Thursday, November 29, 2007

Citing Sources & the Coase theorem

Why the hell do scholars (and organizations) make it so hard to cite their work properly? Just put the information up in the standard author-date format and save people the annoyance of (n.d.) or (volume, page, ect. unknown).

The paper which motivated this is an old economics classic: Coase's paper on social costs which resulted in the famous Coase theorem. It is published on a website, and there's not enough on the PDF to source it properly.

The paper is well-worth reading, anyway, as it is a landmark in the study of welfare economics and externalities. It's at the bottom of the Wikipedia link: (another disadvantage of PDFs: they are hard to link - link goes to the PDF).

The point he raises is a valid one. Simply cutting off an activity which imposes externalities could just reverse the externalities, as it would put, say, factoryworkers out of work and leave the owner of the factory screwed. That's why people cognizant of externalities do not advocate simple shutdowns: they advocate taxes and payments to the people who are being affected. If the activity can't afford to pay the social cost that its private activity generates, then it should be shut down, because that activity imposes net costs on society.

Coase's argument is that in a system with well-defined property rights, two people will work out externalities through bargaining. His greatest assumption, however, is information. Imperfect information, as always, prevents the "free-market" from working efficiently. Imperfect information is further complicated when the externalities are distributed over a wide range of people (say, the population of the world), and the effects are long-term (global warming, water shortages, ecosystem collapse).

Friday, November 16, 2007

Citing Sources

It's high time that newspapers, blogs, and everyone else began citing sources. Footnotes need to be integrated into all of their word-processing softwares, and the use of them should be required. Footnotes are much more efficient in a digital world than parenthetical citations; within 5 years every source could be digital and immediately verifiable.

Would the newspaper which began really citing its sources have a competitive edge? I think so. Why hasn't one appeared? Another interesting case of market failure. Maybe I should start one.