[lbo-talk] Pew: Bush lead gone, pres race "dead even"

[Wojtek Sokolowski]

Michael:
> 
> Question: Stiglitz recently won the [not the] Nobel Prize in Economics for
> his work saying that any reckoning of costs had to include the economics
> of obtaining information.  Has anyone ever attempted to extend his work
> towards an explanation of the regular occurrence of bubbles (which in
> standard economic theory aren't supposed to happen)?  The rational
> economics that keep information bubbles inflated (esp. as media become
> more integrated and "competitive"), and their predictable effect on
> collective and individual judgement (since they change the data on which
> decisions are made) seem made for his sort of analysis.  And on first
> sight, information bubbles seem more fundamental, more prevalent, and more
> explicable than economic bubbles.

This is the standard stuff of institutional sociology - the role of group
think, myths  and ex-post facto rationalizations in what supposed to be
'economic rationality' - see for example March and Simon, _Organizations,_
John Wiley and Sons, 1958, Cyert and March, _A Behavioral Theory of of the
Firm_ Englewood Cliffs, 1993, Meyer and Rowan, Institutionalized
organizations: Formal structure as myth and ceremony, _American Journal of
Sociology, 1977, 83:340-363, Charles Perrow, _Organizations_, Lee Clarke, _
Mission Improbable : Using Fantasy Documents to Tame Disaster_, 2001 (forgot
the publisher), also the last issue of the _American Sociological Review_
has three articles on stock market behavior.

Wojtek