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

India's COVID Waves

 

India’s second wave of the pandemic induced by the Chinese virus seems to continue unabated. The experts are forecasting a peak in a day or two. There are some positive signs however feeble they might be about the plateau of cases in a few states. Yet, the devastation seems to ravage. It would nice in statistics to talk about peak and plateau and flattening of the curve. It would be impersonal in statistics to discuss these terms. Yet to those who are suffering from the pandemic and those who have lost their lives and those who have lost their loved ones, it is a different thing altogether. The wreckage it has created besides the impact on the people’s psyche might take years before some normalcy might return. There is in all likelihood an increase in the cases impacting mental health which might not be easy to tackle around. There seems to be around a corner a mental health crisis across the country and perhaps globally. India has been facing the worse in the last month or so especially given the population size and density. The first wave was slow to hit curbed largely by the lockdown and thus enough time existed for infrastructure to build up. The second wave did not offer such luxuries. The states hesitated for a lockdown given the economic costs. Yet the human costs in terms of lives lost to the pandemic seems to be very high.

 

The crux remains there is no algorithm to forecast a correlation between the infection and the likelihood of its severity. Most of the educated guesses if one might call it point to few high risk groups but very little beyond it. In fact, no conclusive studies exist on the degree of severity in correlation with viral exposure. There is no study conclusive enough to point out linkages between viral load at the time of testing and the progress of the disease. While there are studies which point towards higher mortality rate among the older population, the current wave is pointing towards a high mortality even among the younger groups. Nearly a fourth of deaths every day are of those who are below fifty. In this context, the universal vaccination is almost sine qua non. Yet there are little signs of India progressing towards the same. The government seems to be content with vaccinating a small percentage of people whom it considers vulnerable based on what was projected last year rather than building its priorities based on present. One would have to look at the opportunity cost of these decisions especially in terms of human lives lost which could have been saved by vaccination that was timely and effective.

 

India might be aspiring to be a superpower yet when one examines the true state of affairs, it does not seem anywhere near it. The health care system has found itself exposed over the last month or so and this itself was sufficient for homilies being branded on how India remains a vestige of third world country rather than an emerging power. While China seems to have built large hospitals equipped to handle thousands of patients within days, India has been struggling to increase the bed capacity by even a fraction. A large number of lives lost have been due to the inadequacies of the healthcare system rather than the disease itself. The comparison between India and China definitely takes into account the low reliability and credibility of data in China. While China has been testing cities in a matter of days something even Australia has been doing, India is struggling for testing even a few lakhs in the whole of country. Rather than adopt quick-fire rapid antigen tests, India has been pushing for RT-PCR tests which offering higher credibility are notoriously slow. In these times, speed is important. Last time, the swift action of the lockdown did save numerous lives. The current round has been marred more by inaction and lethargy and perhaps obstinacy in following one method rather than flexibility and agility to the changing environment.

 

 

There is some evidence that states like Maharashtra, Madhya Pradesh, Gujarat, etc. have peaked or at least plateaued. Uttar Pradesh and Delhi too seems to have plateaued even though there is volatility and Delhi does register a very high positive rate. Karnataka does not seem to show any signs of respite and seemingly the apparatus seems to have collapsed. The same might hold well with Kerala and Goa with the latter reporting positivity rates in excess of 50%. Tamil Nadu and Andhra Pradesh both have controlled fairly well despite the former having a near lame duck government in the long drawn post-election pre-counting period. The states in the North East especially Tripura and Assam are holding out well with the former being the leader in terms of vaccination. Despite high vaccination per million, the small Union Territories of Andaman and Nicobar Islands, Lakshadweep and Ladakh (small in terms of population) seem to register high cases. The experts are of the opinion while the peak might be in a day or two at the national level, it might differ across states. There is a possibility that some states might register a peak perhaps later this month. There seems to be an opinion among the experts that the pandemic might subside by June and the trough achieved in February might be attained by the first week of July.

 

Meanwhile there is already talk of a third wave. The principal scientific adviser to the government himself has admitted the possibility as have a few Chief Ministers of states. This is adding to the panic. While there is a need for reassurance, empathy, calming down the panic, these announcements though well meaning can have unintended consequences. The current round of handling does not seem to inspire confidence in the people over the third wave. Unless some drastic rehaul happens and the vaccination process gains significant momentum, there is little likelihood of India combating the third wave with minimal damage. If India has to be the superpower it aspires to be, it needs to get its act together immediately. Else the damage would be long lasting leaving scars for a long time.

 

 

 

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