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Showing posts with the label third degree price discrimination

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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Economics in Real life- Amusement Parks and Touring Exhibitions

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  Many past posts have discussed the applications of economics in real life. The modus operandi in each post has been simple. Take an example from real life and discuss how economics consciously or subconsciously plays a role in the same. The events one observes in life are many and diverse. Each ins unique yet perhaps to a keen student of economics, these manifest in many possibilities of economics lies underlined in their demonstration. The current post too will take this forward and brings few more examples that add lustre to economics in life. Real Life Practice/ phenomenon Economics Linkage Unlimited rides in Amusement Parks In India, amusement parks came in much later and it is only in the last twenty odd years, they have spread to many cities. Any visitor to an amusement park would notice an interesting observation. They charge a fixed entry fee and offer unlimited rides for the visitors. One might wonder the reasons behind th
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The Semantics of Group Based Discrimination

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As one visits Red Fort or Elephanta Caves, there is an interesting anomaly while buying the entrance ticket. Indians and foreign nationals are charged differently for what essentially is the same offer.   In railways or in bus services, senior citizens are offered concessions while buying tickets. They normally pay around half the price than the normal customer. Students too have concessions while purchasing a season ticket or as it is popularly known as monthly pass. In Karnataka there is demand for concessions in monthly passes or daily tickets on city bus routes for women engaged in garment factories. Recently as a poll gimmick, Delhi government made travel free for women in Delhi transport buses. Students belonging to Scheduled Castes/ Scheduled Tribes/ Backward Classes etc. often get free studentship to cover their cost of studies. Last year, the central government introduced reservations in government jobs for candidates belonging to Economically Weaker sections. For many year
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