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Showing posts with the label notional loss

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

Presumptive Loss and Price Discrimination

  The Delhi High Court is hearing the appeals of the Union of India against the acquittal of all the accused in the notorious 2G scam case. Among those in the dock are DMK leaders like Kanimozhi and A. Raja the then Union Minister. The hearings on these appeals are likely to get over by early November with the judgment likely to be out by the end of this year. The political ramifications of the judgment would no doubt be felt. Given the approaching elections to the legislative assembly in Tamil Nadu, the opposition DMK would sitting on razor’s edge awaiting the judgment. In some ways, if the accused are convicted, this could have certain implications for the succession planning within the DMK. DMK might be in an advantageous position going into the elections, but an adverse judgment might derail its plans. Incidentally in some quarters, the current hearings are being viewed in the context of the hard bargaining that might be going on between the DMK leadership and the ruling BJP at the