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Showing posts with the label diminishing returns

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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The Diminishing Returns of Woke

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Roger Scruton who passed away recently had a reputation for being eternally politically incorrect. Individual preferences are an outcome of several factors. In theory, the right of free speech mandates the protection of these preferences unless it encroaches through a process of physical or mental harm the exercise of preferences of another individual.   In the context, individual could mean group too, an aggregate of all individual preferences in that group. Yet private preferences when expressed in public often create a storm because ostensibly they are not deemed to be views of educated, polished, cultural, literate person. To exhibit one’s literacy, polishness, education etc. individuals are expected to rise above narrow strata of thought, parade their cognizance of the injustices apparent or real across the world around them and must be seen to stand for the alleged victims of these professed injustices being meted out. This is something has come to be termed in popular circles
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Big Data and Diminishing Returns

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In many industries has become the buzzword. Scarcely a discussion seems to happen without touching upon the perceived advantages of big data. Firms seem to outcompeting with each other in collecting reams of data. The question however is the effectiveness of this data. The firm’s outcomes are determined primarily by the utilization of big data rather than collection of data per se. Ferreting out big data is a challenging task. Although the big data presents a data set that shows 10X or 100X in relation to existing mechanisms, it does not necessarily convey 10X or 100X worth of increase in insight. While the implication of big data is that quantity is paramount, the returns generated do not match the quantity of data generated. Big data too is subject to diminishing returns. Experts point out, it is not per se the data that should be big, but the primary factor that counts is the diversity of data. Even if datasets may be small, the amount of richness they provide when the
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