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Showing posts with the label relative evaluation

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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Seth Godin and the Laggard

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  Seth Godin has once again come up with provocative post complete with calculations. The post (available here ) is on laggards. He terms it the opportunity of laggards and suggests the only solution to deal with laggards would be to bring them up rather than bring up the averages. It is normal to find people obsessed with averages. Averages are pulled down by laggards. Eugenics might suggest an extreme step to eliminate laggards. There are many others who advocate laggards being brought up to the standard of the average. The bell curve does exist, yet it’s skewness needs to be smoothened at its lower tail. Increasing the upper bounds will not seemingly solve the problem, the only mechanism as Godin seems to put forth is bringing up the laggards. \ His examples are very interesting. He uses the example of the road, party laden with dirt, the rest a smooth highway. His argument as his calculations suggest is not about building a vehicle that drives faster on the highway but developi
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