See He Earns $33 an Hour as a Costco Cashier, Now He’s a Millionaire: Long-tenured workers like cashier Tony Barzar are reliable, experienced and able to speed shoppers through a checkout line-Costco is willing to pay to keep them around by Sarah Nassauer of The WSJ. I explain The Efficiency Wage Theory below after article excerpts:”Costco has…
Does Costco Follow The Efficiency Wage Theory?
Does Costco Follow The Efficiency Wage Theory?
13 Jul 2026 1 Comment
in applied price theory, entrepreneurship, industrial organisation, labour economics, labour supply, managerial economics, organisational economics, personnel economics
SpaceX and the New Geography of Corporate Governance
07 Jun 2026 Leave a comment
in economics of regulation, entrepreneurship, industrial organisation, law and economics, managerial economics, organisational economics, property rights
SpaceX may soon ask public investors to buy a piece of the future. The fine print may ask them to buy something else, too: a theory of corporate governance. The company’s reported initial public offering (IPO) has already drawn significant concern from institutional investors and corporate-governance observers. That concern is understandable. SpaceX reportedly seeks to…
SpaceX and the New Geography of Corporate Governance
Abolishing HR
05 Jun 2026 Leave a comment
in entrepreneurship, human capital, labour economics, labour supply, managerial economics, organisational economics, personnel economics
News.com.au reports: A high-profile tech CEO has sparked debate after revealing he quietly axed his entire human resources department earlier this year. Ryan Breslow, CEO of Bolt Financial, claims the HR team at the fintech firm was “creating problems that didn’t exist” and fostering a culture of complaining rather than productivity. “The problems disappeared when…
Abolishing HR
SpaceX and the New Geography of Corporate Governance
04 Jun 2026 Leave a comment
in applied price theory, entrepreneurship, industrial organisation, managerial economics, organisational economics
SpaceX may soon ask public investors to buy a piece of the future. The fine print may ask them to buy something else, too: a theory of corporate governance. The company’s reported initial public offering (IPO) has already drawn significant concern from institutional investors and corporate-governance observers. That concern is understandable. SpaceX reportedly seeks to…
SpaceX and the New Geography of Corporate Governance
Absurd Cost Overruns Are a Bipartisan Problem
30 May 2026 Leave a comment
in applied price theory, economic history, industrial organisation, managerial economics, organisational economics, survivor principle, theory of the firm
Regarding the pervasive problem of cost overruns (defined as government programs and projects that wind up costing far more than initial estimates), I’ve always appreciated this image sent by a reader. It nicely captures a key reason for cost overruns, which is that there is no bottom-line incentive for bureaucrats and politicians to monitor costs. […]
Absurd Cost Overruns Are a Bipartisan Problem
The Paramount Question Isn’t Paramount
17 Apr 2026 Leave a comment
in applied price theory, economics of media and culture, economics of regulation, entrepreneurship, industrial organisation, law and economics, managerial economics, market efficiency, movies, organisational economics, politics - USA, television Tags: competition law, creative destruction, merger law enforcement
Big mergers make headlines. They don’t always make antitrust problems. In a previous commentary, I explored the antitrust implications of a potential acquisition of Warner Bros. Discovery (WBD). That uncertainty is now resolved. On Feb. 27, Paramount Skydance Corp. agreed to acquire WBD for roughly $110 billion in enterprise value—$31 per share, all cash. The…
The Paramount Question Isn’t Paramount
Claudia Goldin and the WNBA
30 Mar 2026 Leave a comment
in applied price theory, discrimination, gender, human capital, labour economics, labour supply, managerial economics, occupational choice, organisational economics, personnel economics, sports economics Tags: gender wage gap
After Claudia Goldin became the first woman to win a solo Nobel in economics in 2023, she received hundreds of invitations and requests. She accepted just three. One of them was advising the WNBA players union as the women prepared to negotiate a new labor deal with the league. When Goldin replied via email to Terri Carmichael Jackson,…
Claudia Goldin and the WNBA
Cost Overruns Are Bad for Taxpayers, Good for Insiders
14 Mar 2026 Leave a comment
in applied price theory, comparative institutional analysis, economics of bureaucracy, entrepreneurship, industrial organisation, managerial economics, market efficiency, organisational economics, Public Choice
My First Theorem of Government is the simple observation that insiders are the biggest beneficiaries of government. I was motivated to release that theorem because bad news for taxpayers is good news for bureaucrats, consultants, contractors, lobbyists, and politicians. A classic example is the Department of Education in Washington, which has squandered more than $2.6 […]
