My first impression is "who is Ostrom?". That is of course absurd. As I see it now, these are (Ostrom and Williamson) serious and worthy choices.
I have admit that Professor Ostrom's name was off my head this noon. But when I was looking through her brilliant work "Governing the Commons: The Evolution of Institutions for Collective Action" on Google Books, I was almost sure I encountered her in the "Intro to New Institutional Economics" course by 周其仁, one of the best courses I took in PKU.
My "lay-man" impression of Professor Williamson is that he is one of the "synthesizers" of New Institutional Economics. His comprehensive study of "hierarchical structure" in the economy is not "simple" and "clean", thus not very easy to follow and not as impressive as Olson or Coase. But I do remember I once tried very hard to read him, feeling him a giant on giants' shoulders.
Professor Ostrom and Professor Williamson's contributions can be best (arugbly) summarized in the press release here. (http://nobelprize.org/nobel_prizes/economics/laureates/2009/press.html) Basically, their works remind us that "institutions" (non-individual players in the market) are not "marginal", "exogenous" (I could be wrong, but what this weird world means in economics, under many circumstances, is "out of our scope", "disregard it"), "pre-determined", as they are in the problem sets I am doing right now. They are real, crucial, thus very worth-interpreting. The intuition to take away from Ostrom's work is that finding "the tradedy of commons" (mostly on a piece of paper) and bringing up the "internalization prescription" may be over-simplistic. People are not stupid, people know the danger of "tradedy of commons", so they must do things to stop it, at least they should have tried. What did they do? And why did some of those work? Similarly, hierarchical structure is not something easy for aloof physicists to figure out. Yet they are so prominent in common lives. They are not there for nothing either. I couldn't recollect Williamson's comprehensive logics, but basically he examined the function and the functioning of the full-of-friction (what those physicists hate) hierarchical structures in solving conflicts and stabilizing.
Those physicists can think of these studies as a "deviation" or "derivative" of their fictionless world of homo economicus. But I think they are not. Assuming people to be something they are not will not, assuming the market to be something it is not, will never lead us to sensible analysis and good policies. Seeing "through" the reality is something really really difficult, but that should be the goal. Math? OK. But appealing to physicists' states of mind is not helpful.
What I feel unfortunate about nowadays economics are .... (omitted, I love this subject overall), it is therefore nice to have book-writing, common-sense-following, real-world-observing, English(as opposed to math)-and-graphs-user, Nobel economics Prize winners.
Hail to Elinor Ostrom from Indiana University (NOT University of Indiana!!), and Oliver Williamson from Berkeley!
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