, human resources, communications, etc. Companies want to digitize by purchasing off-the-shelf software. No one creates software for processes that underly their unique competitive advantages. They buy excess capacity in departments that aren’t their core business instead. That’s one of many interesting bits from this …

Notes on innovation economics

This post is just to link together a few resources I want to keep track of, occasioned by the publication of a concise review of innovation economics by NBER this week. “Innovation: Market Failures and Public Policies”, by Kevin A. Bryan and Heidi L. Williams, 2021. A 60-page summary of innovation economics, both theory and …

Bias in the market for change

Earlier this year I wrote about loss aversion and politics. Here’s a quick snippet on this from Felix Oberholzer-Gee’s excellent new book Better, Simpler Strategy. He’s covering three cases of technological change (radio, PCs, and ATMs) and notes that while they were expected to be pure substitutes for records, paper, and bank tellers, respectively, they …