Posts

Showing posts with the label customer selection

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

Tests of Statistical Similarity, Behaviour and Aftereffects

Quantification and objectification of compatibility is perhaps a defining feature in navigating the Industry 4.0.   In choice of vendors, franchisees, licensees, franchisors, licensors, customers etc. a key to long last partnership lies often in the compatibility of characteristics between them. Customer and producer journeys in multi sided platform markets evolve out of compatibility development among the various partners. Therefore the platform objective would to sync these mutually similar compatible attributes between the players on the platform. Often a solution to swifter payback period entails following a time tested model of franchising or licensing. In identifying the right vendor, client or partner, a firm often would turn a basic meeting ground of quantitative parameters like financial credibility of the target partner, experience in the relevant field etc. with suitable weightages. In addition, there is a judgmental call based on perhps on gut or qualitative feel whe