Trial and Error Economy

Before we get to the good stuff, let’s review some history of economic thought. In 1920, the Austrian economist Ludwig von Mises argued that socialist economies would not be able to figure out what to …

Businesses trying to step up their game need measures of success or failure, or "metrics."  Getting the metrics right is important (though as always, don’t go overboard looking for perfection). McKinsey Quarterly just published a …

Seth Godin (though he does not use the phrase) understands the Trial and Error Economy.  He posts about figuring out where on-line pay-per-click advertising should appear.  This is like the most obvious example conceivable; how …

Howard Shultz, the CEO of Starbucks, is questioning the chain’s currently strategy.  His memo to senior staff was leaked, posted on the web, and discussed in the Wall Street Journal (subscription required).  Shultz cites several …

Plans sound great, but that’s not how the economy really works. When economists think about an economy with multiple goods and services, and a price for each, we sometimes ask, how does the real economy …