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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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Why the Prostitute Doesn't Earn More Than an Architect?

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Steven Levitt along with Stephen Dubner wrote a book Freakonomics that came out in print in 2005. This was a bestseller and in some ways revolutionized writing books on economics. While there were similar books of the genre before, it was for the first time a book on economics written in popular and layman’s language was published. It was positioned as something that explores the hidden side of economics in everything. In fact Steven Levitt sought to describe himself as rogue economist who ventures into areas where others haven’t. They have come with some more books in the genre. It is not to delve into the merits or otherwise of the book which necessitates separate engagement.   Yet, what would be of interest is the examination of the one of the interesting propositions they have put forth in the book. In their contention, which they expand in the book, in theory, a prostitute will earn more than an architect. This looks outrageous at the first glance but they offer theoretical e
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Cost Benefit Analysis and the Brazilian Rainforests

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Reports all around suggest fires are raging around all over in the Brazilian rainforest. The Amazon rainforests seem to be headed towards deforestation and destruction. Unlike the forest fires of Australia or California or South East Asia, the fires in the Amazon are not due to natural causes but seemingly man made. Apparent encouragement of manmade fires to clear vast swathes of land for cattle grazing to agriculture to possible industrialization is adding to the woes. The global community seems to be overworked especially given the pandemic originating in Wuhan. The government in Brazil is apparently encouraging these fires. Brazil’s President Jair Bolsanaro is perhaps a bete noire to the left liberal chatterati across the world and this has given just another opportunity to go hammer and tongs at him. Woke entails articulation and perhaps practice at least symbolic of environmental protection and towards minimizing pollution. Anything contrary is frowned upon.   It is a differen
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COVID-19 Testing, ICMR and the Way Forward

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Sometime back, the post “ Rationality of Indian Testing Strategy and Chinese Flu ” examined the course of Indian testing strategy and philosophy in reference to diagnosis of the Chinese flu. The synopsis of the post was summarized as ‘Contrary to the demands of the testing mafia, the focus should be on testing large numbers in areas worst affected by the Chinese flu rather than blind and random testing across the country’. The post had concluded that the then strategy of conservative testing was working well given the Chernoff bound and thus little need existed for the change as suggested by certain groups. In a recent post, “ The Impossible Trinity of Chinese Virus ”, it was posited an existence of an impossible trinity. A country cannot have conservative testing, open economy and low reproduction ratio simultaneously. These two posts at some level appear to contradict each other. As with any event, facts emerge necessitating a change in approach. The thought process is dynamic and he
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Wikipedia and Indic Contestations

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There is an interesting post by Dr. Subhash Kak on the medium. The post is titled “ Wikipedia or Trashpedia ”. It is a post or a rant or an exasperation or warning but nevertheless posits few pointers good or bad that cannot be ignored. Its contention is the on the nature and content of Wikipedia when it comes to dealing with non-European or non-Western cultures. Without doubt Wikipedia is the numero uno when it comes to information. It is perhaps the largest repository of information and to boost the same, it is dynamic. Hardly any information repository has come close to Wikipedia in achieving the compiling of information about almost everything under the sun and beyond in such a short period of time. It’s business model so as to speak has been of difference which has brought in numerous books and publications that extoll it to be classic example of what lies ahead in our production, distribution and consumption models. It is deemed as perfect platform for the emergence of what Toffl
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Imagined History of the Left and Sitaram Goel

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There is an interesting and thought provoking post in Dharma Dispatch. The post discusses the agenda of the left and how Sitaram Goel sought to destroy the same. He perhaps could not in his lifetime but certainly with passage of time, the reputation of the left as custodian of Indian history has become discredited. The monopoly which Romila Thapar and her ilk enjoyed for more than four and half decades is on its final legs. The Supreme Court judgment on the Ayodhya Ram Temple issue was the final nail in the coffin of the left historical agenda in creating deracinated India.   Unlike China, India let control of the history be dictated by a cartel controlled by the Europeans. The modern historical scholarship if one might term it so began from Max Muller and his successors. Post-independence they handed their baton to their Indian followers. These followers essentially of the left persuasion began dominating the narrative which was consolidated with suppression of any dissent by Rom
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Jaishankar's Sermons

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There was an India Ideas Summit organized by US India Business Council which saw addresses by the top signatories including PM Modi and EAM Jaishankar.   The theme was ‘Preparing for the Better Future’ and thus the address was expected to revolve around the same. The state of the pandemic originating in Wuhan along with the border tensions with China seemed an appropriate setting for India to woo US and make its shift to the US camp more explicit. As the world confronts a possible long Cold War between US and China, India has very little opportunity to pretend neutrality. As a matter of fact, India will be in the frontline of the conflict and possibly along with Japan or Korea may be facing the first line of attack from China. The recent manoeuvres from China along the Ladakh border are intimidation tactics to warn India of keeping itself away from the US camp.   The Prime Minister talked about India and US being natural partners and invited the US MNCs to invest in India. India is
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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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