Thursday, February 16, 2006

Theory Without Contracts

Professor Steven N.S. Cheung likes to tell this tale that happened in the late 1960s in his Chinese writings.

At a conference on marine fishing in Vancover, attendants were busy discussing ideas of a presenter right after he finished. Suddenly, somebody standing close by the window with a harbor view said in a loud voice, "Look at that, a fishing boat!" All of a sudden, everbody moved over to the window and watched it.

The professor used the story to make a mockery of those economists who do not know how the real world works. Think about it, a bunch of economists specializing in marine fishing had not seen a fishing boat before that day!

Out of curiosity, I flip through the most recent treatise in a field (contract theory) professor Cheung single-handedly invented in the late 60s in his monumental book "The Theory of Share Tenancy". The name of the treatise is called, surprise, surprise, "Contract Theory,"written by two renowned experts P. Bolton at Princeton and M. Dewatripont at ULB published by MIT press last year.

What I find is shocking:

1) A book more than 700 pages long, neither cited nor analyzed one single contract on planet.

2) There is NO acknowledgement of Cheung's contribution to the field! And yes, "The Theory of Share Tenancy" is not cited in the reference.

What has become of scholarship?

1 comment:

snowball said...

有病……if Cheung is not cited, is that a problem of Cheung or the authors? And look, this is not just peculiar to that book. Other contract theory books mention no Cheung whatsoever. I am not doubting the contribution of Cheung, but it seems you have become a blind-follower of him. He claime to have invented the contract theory. Apparently, this claim is not shared in the profession.