I am teaching my Law, Economics, and Organization class this semester. The class is for upper-level undergraduates and graduate students, so there is a good variety of backgrounds and interests among the students who enroll in it.
Since the class is a seminar, I spend about half the time teaching, with the other half spent discussing specific papers.
Last Friday, in the context of the module on relational contracts, we discussed two classic papers. The first is Greif’s (1993) paper, in which he discusses the various mechanisms used by 11th-century Jewish merchants around the Mediterranean to sustain long-distance trade. The second is Bernstein’s (1992) investigation of how diamond traders choose to “opt out” of the legal system by developing their own extra-legal institutions.
Hustle and Flow
In the spirit of both articles, I wanted to link to a somewhat dated article in Wired, a Q&A with Robert Neuwirth, who published a book titled Stealth of Nations: The Global Rise of the Informal Economy last fall. Here is an excerpt:
Our Risk Perceptions Do Not Make Much Sense
So much of what we think and do about risk does not make sense. (…) In Europe, where there are more cell phones than people and sales keep climbing, a survey found that more than 50 percent of Europeans believe the dubious claims that cell phones are a serious threat to health. And then there’s the striking contrast between Europeans’ smoking habits and their aversion to foods containing genetically modified organisms. Surely one of the great riddles to be answered by science is how the same person who doesn’t think twice about lighting a Gauloise will march in the streets demanding a ban on products that have never been proven to have caused so much as a single case of indigestion.
That’s Dan Gardner, in the introduction to his 2009 book Risk: The Science and Politics of Fear. Gardner also has another book out titled Future Babble, on the lack of accountability — not to mention the lack of accuracy — of experts making predictions.
I have the students in my Law, Economics, and Organization seminar read the beginning chapters of Gardner’s book as part of our in-class discussion of risk sharing and incentives, and they usually find Gardner’s book to be thought-provoking.