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Showing posts with the label capitalism

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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Random Musings on Economics

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  Economics deals with behavior of agents as stated many a times in the past posts. The agents might be individuals, groups of individuals, organizations, families, society, castes, classes, institutions, nations, economies and what not. There might be a behavior observed under individual conditions and something under aggregate conditions. There is behavior which might be innocuous or something independent when viewed through the prism of an individual yet the same when aggregated might result in a totally different behavior. The motives might be micro yet the aggregate behavior might result in something of a macro outcome. It might be simple decision to park a car at some place which if followed by others might set a pattern and thus a macro behavior of sort would emerge. If somebody were to venture a question on why the king has no clothes, there might be no answers. As the economists, Thomas Schelling once remarked, he was addressing a session and he found the first eight rows were
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The May Day

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  May Day celebrated on May 1 every year has two different associations. The first one has pagan origins later adopted by the Church and is a traditional spring festival in many parts of Europe. The more famous and better know is about the International Workers Day and celebrated as a holiday in a number of countries. In fact, the May Day was perhaps the most important of the holidays in Communist countries like the erstwhile Soviet Union, Maoist China or even present day North Korea. It represents the worker’s efforts in seeking to improve the conditions for workers. Its origin goes back to 1889 when the Second International decided to adopt the same. In fact, the US adopted the Labour Day to be celebrated on the second Monday of September and predated the Second International’s adoption by a few years. In fact by 1894, it had become an official holiday in the United States.   Aside of United States, the celebrations were reserved for the first day of May. The seventeenth century
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