Uncertainty and Economic Evolution: Essays in Honour of Armen Alchian

BOOK COVER......Page 1
HALF-TITLE......Page 2
TITLE......Page 4
COPYRIGHT......Page 5
CONTENTS......Page 6
ILLUSTRATIONS......Page 8
NOTES ON CONTRIBUTORS......Page 10
INTRODUCTION......Page 12
REFERENCES......Page 14
1 RATIONALITY, EVOLUTION, AND ACQUISITIVENESS......Page 16
The difficulty in behaving rationally (and irrationally also)......Page 17
The positive profit criterion......Page 18
Irrationality and budget constraints......Page 21
Propagation through imitation......Page 22
Defining rational behavior......Page 23
Precondition for behaving rationally......Page 24
The acquisitive species......Page 25
NOTES......Page 28
REFERENCES......Page 30
INTRODUCTION......Page 32
THE DEBATE: EVOLUTION, LOCK-IN, OPTIMIZATION......Page 34
Complexity......Page 35
Chance and optimization......Page 36
Bounded rationality......Page 37
Evolution as an organizer......Page 38
Emergent order......Page 39
Coordination on a network......Page 40
Noisy evolution of coalitions......Page 42
Fitness on the path and at the rest point......Page 43
Conclusions......Page 45
Applications......Page 46
Conjectures......Page 49
REFERENCES......Page 50
INTRODUCTION......Page 52
EVOLUTION OF CLOSELY HELD FIRMS......Page 54
The benefits of uniformity......Page 55
The benefits of diversity......Page 56
The evidence on LLC evolution......Page 57
Non-efficiency explanation for spontaneous uniformity......Page 64
CONCLUSION......Page 65
NOTES......Page 66
REFERENCES......Page 71
WHY DO HOLD-UPS OCCUR?......Page 76
THE USE OF INCOMPLETE CONTRACTS......Page 79
THE SELF-ENFORCING RANGE OF CONTRACTUAL RELATIONSHIPS......Page 81
AN ILLUSTRATION: THE ALCOA-ESSEX CASE......Page 83
THE ROLE OF CONTRACT TERMS......Page 87
A PROBABILISTIC VIEW OF HOLD-UPS......Page 93
CONCLUSION......Page 94
NOTES......Page 95
REFERENCES......Page 97
INTRODUCTION......Page 100
WHY MONEY?......Page 102
MEASURING INFLATION......Page 103
THE EFFECTS OF INFLATION......Page 104
THE REAL MACROECONOMIC EFFECTS OF INFLATIONARY POLICY......Page 106
Data and price theory......Page 107
Econometric practice and the Phillips Curve......Page 108
CONCLUSION......Page 109
NOTES......Page 110
REFERENCES......Page 111
INTRODUCTION......Page 114
VERTICAL INTEGRATION AND APPROPRIABLE RENTS......Page 115
Recognition of rents and creation of Yellowstone......Page 117
Vertical integration to prevent rent dissipation......Page 121
Creating a commons......Page 123
CONCLUSION......Page 127
NOTES......Page 128
REFERENCES......Page 129
INTRODUCTION: EVOLUTIONARY REASONING AND CONSTITUTIONAL POLITICAL ECONOMY......Page 130
THE WEALTH OF NATIONS AND THE SEARCH FOR THE SOCIAL CONTRACT......Page 132
Institutional setting......Page 135
Economic and social conditions on reservations......Page 136
Explaining cross-tribe differences in performance......Page 137
CULTURAL NORMS AND NETWORKS OF SOCIALLY CONSTRUCTED RATIONAL INDIVIDUALS......Page 141
NOTES......Page 151
REFERENCES......Page 153
INTRODUCTION......Page 158
ENVIRONMENTAL QUALITY IN EASTERN EUROPE......Page 159
NOTES......Page 163
INTRODUCTION......Page 166
THE “COERCION” DEFINITION AND ITS LIMITATIONS......Page 167
PROBLEMS WITH DEFINING FREEDOM IN TERMS OF WEALTH......Page 169
Social customs and property rights which limit freedom but solve externalities and increase wealth......Page 171
Education and freedom......Page 173
FREEDOM AS AN “OPTION VALUE”......Page 175
CONCLUSIONS......Page 176
NOTES......Page 177
REFERENCES......Page 178
INTRODUCTION......Page 180
FREEDOM TO CHOOSE AS BUT ONE FACET OF THE FREEDOM TO ACT......Page 181
FREEDOM TO RESPOND AND TO FORM CONTRACTS......Page 182
FREEDOM TO HAVE EPIPHANY......Page 184
FREEDOM TO FIND SERENDIPITY......Page 187
Discovery as positive externality......Page 189
What should economists do?......Page 191
NOTES......Page 192
REFERENCES......Page 193
11 IN CELEBRATION OF ARMEN ALCHIAN’S EIGHTIETH BIRTHDAY......Page 196
NAME INDEX......Page 216
SUBJECT INDEX......Page 222