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

Trump, Twitter and Rutherford Hayes

The war between President Trump and Jack Dorsey of Twitter seems to be escalating. In response to Trump’s action on social media, Twitter now has hidden Trump’s tweet on Minneapolis violence claiming it encourages violence and goes against the norms of Twitter. The retribution from Trump is only to be expected. In a political universe of US, this seems to open a new chapter. While television channels and newspapers are known to create polarising views against candidates and routinely turn partisan, this is unusual given it is one of the earliest instances on the social media. In fact, social media by claiming itself to be a platform has distinguished itself from the print and broadcast media. This distinction has enabled social media firms escape liability from posting of third party content.

 

Media companies in the West as suggested above find it convenient to become partisan. They go at miles to influence elections using their power of information production, distribution and dissemination. The social media has increasingly playing an important role in the determination of outcomes of elections in many parts of the world. The India right coalesced around Twitter to build a narrative, to mobilize its constituency to turn the tide of 2014 in favour of Narendra Modi. Similarly, the narratives on Twitter played a critical role in mobilizing support for an ‘outsider’ like Trump first in winning the nomination and later the election. In the British context, the social media mobilization by the Indian constituency played a role in boosting the presence of Boris Johnson of late and David Cameron before that. Thus Twitter despite it being ranked below its social media competitors like Facebook or Instagram or even YouTube finds itself very critical and prominent in building and consolidating political and ideological conversations.

 

The conversations that get fostered on Twitter enable it to play a role of arbiter of information dissemination. The information produced is by the thousands of users across the world. In fact, it virtually costs nothing to produce this information. All that is needed is a platform on which this conversation takes place. The byproduct of the conversation thus happened is the information produced that when distributed and disseminated turns into a powerful mechanism of narrative building and policy formation.  

 

Conversations sustain human mankind. From a village square to top level conferences, it is the conversation that makes or mars. What were the personal element in the village town square conversations made way in the technological world as conversations or posts on Facebook or Instagram. The visual element to the same was given in YouTube. The professional discussion and signals in the office world formal or informal, official or demi-official, paved the foundations for Linkedin. The socio-eco-political nature of conversations morphed as public good on Twitter. While these conversations on platforms were essentially public goods with the platforms have the responsibility of allowing free expression, the private nature of conversations too evolved with passage of time. The Whatsapp groups, Telegram channels, private conversations on Whatsapp, Telegram or Signal or for that matter Twitter DM, all point out to emergence of club goods in varying degrees. Similarly video call platforms like Zoom or Skype perform the same objective. While the platforms or technology intermediaries might seek to control the public narrative on these platforms, it is the concerns over control of private nature of conversation either manifesting as private good or club good.

 

Imagine a scenario of Twitter using its monopoly and control over the pipeline intercepts the DM of President Trump to his party colleagues and passes them to the team of Joe Biden. Imagine a scenario of such DMs exchanged between world leaders finds itself to the top echelons of Chinese government. These can give significant boost in intelligence gathering and analysis at the very top. The firms directly involved in the same on the grounds of their personal bias against some leader or the other can shake things radically. They may be tried for treason, espionage etc. but that would be post mortem because the damage would have been done. The charges might not hold strong if the leakages were internal to the country like a strategy of a party being leaked to the other party. One might not need a crude mechanism like Watergate to do the same. The biases or partisanship of these platforms is sufficient. Moreover, the network externalities generated by these platforms make them relatively indispensable. There are already apprehensions of Zoom conversations finding their way into China.

 

While the scenario might appear farfetched and from the realm of fiction, it is not so. In fact one can go back around 150 years to the year 1876 to find a similar occurrence. In the year 1876, telegrams were the key mode of long distance communication. The alternative was the snail mail. Telegraphy in the United States was under the monopoly of Western Union. Common carriage principles as we know it today was deemed inapplicable then. This gave Western Union absolute control on what could pass through its telegraph pipeline and what could not. Western Union had relationship with Associated Press. This meant only the AP reports could be wired through the Union cables onto various newspapers across the length and breadth of the country. No other wire service provider existed. In the elections of 1876, Western Union along with AP and New York Times backed Republican candidate Rutherford Hayes and using their monopoly over information flow ensured he got tremendous publicity. Yet the opponent Sam Tilden held his ground. The election went to the wire so as to speak. The outcome was result pof complex interplays among various actors through the months from the elections. Yet, the role of Western Union cannot be understated in determining the outcome. While the opponent held a lead among the delegates, they did not command the majority of the delegates. There were telegrams being exchanged among the Democrat leadership which indicated a sort of nervousness or uncertainty among the outcome. Western Union intercepted these telegrams and New York Times played a role in conveying these messages to the Republican leadership. Having secured such vital information about their opponents, the Republicans formulated a counter strategy of their Governors in the South disputing the results and even seeking manipulating them.

 

The role of the Western Union was not known for many years but what it conveyed was the sheer crass pursuit of political power can lead to misuse the monopoly over information flow on a platform that is deemed to be public. Such misuse of information flow and analysis is sought to be done by Jack Dorsey today. What Twitter is doing today is not about genuine attempt to flag misinformation being peddled but a deliberate attempt to control the narrative and skew the same against Donald Trump. The attempts to skew the narrative against Trump is again a product of the biases that Jack and team harbour against the President. The company can claim to be a town square or media but not both. Irrespective of the merits of the Twitter stand, such actions will erode the nature of the internet and its freedom than enhancing its status. It stands antagonistic to the Natan Sharansky’s town square test.

 

 

 

 


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