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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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BJP and Conquering New Territories: Some Notes

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  A 2013 post “ Deciphering the Strategic Logic of Electoral Alliances ” discussed in substance the theoretical underpinnings of a political party choosing to go for in for electoral alliances for short term gains. There are push factors and pull factors that come into play. These were sought to be analysed through the prism of management theories how needs of both the national party eager into an alliance and the regional political force which too would be equally keen to enter into an alliance. To a political party making a headway in a state is always going to be difficult. It would be easier to make the first wave of gaining let us say around 10-15% of the vote in a wave election or so but would rather be long climb with returns operating at a decreasing scale till it hits around 35-40% wherein the party is in a position to have a strike at the government formation. These long years which yield sub optimal returns are difficult to keep the party workers motivated. Similarly to regi
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Mahabharata and Lessons for Foreign Policy

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  Indian scholarship in realpolitik, foreign policy, strategic affairs, defence, among other disciplines has traditionally found itself rooted through the prism of Western thoughts and scholars than indegenious models. Indian scholars might bandy about Machiavelli but would shy from Chanakya, might draw thoughts from the Bible but would hesitate to quote from Mahabharata or its central piece the Gita, would discuss Hobbes or Rosseau but remain clueless whether any Indian thought leaders have similar thought processes. The answers can be varied. Most Indian scholarship or treatises of leadership, politics, society etc. remained lost and undiscovered till recent times. A manuscript of Chanakya’s Arthasastra was discovered in Mysore only 1905 or so. It was only after that there was an interest in Chanakya and his thoughts. Therefore Chanakya was equated or compared to Machiavelli rather than the other way round. It is different matter Machiavelli was evil and built a theory that supported
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Deciphering Left Liberal Global Hegemony

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  The recent events especially post the election of 2019 are beginning to sound as nail in the coffin of the left liberal ecosystem. The system that dominated for close to seven decades since Independence is slowly getting dismantled. The abolition of Article 370 followed by the Supreme Court judgment on Ayodhya which was subsequently followed by PM Modi laying the foundation stone of the Ram Temple have each in many ways signal a break from the Deracinate India project orchestrated by the left over these years.   The left project originates in its own version of White Man’s Burden. It was in 1852 or so when Karl Marx put forth his views on the British rule in India. He believed that Indians were in a primitive world and who worshipped a ‘monkey god’ a derogatory reference to Lord Hanuman. Marx argued that the British had a historical duty of civilizing the Indians and bringing them into the zone of scientific thinking. Marxian scientific thinking rested on a paradigm of what Marx
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Mynsky Moment?

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  President Trump has been tweeting of length about the exuberance being manifested in the markets across the United States. It is hardly surprising that he chooses to claim credit for the same. The rise in indices in US markets both NYSE Dow Jones and NASDAQ are interesting pointers despite the Chinese virus induced pandemic still raging in the country while on the other hand there seems to be no respite from civil unrest unleashed by organizations like Antifa or BLM. The divisions in US society are too deep to be bridged at this moment. The elections seem to create more divide. The after effects of the elections are yet to be known and remain untested. There are of course encouraging reports on the progress of the vaccine but given the trial cycle and regulatory approvals, it may be some more time before the vaccine is available for mass public use.   At times, the current set up reminds one of Charles Dickens’ quote in Tale of Two Cities. It perhaps at some level represents the
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Jargon in the Digital Economy-I

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  The world is growing increasingly digital. Some twenty five years ago, the dotcom boom flourished on a premise that buyers would not want to go shopping and instead prefer to be delivered of their needs in the comforts of their home. Not surprisingly, the idea seem to have failed then. Numerous dotcom firms simply collapsed. Hardly one or two survived and it was they who went on to redefine the industry. Today, these ideas hardly look outlandish. There is growing traction among the buyers who want to order online from groceries to vegetables to fruits to toiletries to what not. In the earlier days, many writers and scholars viewed internet as an extension of the distribution medium. To them, the distribution, instead of happening in physical stores would happen in virtual stores. Yet with passage of time, the notions of internet and the accompanying business models have significantly expanded. As the internet based business models morph into something radically new, it would be perti
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Notes on Economics- Shifts and Movements

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  There have been recent posts that have discussed certain dimensions of economics. Economics as we have noticed in the past posts is more about behaviour that anything else. It is about responses of economic agents manifest to various stimuli. These responses do not follow a necessary pattern but certain patterns can be deduced. At the core of economic thinking lies a construction of a relationship between buyer and seller. This construction was discussed at some length in an earlier post. These relationships are essentially an interaction between the terms of exchange of a good and the ability and willingness on the buyer and the seller to exchange the goods.   There must be a decision in the first place to produce a good. This implies the following questions need to be answered. Firstly, what has to be produced? Secondly, how to produce the same? Thirdly, it needs to factor in for whom to produce. Having grappled with these questions, there must exist a willingness and desire on
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Indian Economic Growth 2020-21: Some Thoughts

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  The GDP data of the first quarter 2020-21 is out. India has experienced YOY decline of 23.4% in the Q1. It is hardly surprising. The period of the first quarter of the pandemic year 2020-21. It was a period where there was a lockdown through the country for most part of the period. In fact, the lockdown began to be eased only in the middle of May which of course triggered the migration back home of the thousands of migrant workers from Maharashtra, Gujarat etc. Therefore, even though the economy began taking baby steps once again, the paucity of labour added to the shortage. Hence there was a widespread expectation of rapid collapse in the economic growth rate. Therefore, prima facie, the quarter was an outlier. In fact, the quarter has seen decline in economic growth across the world. The US recorded a YOY decline of 30%+ while Singapore recorded a decline in excess of 40%.   There is no surprise anywhere about the direction of the global economy. As the world reels from the pan
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