Three Americans shared the 2007 Nobel Prize in Economics “for having laid the foundations of mechanism design theory.” They owe an intellectual debt to Friedrich Hayek. His 1945 American Economic Review article, “The Use of Knowledge in Society,” focused on the distribution of knowledge and the difficulty of coordinating behavior from a central location. While […]

I recently met with an intelligent and highly successful young man deeply involved with our community. Most of those with whom he deals are part of young families, many having arrived here in the past few years, just as Bozeman was booming. He began our conversation with this statement, “I’m no economist, but I think […]

Economists have no monopoly on tools explaining the pathologies that afflict organizations. However, their approach offers some illuminating insights. Here’s one—within an organization decisions are made on the basis of information and incentives faced by the decision maker. Consider business practices that alienate customers and clients. Surely no business with a general clientele, such as […]

I’ve become interested in Bozeman’s concern with “bad grass.” Several letters to the Chronicle have condemned large bluegrass lawns, the kind that looks so good when luxuriating in ample moisture. They urge public condemnation, regulation, and a move toward xeriscape lawns that have low water requirements. Some recommend mandating small lawn areas with drought-tolerant grasses […]