Cost Overruns Are Bad for Taxpayers, Good for Insiders
The Hidden Cost of Hard-to-Fire Labor Laws: Why European Firms Don’t Take Risks
08 Mar 2026 Leave a comment
in applied price theory, economics of bureaucracy, economics of regulation, entrepreneurship, labour economics, law and economics, managerial economics, organisational economics, personnel economics, property rights, Public Choice, theory of the firm, unemployment Tags: creative destruction, employment law, European Union, Germany
In our textbook, Modern Principles, Tyler and I write: Imagine how difficult it would be to get a date if every date required marriage? In the same way, it’s more difficult to find a job when every job requires a long-term commitment from the employer. In two new excellent pieces, Brian Albrecht and Pieter Garicano…
The Hidden Cost of Hard-to-Fire Labor Laws: Why European Firms Don’t Take Risks
Changes in the Gender Wage Gap for Business Professionals
14 Feb 2026 1 Comment
in applied price theory, discrimination, economics of education, gender, human capital, labour economics, labour supply, managerial economics, occupational choice, organisational economics, personnel economics Tags: gender wage gap
In the United States, much of the gap in earnings between men and women is due to the persistent gap for high wage earners. This paper explores changes in the gender wage gap for MBAs graduating from a large public university over 30 years. We document large gender wage gaps on average, which grow in…
Changes in the Gender Wage Gap for Business Professionals
A functional organization helps Apple innovate
20 Jan 2026 1 Comment
in entrepreneurship, industrial organisation, managerial economics, organisational economics Tags: creative destruction
HBR: SUMMARY:THE CHALLENGE: Major companies competing in many industries struggle to stay abreast of rapidly changing technologies. ONE MAJOR CAUSE: They are typically organized into business units, each with its own set of functions. Thus the key decision makers—the unit leaders—lack a deep understanding of all the domains that answer to them.THE APPLE MODEL: The company is organized…
A functional organization helps Apple innovate
If this is employment law, the law needs to change
22 Nov 2025 Leave a comment
in economics of regulation, industrial organisation, labour economics, labour supply, law and economics, managerial economics, occupational choice, organisational economics, personnel economics, politics - New Zealand, property rights, Public Choice, transport economics, urban economics Tags: employment law
Eric Crampton writes – Yesterday [November 17], the Supreme Court ruled that Uber did not merely facilitate connections between four drivers and their various passengers – as Uber has maintained. And that the four drivers were not contractors for Uber either. Instead, those drivers were Uber employees while logged into the app.
If this is employment law, the law needs to change
Does the state need to own houses to help families?
01 Nov 2025 Leave a comment
in applied price theory, economics of bureaucracy, industrial organisation, law and economics, managerial economics, market efficiency, organisational economics, politics - New Zealand, property rights, Public Choice, public economics, urban economics Tags: public housing, state ownership
A good report from the NZ Initiative that looks at whether ownership of state houses is the best way to help low income NZ families with housing. Some key extracts: That $29,000 per unit estimated cost is not the cost of income related rents – they are the same regardless of whether the state or […]
Does the state need to own houses to help families?
Irony: quitters are making tobacco companies rich
01 Nov 2025 1 Comment
in applied price theory, entrepreneurship, industrial organisation, managerial economics Tags: economics of smoking
ANALYSIS from the Economist: When lots of people smoked, there were many “price-elastic” consumers. In plain English, they were sensitive to increases in the cost of a cigarette. As more people have quit, however, only the most committed smokers are still puffing. Companies have responded by raising prices at an ever-quicker pace. MY COMMENT: In…
Irony: quitters are making tobacco companies rich
What Do Managers Do?
26 Sep 2025 1 Comment
in applied price theory, managerial economics, organisational economics, personnel economics
Economists have been thinking for a long time about the operation of buying and selling in markets. However, they have traditionally spent less time studying what happens inside a firm–a setting in which forces of supply and demand are replaced by managerial decision-making. Anyone who has had both a good boss and bad boss knows…
What Do Managers Do?
Utopia, you are standing in it! 
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