By Bryan Caplan
In 1999, when internet commerce was still in its infancy, Klein published Reputation: Studies in the Voluntary Elicitation of Good Conduct. Seventeen years later, e-commerce towers before us, resting on a foundation of reputational incentives – everything from old-fashioned repeat business to two-sided smartphone reviews.
In 2003, long before Uber, Airbnb, or serious talk of driverless cars, Klein published The Half-Life of Policy Rationales: How New Technology Affects Old Policy Issues. This remarkable work explores how technological change keeps making old markets failures – and the regulations that arguably address them – obsolete. (Here’s the intro, co-authored with Fred Foldvary). Fourteen years later, the relevance of Klein’s thesis is all around us. Transactions costs no longer preclude peakload pricing for roads, decentralized taxis and home rentals, or full-blown caveat emptor for consumer goods. So why not?
I’m not going to say that Klein caused these amazing 21st-century developments. But he did foresee them more clearly than almost anyone. Hail Dan Klein!