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Decision Making as Output and Bounded Rationality

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  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra
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The Economics Origins of BCG Matrix

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  Economics has diversity of applications across streams. The applications range from management to business studies to national economies to politics to societies to history among others. Economics by its very nature has direct applications in the field of business theory. Many business theories, concepts, models, principles or whatever they might be have their origin in the domain of economics. The past posts have discussed such examples from the field of management theory that can be traced to economic roots. One such application that would be discussed in the current post would be the Boston Consulting Group (BCG) Matrix. Sometime back, there was a discussion on the application of BCG matrix in the context of sports popularity and innovation. The current post however would seek to locate BCG matrix in the context of economic theories and models.   As is well known to students of management, BCG matrix finds its application in product portfolio management. The products in the fi
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Minister's English and the Indian Elite

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  The reshuffle in the Modi cabinet has led to quite a few new ministers taking charge of new departments. A closely watched department in the current backdrop was the Ministry of Health hitherto headed by Dr. Harshvardhan who was dropped from the Cabinet. He was replaced by Mansukh Mandaviya who found himself promoted from the Minster of State rank to the Cabinet rank. The limousine liberals who are more than eager to find flaws dug up an old tweet of Mandaviya on Gandhi and used this to begin mocking the English of the Minister. It is possible that the Minister is not well versed in English with perhaps his studies being in Gujarati. The language of English might hardly matter in his work but the fact he cannot speak English is a reason good enough to be mocked at and be questioned about the fitness to be a minister.   This brings to the fore the question whether the language becomes critical in terms of being a minister at the centre or the states. In more precise terms, it is t
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Decoding the Cabinet Reshuffle

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  It was hardly a routine cabinet reshuffle. The reshuffle coming almost in the middle of the term was essentially a reset of the government in the run up to the elections of 2024. It was equally about those were dropped as much as it was about those who were inducted or promoted. At one level, it is a step towards elimination of independent charges being handed to ministers of state. At the same time it was about the performance being the absolute parameter with reputations hardly counting anything. It would not save some senior figures while it would induct quite a number of relatively young parliamentarians perhaps giving them a chance to prove themselves. There were some losers and few gainers as usual but the unmistakable signs of PM’s footprint was visible throughout. There appeared to be strong homework with respect to the competencies and the castes. The ministry was not about competency alone but an integration of the same with the caste and regions. In other words every regio
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Central Encroachment into Cooperatives

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  The Modi government is set for a Cabinet reshuffle. In the midst of the reshuffle, there come the news of creation of new Ministry. The ministry is of the Department of Co-operation. The intended objectives seems to be facilitating the growth of cooperative societies across states and build by multi state cooperative societies. The cooperative movement while having roots across states is confined in terms of its structure to a single state and cannot go beyond the boundaries of the state or perhaps the district. Amul for instance would be confined to Anand district and not go beyond the same. The same thing would perhaps hold good for Karnataka Milk Federation. This is true of many cooperative societies across the country. The ability to leverage the scale and scope is constrained thanks the legislative framework in place. If there needs to be changed to allow the successful cooperatives to flourish, there needs to be changes in the legislative and governance framework.   There m
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People and the Third Wave of Chinese Virus

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  The second wave of the Chinese virus induced pandemic seems to have abated in most parts of the country. Yet Kerala continues to defy the projections. Maharashtra too continues to report high number of cases. The scenario in North Eastern States too is not very encouraging though in absolute numbers seems less. The situation however has improved in northern and western states where the cases have dropped down dramatically. The states in the South apart from Kerala seem to be under control though the numbers are still high for comfort. In this backdrop, the states and union territories are opening up their economies and societies. While there are restrictions, the economy seems to be moving back to the days of pre-second wave. The business is likely to pick up in the weeks coming ahead. Yet while one seeks to recover from the second wave, the fear of a third wave seems to linger on. There is a feeling that this might impact children more and thus a need to prepare for them.   Seco
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Teaching Economics: Complement Rather Than Compartmentalize

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  To students of economics, it might prove to very interesting subject. Yet to many others economics evokes a phobia, a phobia of those graphs and calculations and theories and assertions often contradicting and often supplementing and what not. Irrespective of the context, there is always the other hand which would forecast very differently. This is something a puzzle to the outsiders or what they might call an economist’s hedge but to economists it is about viewing things in different perspective and the manner in which the outcome would differ following the change in any of the variables. Teaching economics therefore is a challenge in the sense of convincing the students of the validity of the theories without evoking the boredom associated with the ingraining of the theoretical contours.   Economics teaching at many a level especially down the elite grade is all about stereotyping. It is about regurgitation of the text books. Text books themselves would be a compendium of exist
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