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

Some Thoughts on the US Presidential Elections 2020

 

The US presidential election is just over a month away. The early voting has started. There are already accusations of fraud in mail-in voting. While Democrats want to exercise mail-in voting, the Republicans are not. The latter smell some dirty fish in the exercise of postal ballots. Not too long ago there was talk of US Post deliberately delaying delivery of postal ballots so as to not reach on time to the counting centres. There is no doubt, legal battles are shaping up over the postal ballot and their validity. With the conservatives having upper hand in the Supreme Court, it seems they might enjoy some advantage. If Judge Amy Coney Barrett is confirmed before the elections, it might lead to a 6-3 advantage for the conservatives in the Supreme Court.

 

Nightmarish scenarios are being worked for both Democrats and Republicans. Widespread reports suggest better than expected performance from Joe Biden in the first Presidential candidate debate. Yet, the reaction of Democrats sympathizers calling it one of the worst debates in history suggest all did not go well for them. Emergent reports suggest both the candidates catered to their constituencies. There perhaps was little attempt to woo the floating voter. Trump seemed to have vociferous in defence of the whites, his traditional vote base. His refusal to condemn white supremacy might go do well with them. He is banking on this silent white voter who catapulted him to power four years ago defying poll predictions. Trump might be banking on a similar performance wherein though he falls behind in popular vote a la 2016, he wins the Electoral College. This might not be a fanciful idea but very realistic.

 

The first possibility is of understand the silent white voter. The presence of racism without doubt presents challenges to the American society. Yet Antifa, BLM etc. rather than work towards ending racism are leeching on to the same to achieve their objectives of creating an anarchy and usurping power. They feel that equivalents of the Arab Spring or the Prague spring might come true in the United States. The Democrats have latched onto the same something contrary to their stands in their earlier years. As with many other left-liberal political forces across the world, Democrats are increasingly adopting the fringe as the mainstream. Labour in Britain and Congress in India have paid heavily for adopting this strategy, yet, it would be premature to predict the directions US would take. In the Democrat pursuit of the fringe of Antifa among others, there is an inherent danger of losing to the right.

 

The shrillness of the Antifa and its cousin across the world make it necessary to be politically correct in the public discourse. Yet, in private lives, the people’s preferences are often at variance. In economics, as stated many times before, it is the gap between the stated preference (expressed in public discourse) and the revealed preference (expressed through one’s actions) is what needs to be observed. There is a sharp chance that many whites support the supremacist attitude of the white. Even if they do not, they are not apologetic about being white. At the very least they are concerned about the turn of the events and possible gains by Antifa and its impact on them. Yet, to them it would virtually suicidal to express their preferences in public given the nature of discourse US has shaped up in the recent years. Therefore, there is a high degree of possibility of them hiding their preferences towards Trump owing to the manifestation of social desirability bias. If this silent voter comes out in large numbers, it might prove to be an advantage Trump.

 

US elections are not fought on national popular vote but through the state popular vote and the Electoral College. The candidate has to win the Electoral College and not necessarily the popular vote. In states whether you win 100% vote or you lead by one vote over your rival doesn’t matter. Even if the lead is just one vote, all the votes in the college would go the leading candidate. Therefore, certain groups which might have small presence can be of tremendous value. This perhaps explains Trump wooing the Indian American community. Whether it was Howdy Modi or Namaste Trump, the events at least in the implicit sense had the message to the Indian voter that Trump is better for India. If the Indian voters who traditionally have voted Democrat shift in sizeable numbers to Trump, he might take a few critical states. This also explains some Democrat overtures to Indians and going further perhaps the nomination of Kamala Harris as their Vice Presidential nominee. It is a different matter that Kamala has been traditionally anti India in her stance in recent times.

 

The same modus operandi works for Jews too. Trump’s attempts to normalize relations between the Arab World and Israel with great success is likely to see a accretion in Jewish voters to the Republicans though they have traditionally voted Republican. Secretary of State Pompeo seeking to meet Pope was seen as an attempt to woo the Catholic vote. Biden is a Catholic and if elected would only be the second (JF Kennedy was the first) to be elected to the high office. Yet, Trump’s overtures to Catholics might be crucial. Catholic vote might not translate in full to Biden. They are likely to adopt a conservative stance. It is in this context, the defence of white supremacy at least implicit was visible in Presidential debate. Trump might have had not so flattering words for India on handling Chinese virus but perhaps it was domestic compulsions to defend his own less than glorious record of handling the pandemic.

 

The first debate merely saw the two candidates catering to their constituencies.  It would be moot to watch their moves as they seek to infiltrate their rival’s vote bank. The newspapers and television channels are projecting a Biden lead yet there is a palpable sense of nervousness. There is an increasing talk on the verdict being decided by the Supreme Court something like in 2000 or perhaps worse like 1876. The American media much like its counterparts in the rest of the world aspires to be politically correct and seeks refuge in left liberal values. Therefore, there is palpable sense of denial of the US voter preferences. The preferences are undergoing a change and it might not be unusual to see the whites polarising against blacks and vice versa. This might certainly not be good news for America but perhaps sweet for Trump. New York Times got it completely wrong in 2016 and mainly because of their refusal to see the ground realities. One might not be pleased with the ground realities, there is lot of things that seem to be concerning about but nevertheless cannot be ignored. This might be the thing that might repeated in this election cycle also. One waits with bated breath the outcome of the elections in the world’s most powerful democracy.

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