A list for my doctor program in the next 3, 4, 5 years
Research Interests (content):
- the economic institution of post-war Japanese economy (Economic History)
a) Japanese-style market/enterprise system (origin, forming, change, mechanism)
i) intro-firm relationship: life-time employment, personnel system, …
ii) inter-organization relationship: subcontracting system*, keiretsu or cross-shareholding, mainbank system, industrial policy, …
- empirical study on organizational ecology (firms and industries in Japan as target)
a) firm’s life expectancy*
b) organizational obsolescence & organizational senescence
c) the impact of large firms on industry/market groups
d) the relationship with group density and organizational performance
Research interest (theory)
- new institutional economics, transaction cost theory
contract theory (+ information theory & game theory)
3. organizational economics
- indicates main focus
Core questions that I am interested in:
- Why firms exist? risk taking? lowering transaction costs (what specific costs)? incentive function? information sharing function?
(note that the reason why firms are established are somehow different from the above one. Firm may begin with irrational risk taking but given firm is almost the most successful organization in human society in last 200 years, in general it must take advantage of some general capability to exist in the market.)
How does inter/intro-organization coordination be established, developed, maintained, and destroyed?
=> Why asset specificity problem or other similar ones can be solved by long-term inter-firm relationship in some cases?
- Why firms fail? Is it organizational obsolescence or senescence?
How do information costs affect choices searching, decision making, thus utility maximization and cost minimization on individual and organization?
=> people (either in the market or in the firm) find their choices sets and make decisions based on their specific and limited information sets, which includes both transient information and consistent one- knowledge. It takes costs (mostly time, or in other words, opportunity costs) to get these information, especially for the transient one as one would need them whenever making decision. That’s why they usually rely on knowledge (or in some condition would be called culture, norm or even instinct. the last is generally regarded as something not from learning, but that maybe not true as instinct surely comes from genetic learning and social learning), considering the risk of making wrong decision and the opportunity costs of searching for nothing, which economic historian would call path dependence. While new information involves, they change their decision (i.e. utility maximization) based on a adjustment on information set very similar to Bayesian probability.
The costs of information search itself is also depended on the individual’s specific information set, more specifically the knowledge about information searching skill and the distribution and possibility of outcome of information searching. Though Simon would call it bounded rationality with the classification of satisfy and suffice.
As any information sets are limited, perfect market do not exist even if every one is price-takers (and actually this is wrong. everyone can become price-maker. Advertisement is a case of price control by selling information). And we actually cannot imagine a world with zero information costs, thus also a world with zero transaction costs like what Demsetz argued. This also creates the question like short sights, or to be more specific, the different capability of calculating a present value or future value of utility maximization based on individual’s limited information set.
Consequently, the organization is not only a place for coordinating producing (they can do this by using market contracts), but also a place for information sharing (along with other functions like incentive function). For Knight, firm works like the entrepreneurs takes risks given their nature of risk neutral or risk seeking, who offering the risk-averse employees a promise of wage or share of profit. However, it also works like a information searching version division of work- entrepreneurs seek information and share it with employees – which is another way to see the order and hierarchy. (Rather than you find choices, decide and then execute, someone else do that for you.)
We can never get to the perfect market. Thus we always have the potential to do better.
- What is incentive? How does it work?
2017/11/01 About research and study
This summer I learned some game theory and contract theory, but only the basic parts. Most of sophisticated content haven’t been reached. My math is still poor, time is needed for a systematic review, not only for math, but also for Microeconomics textbooks like Kreps or Rubinstein. I still read too less about Williamson, not to mention Hart and Holmstrom. And Gibbons and Roberts with their 1000+ page handbook of organizational are a large mountain waiting ahead. And I think I should review some more about Demsetz and Alchian, maybe also some Stiglitz. And some classical models in 1980s like Milgrom or McMillan＆McAfee haven’t been studied. In terms of economic history, I finally read some Greif, but not enough for learning how to use game theory in economic history. Maybe I should also find some time to read North and Acemoglu. Anyway, we read too less about post-war Japan and the Japan’s market system. They maybe the most emergence. And I should do more search about the database and data source covering this period. This semester I learned some labor economics and econometric skills like RCT, IV, DID, FE, RDD…, still the very basic knowledge, and I want find some time to read the most harmless econometrics. By the way, last month I learned markdown and latex, but only the simplest part of later. I have been studying the Python for a while, but knowing nothing except some basic commands and functions. I download two 600+ pages textbooks yesterday and try to learn Numpy Pandas Matplotlib Scipy more systemically. And finally my paper! I read again my paper written half years ago and find it is a shit. I need gather more data and do a better and more original and more creative and more meaningful analysis if I don’t want to just give up it. And I need think of the idea for the next one sooner or later. Speaking about my paper, just forget that the I haven’t get progress on the study of organization ecology for a while. Oh, and never forget that I need to improve my English and Japanese as they are just so poor.
I am frustrated.
Let me get a clue. The fundamental part of my research target should be the post-war Japan with its enterprises and market system. I should be a pro about this part when I finish my Phd course. This should be the top of the pyramid, and I should study it as thoroughly as possible. There are three theoretical ways to approach this content. One is the basic and traditional economic history method, which I actually don’t know what it is except reading more and more about the arguments and the history itself. The second is the contract theory and game theory as well as transaction cost theory. They help me to approach the organization in the history from a powerfully microeconomic side. The third is the organizational ecology or other close field. They would help to approach the organization from a more macroeconomic or say overview perspective. Taking the first method as the same as the content, the remaining 2 part should be the second layer of the pyramid. The remaining are other theories like information economics, labor economics, search theories, other parts of organizational economics, other economic history, culture evolution, strategic management … and basic knowledge like microeconomics and econometrics. I should not take too much time on them, perhaps. However, Python is still important I think because I may need it to find me a job given the competition and difficulty in academia… Anyway, I need more focus on my own paper though I always think without a systemic study I can only write rubbish…
I am still frustrated, maybe a little bit less…