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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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Jargon in the Digital Economy-I

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  The world is growing increasingly digital. Some twenty five years ago, the dotcom boom flourished on a premise that buyers would not want to go shopping and instead prefer to be delivered of their needs in the comforts of their home. Not surprisingly, the idea seem to have failed then. Numerous dotcom firms simply collapsed. Hardly one or two survived and it was they who went on to redefine the industry. Today, these ideas hardly look outlandish. There is growing traction among the buyers who want to order online from groceries to vegetables to fruits to toiletries to what not. In the earlier days, many writers and scholars viewed internet as an extension of the distribution medium. To them, the distribution, instead of happening in physical stores would happen in virtual stores. Yet with passage of time, the notions of internet and the accompanying business models have significantly expanded. As the internet based business models morph into something radically new, it would be perti
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