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Showing posts with the label coronavirus

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

Jim O'Neill, Coronavirus and Indian Response

A report in CNBC quotes Chatham House Chair Jim O’Neill praising China for its response to coronavirus. In a disparaging way, he derides Indian approach expressing fears what would have happened had it originated in India. The report is available here .   It is not something new for many Westerners. Their Indophobia or more precisely Hinduphobia makes them inhabit their deluded land of India being haven for snake-charmers and elephants.   They are simply unable to come to terms of India emerging on its own and being power contender. To all the praise Jim O’Neill heaps on China it was China’s initial reaction of denial and secrecy that led to the scaling up of the current round of the epidemic. He seeks to explain the same as dichotomy between the dominance of President Xi and the officials at the state level. The explanation simply doesn’t hold well in the light of what has emerged. The virus was noticed first by doctors in Wuhan. The first Chinese reaction was denial. In fa

China, Rationality and Pandemic Uncertainty

The emergence of coronavirus in Chinese region of Wuhan and subsequent spread elsewhere in China and abroad is sending shockwaves. The governmental response is a shutdown of cities and provinces home to millions. It could not have come at a worse time given the holidays for Chinese lunar New Year. People would be travelling back home, to their ancestral places, to be with their friends etc. The virus has put paid to the plans and tourism industry is at a standstill. Worse, the panic seems to be gripping large scale population and upheavals not ruled out. Historically Chinese Communist Party has been secretive about the incidence and spread of virus and this adds to the rumours all around. Most accounts suggest, underreporting on casualties from the Chinese authorities, some even suggesting underreporting by factor 8-10. Setting aside the exaggerations, it can be safely assumed the reporting would be around 40-50% of the total cases in the best case scenario. Given the global travel