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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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Indian Vaccination: What Next?

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  The second wave of the Chinese virus seem to be abating. India has recorded a daily positivity rate of under five percent over the last two weeks. The World Health Organization (WHO) points to this rate as the minimum eligibility for the economy to be unlocked. The unlocking process has begun in varying degrees. In the lockdown of 2020, the posts had repeatedly suggested of adopting a calibrated unlocking district by district based on the positivity rate. The idea had generally found low receptivity. There were arguments that the economy cannot function in an isolated environment and it had to be either opened fully or locked fully. Yet those same people who were so vociferously opposing it last year are now in the forefront of welcoming especially the strategy being adopted in Uttar Pradesh. Conceding the Rusi Karanjia theory of consistency being the virtue of donkeys, it might be seen as vindication of those critics of district wise unlocking are now slowly moving away from being d
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Political Factional Fights

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  Over the last month or so while the cases of the Chinese virus show small signs of abatement, factionalism has reared its head across political parties across the states. The Congress is facing challenges to its Chief Ministers in Punjab and Rajasthan. In Punjab, there are multiple factions that are clamoring for replacement for existing Chief Minster Capt. Amrinder Singh. In Rajasthan, Sachin Pilot group is queering the pitch for the Chief Minister Ashok Gehlot. Meanwhile Gehlot is demonstrating counter show of strength. There are reports of factional fighting in Jharkhand and Karnataka. BJP too is not immune from these fights. From Bengal where they are facing murmurs of dissent partly due to state pressure, they are experiencing factional troubles in different states. They replaced Chief Minister in Uttarakhand, there were reports of fights in Uttar Pradesh. Karnataka is no stranger to factional fights in the BJP and currently witnessing one more round of such infighting.   Th
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The Rationality of Medieval Punishment Practices

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  It has been stated many times that economics is about behavior. Demand and supply are mere manifestations. Economics is concerned with how people take decisions under various circumstances. There is a positing about rationality in decision making. Economics assumes agents are rational when they make decisions. Implied is the agents are well aware of the cost benefit analysis when they exercise those choices. While the exercise of choices might seem irrational or weird to the observers, yet to the agents, there exists a certain calculations that would have gone into their choice. The behavioral economics contests this proposition, yet it is more about decisions under cognitive constraints or informational constraints. It is about boundaries to the rationality in terms of decision making. Therefore, behavioral economics talks about bounded rationality. Yet within these boundaries, there does exist a cost benefit analysis towards execution of preferences. Not evaluating every possible c
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US Interventions in Foreign Countries

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  Russia has been accused of interfering with the US elections and engineering cyber-attacks on the US systems. This was pronounced in terms of alleged Russian interference to turn the mandate in favor of Donald Trump in 2016. There were constant accusations within the US, within its intelligence community, its administration, security apparatus, the Congress about the extent of Russian role and the internal saboteurs who seemed to have helped Russia for their own ends. The US has been obsessed with Soviet Union and later Russia since the Second World War. Its relationship with China was primarily a function of containing the Soviet Union after their famous split of 1968. In their pursuit to contain the Russian influence, they turned a blind eye to Chinese expansionism. In the current geopolitical terrain, Russia is fast emerging as a Chinese vassal rather than an independent superpower it once used to boast of. Yet rather than seeking to co-opt Russia in the larger battles against Chi
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Intuitive Qualitative Grasping of Statistic Concepts

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  Statistics invokes certain phobia in many. Numbers create awe and fear. There are apprehensions of faltering with numbers. Moreover, when one works with numbers, they bring together their numerous complexities woven into a single thread of sorts. It is difficult for some layman to comprehend the intricacies of the numbers and their findings. There are so many tests and measures and formulas with very little grasp of what they mean to the common man. To an outsider, it is reflective of perhaps an inferiority complex in referring themselves as unable to comprehend statistics or for that matter on a broader terms, the logic of mathematics. Yet when one views the same in its applied form, they are beautiful. Beauty might lie in the eyes of the beholder. There exists beauty and fear in the same breadth. To many, invocation of numbers might mean to suggest one upmanship over the rest. This might actually yield prisoner’s dilemma.   For instance, there are contexts in economics which mi
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Indian Judiciary and Pending Cases

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  A recent tweet by LawBeat puts out an interesting perspective on the cases before the judiciary. It quotes the Law Minister Ravi Shankar Prasad as stating there were nearly 67000 cases pending before the Supreme Court. If one were to take the cases pending before the High Courts, there would be 58 lakh pending cases. Given there are 25 High Courts in the country, an average of more than two lakh cases are pending before each High Court. If one were to dig deeper and look at the lower courts- primarily the District Courts- the number touches around 3.3 crores. The number is expected to increase with passage of time rather than decrease. This virtually implies there is very little time for each court to sit and adjudicate on the cases and perhaps even lesser time to write judgment on those cases. Assuming Supreme Court to sit around 200 days per year, they have to handle 300+ cases per day of their sitting to dispose of the current pending cases and on an assumption of accepting no fr
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Compulsory Vaccination and Self Interest

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  Now that there is some certainty in the vaccine policy announced by the government of India, it remains to be seen how the process would be carried out going forward. The government has set itself an ambitious target of vaccinating every eligible adult in India by the end of this year. The target seems quite unrealistic especially going by the current pace of the process. The pace was picking up in April before the government decided to engage in some competitive politicking which led to the chaos and unavailability of the vaccines. Moreover, the hesitancy on the part of the government to order vaccines beforehand too played a role in vaccine shortages. The government had clearly found itself on a wrong foot when the second wave stuck. The demand for vaccines multiplied manifold but there were no vaccines. There was perhaps no homework on the part of the government to cater to such eventuality. There still exists a denial over the prospective third wave. Any derailment of vaccine pro
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