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Showing posts with the label customer lock-in

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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Real Life Economics: Big Tech and Network Effects

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  In a few recent posts the increasing power of Big Tech and the possible consequences of the same were discussed. There is an increasing tendency of over reach by the Big Tech and thus has potential impact on the socio-economic-politic equilibrium of the society or the country. Their over reach was manifested in the US elections of late and has been in some ways manifesting itself in the Indian context too.   It would not erroneous to assume Big Tech is growing too big for their shoes and the states need to curb them. The roots of this power perhaps can be traced to early 2000s when Bill Clinton administration compromised with Microsoft in the anti-trust suits thus ensuring Microsoft was not split. Given the more than generous help given by the Big Tech in their campaign, President Biden is unlikely to go hard on them. In fact, this might embolden them to scale in their experiments in different countries. However a question at this stage would be what gives them the power to dictate t
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Debating GM Food

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Genetic engineering is the process of manipulation of genes in an organism or transplanting genes of one organism to another to create robust effects. Applications are multipurpose from medicine to food to agriculture to host of other unexplored domains. There is significant increase in genetically modified (GM) crops that are resistant to pests. It is feasibly a expedient technique than spraying pesticides and possibly long last effects. There are promises of increasing yield per acre, some evidence of which has been perceived in cotton etc. The agriculture industry across the world is ominously subject to rainfall and irrigation. Given the accumulative scarcity of usable water, it is germane to explore less water intensive methods of growing crops. GM embedded crops are understood as an essential tool towards developing drought resistant /snow resistant/ flood resistant crops etc. If GM agriculture is given a free license, endless possibilities ostensibly will open up. Yet, any di
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