A Century of Economics and Engineering at Stanford

27 Pages Posted: 17 May 2019 Last revised: 14 Oct 2019

See all articles by Beatrice Cherrier

Beatrice Cherrier

CNRS; National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); University of Paris-Saclay - Ecole Polytechnique

Aurélien Saïdi

Université Paris Nanterre

Date Written: March 1, 2019

Abstract

This paper documents the disciplinary exchanges between economists and engineers at Stanford throughout the 20th century. We elucidate how this cross-fertilization was mediated by the institutional structure of the university. We outline the role of key scholars such as Kenneth Arrow and Robert Wilson, as well as engineers turned administrators like Frederick Terman. We show that engineers largely drew upon successive economic theories of decision and allocation with a view to improving practical industrial management decisions. Reciprocally, economists found in engineering the tools they needed to rethink production and growth theory (from linear programming to optimal control theory, an epistemology of “application” that emphasized awareness to institutional details, trials and errors and experiments to improve the design of processes and machines, and all sorts of industrial settings to operationalize their theories of decision, strategic interaction and bargaining. By the 2000s, they had turned into economic engineers designing markets and other allocation mechanisms. These cross-disciplinary exchanges were mediated by Stanford’s own institutional culture, notably its use of joint appointments, the development of multidisciplinary “programs” for students, the ability to attract a variety of visitors every year, the entrepreneurial and contract-oriented vision of its administrators, and the close ties with the industrial milieu that came to be called the Silicon Valley.

Keywords: Stanford, Economics, Engineering, Arrow, Wilson, History of Economics

JEL Classification: A10, A13, A14, B20, B29, B31

Suggested Citation

Cherrier, Beatrice and Saïdi, Aurélien, A Century of Economics and Engineering at Stanford (March 1, 2019). Available at SSRN: https://ssrn.com/abstract=3374621 or http://dx.doi.org/10.2139/ssrn.3374621

Beatrice Cherrier (Contact Author)

CNRS ( email )

3, rue Michel-Ange
Paris, 75794
France

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

University of Paris-Saclay - Ecole Polytechnique ( email )

55 Avenue de Paris
Versailles, 78000
France

Aurélien Saïdi

Université Paris Nanterre ( email )

200 Avenue de la République
Nanterre cedex, Nanterre Cedex 92000
France

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