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Showing posts with the label path dependency

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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Path Dependency and Inequities of History

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There is an interesting podcast on Freakonomics about the inequality and compensating inequality. The link for the podcast can be found here . It is a two part podcast, the second of which is being awaited. But given the trajectory and the points of view expressed in the first of the series, some points could be discerned and can be discussed at some length in this post.   There is no doubt about the deeply embedded racial and class inequality that persists not just in the US but also across Europe, Australia and Canada among other countries. These inequalities have not arisen out of recent events but are deeply interlinked to the historical trajectories. In Australia, the inequalities are linked to the White treatment of the Aborigines while in New Zealand, the Maoris have suffered historical injustices. The White Man’s Burden might have been formulated by Kipling but was in practice for decades before. In fact Karl Marx advocated his own version of White Man’s Burden when he soug
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