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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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Academic Research and Policy Interventions

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  At least in terms of perception, there seems to be disconnect between public policy and academic research. Research is something sound, yet it has little application more often than not in terms of policy prescriptions. What might work as good policy measure might actually turn out to be bad research from a methodological point of view. There are occasion when there is some interesting research findings have emerged, yet when implemented in policy have turned out to be very bad choices. There is an interesting discussion on the same on Freakonomics . The talk highlights the gap between the research objectives and the policy instruments and objectives.   Research, in academic parlance is all about methodology. The journals would go at length to enquire on the methodological approaches. Their interest in findings are an outcome of methodology adopted rather than the outcomes themselves. The absence of rigor in research is a disqualification. For instance, if a firm has experienced
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