Decision Making as Output and Bounded Rationality

  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

Calendronomics


It would be stimulating to decrypt how January 1st became the first day of the New Year across the world. There are perhaps more than 500 calendars across various cultures. Yet it was the Gregorian calendar that has emerged as the standard calendar across the world. While the roots of Gregorian calendar is religious, its adoption is pure geo-political economics.

The calendar was issued as a correction to the then existing Julian calendar in Europe. The reform was an answer to solving the ‘Easter’ problem. Easter, as adopted by First Council of Nicea (325 AD) is celebrated on the Sunday after the ecclesiastical full moon on or after 21 March, which was adopted as approximation to the March equinox. The passage of time and the semantics of Julian calendar had led to divergence between the canonical date of equinox and the observed reality. Hence by early 16th century, there were calls for reforms in calendar accompanied by ensuring that dates do not diverge in the future. This was the age of astronomy and Renaissance and ensued fertile conditions for adoption of new calendar. Pope Gregory issued the decree on Oct 4, 1582 and the correction meant skipping of 11 days. Oct 15 was the next day after Oct 4.  

The origin of the calendar thus lay in religion and was backed astronomy too. Papal decrees however, applied to Catholic countries only. The diffusion of calendar to non-Catholic countries and the default civil calendar of the world lay in the principles of politics and economics that perhaps were undiscovered and undocumented.

People move across countries and continents. Assume each country, region, culture, community have their own calendars. The question is how to keep track of the date and time as we move across each of these zones. It would be very difficult. Centuries ago, when travel was very limited, it did not pose much difficulty. Yet as (wo)men begin to travel for host of purposes from trade to conquest to adventure, need for uniform standardised calendar and time began to be felt. There were two ways of movement towards the same. One was creation of global time and calendar. In case of time zones, after prolonged negotiations, this method was adopted. The second is natural movement towards adoption of calendar as standardized one. This approach is known as network effects. The more and more people begin using a product or standard, it becomes more and more valuable. Since many are using the single standard, the laggards or non-adopters would feel isolated and would have to come around to adopt the existing standard. This is what happened with Gregorian calendar.

The world was Euro centric and European conquests of newly discovered America was underway. The movement into Asia and Africa had begun. Therefore, anything European was likely to have far reaching impact. Gregorian calendar was adopted by Catholic countries since it was Papal decree. It was resisted by Protestant countries who continued with their own calendar systems.

King Philip II, the Catholic ruler of Spain decreed the adoption of Gregorian calendar in 1582. Given his zenith of power in Europe in addition to overseas colonies in America, it influenced the switch to many regions/territories. France followed suit. Portugal and most of Italy were part of Spanish kingdom. These empires would impose their version of calendar on their colonies. Protestant countries too slowly fell in line. The British Empire adopted the calendar in 1752. This was catalyst to this emerging as global calendar given the reach of British colonial possessions. US when it became independent in 1776, continued with Gregorian calendar adopted in 1752.

Few countries resisted, yet the spread of globalisation in the 19th century, hastened the adoption. Independent Asian countries like Japan, Korea, and China began to adopt by 1800s and early 1900s though they did co-exist with local calendars. This was something India did too post-Independence. Russia followed the adoption with the revolution though they continue to celebrate Christmas according to their traditional calendar. Islamic countries continue to follow their traditional calendar yet adopt Gregorian calendar as civilian calendar. Countries like Nepal etc which do not officially follow Gregorian model, still use it for civilian purposes.

So European colonialism created the network effects for adoption of global calendar. It is not about value judgment on merits or otherwise of the same but broad historical perspective to its adoption. While this is the official calendar, almost all cultures follow their own ethnic calendars to mark events of cultural and religious significance. As noted above, countries like India, Japan etc have their own national calendars co-existing with Gregorian one. These calendars are sort of hybrid between ethnic and Christian calendars. Countries like Nepal, Saudi Arabia etc while continuing to follow their traditional calendar for official purposes use the Christian calendar for civilian purposes.  Rarely is a culture/ community which marks its own events of ritualistic significance through Gregorian calendar.

Is there a scope for new calendar, adopted globally? While there is and there are attempts towards that, there is hardly a pressing need for the same. The calendar calls for reform if there is significant disruption on scientific grounds. Yet there is hardly a strong ground on this count that justifies such a change. One does not create a solution for non-existent or non-pressing problem. Hence there is very little reason (high marginal cost/ very low marginal benefits) at this stage towards a unified global calendar away from Gregorian one which has its roots in network effects brought by colonial project.


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