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On decay
Robert Gibbons wrote:
When I first read Coase’s (1984: 230) description of the collected works of the old-school institutionalists – as “a mass of descriptive material waiting for a theory, or a fire” – I thought it was (a) hysterically funny and (b) surely dead-on (even though I had not read this work). Sometime later, I encountered Krugman’s (1995: 27) assertion that “Like it or not, … the influence of ideas that have not been embalmed in models soon decays.” I think my reaction to Krugman was almost as enthusiastic as my reaction to Coase, although I hope the word “embalmed” gave me at least some pause.
Thanks to several MR readers for recommending this paper. I would have written: "Like it or not, the influence of ideas soon decays."
Posted by Tyler Cowen on September 4, 2008 at 07:10 AM in Economics | Permalink
Comments
"Like it or not, the influence of ideas soon decays."
Not all ideas. Some ideas, e.g. Christianity, grew over time and arguably are still growing.
The same might be said of the scientific method, reading and writing, arithmetic, and many ideas that might be so important that we tend to take them for granted. There are certainly lots of ideas whose influence have grow on shorter time scales as well, e.g. women's rights, democracy, mathematical economics (decades); blogging, behavioral economics (years), etc.
I agree with your broader point, though. It's not obvious that formalizing ideas into models per se increases their longevity, although there does seem to be some correlation to my eye.
Posted by: a student of economics at Sep 4, 2008 11:12:21 AM
""Like it or not, the influence of ideas soon decays."
Not all ideas. Some ideas, e.g. Christianity, grew over time and arguably are still growing."
Maybe it's better to think of an idea as a stock which does decay over time without further investment. So some ideas decay because no one finds it worthwhile to continue to invest in them... maybe because they aren't especially productive.
How might formalizing an idea in a model help? Well, it might make it easier to use for other purposes (i.e., make it more productive), which may lead others to invest in it more. On the other hand, it might lead to an easier recognition of the underlying weakness of the idea, leading to a lot less (useless) investment in it.
So, then, hopefully formal modeling will increase the persistence of good ideas but decrease the persistence of bad ones.
Posted by: PLW at Sep 4, 2008 3:20:38 PM
I was going to say that everything decays, so it's trivial to talk about the influence of an idea decaying. But then it got complicated.
Start with this idea: everything decays. Then note that the influence of this idea is contained in everything. Yet the containment of the influence of this idea within everything is itself decaying. Thus the influence of this idea will become less contained within everything. That seems impossible. So not everything decays. Oh well.
This idea should have no influence. Or if it has an influence, hopefully it decays fast enough so we can read more about puffins.
Posted by: mpkomara at Sep 4, 2008 4:04:40 PM
Surely old institutionalist economics *ought* to decay, as institutions change. This is one of the strengths of institutional economics, not weaknesses.
Posted by: dsquared at Sep 5, 2008 4:16:30 AM
The citation for the published version of this excellent paper
by Robert Gibbons is, "Four formalizable theories of the firm,"
Journal of Economic Behavior and Organization, October 2005, vol.
58, no. 2, pp. 200-245. Yes, it is a biggie, but worth a full
read. In the quarter before the most recent one, it was the
most downloaded article from the journal.
Posted by: Barkley Rosser at Sep 5, 2008 1:01:52 PM
