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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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Intuitive Qualitative Grasping of Statistic Concepts

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  Statistics invokes certain phobia in many. Numbers create awe and fear. There are apprehensions of faltering with numbers. Moreover, when one works with numbers, they bring together their numerous complexities woven into a single thread of sorts. It is difficult for some layman to comprehend the intricacies of the numbers and their findings. There are so many tests and measures and formulas with very little grasp of what they mean to the common man. To an outsider, it is reflective of perhaps an inferiority complex in referring themselves as unable to comprehend statistics or for that matter on a broader terms, the logic of mathematics. Yet when one views the same in its applied form, they are beautiful. Beauty might lie in the eyes of the beholder. There exists beauty and fear in the same breadth. To many, invocation of numbers might mean to suggest one upmanship over the rest. This might actually yield prisoner’s dilemma.   For instance, there are contexts in economics which mi
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Primer on Statistics -I

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Pervasive phobia of numbers is complicated by the pedagogical approaches bordering on the abstract towards mathematics, statistics and related subjects. Yet, many concepts or the principles underlying the concepts can be understood without resorting to numbers. There are two dimensions in understanding statistics. The first is conceptual understanding or the significance of the test, or and statistical principle. Secondly, it is the operational element- the use of the same in practice. The latter is emphasized through the pedagogy and obviously needs mastery of numeric. Yet, without the former, very little progress can happen in the latter. The conceptual understanding is possible without resorting to any sort of numerical gymnastics by taking refuge in principles navigated consciously or sub consciously in day to day life. It makes sense to construct a tabular model to understand the conceptual applications of various statistical tools. Statistical tool/ test/ measu
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