the most important concept that is constantly hammered into our heads in eco classes is "imperfect information". that is y all theories of 'perfect markets' crumble, aberrations happen in the market/economy and people lose/win in the free market. so wat is this actually? its actually truly simple and hence forms the basis of so many concepts....
well the point is that everybody wud like to sustain their profits and avoid losses ...so what do they do? they take decisions which wud take them to their goal....which is making money or creating value as only the latter can bring them profits...now for a decision to be profit making it shud be an informed decision, the basic prerequisite for which is "information"..
so far so good, but now the catch comes...how do we get this information?...the two parties have opposing interests so they will never share it; so u try to gather as much knowledge as u can and take ur decisions based on the imperfect knowledge u have.
such a simple concept; whats the big deal??...after all this is what we do everyday...we take simple to complex decisions based on our future expectations.....and y such a fuss and bother of making it one of the most important concepts in economics and the business world??...this is because though simple, it determines our expectations of the future and hence our present actions...
wat does a b school do? it is supposed to teach me the art of taking informed decisions based on imperfect information available. but can it really be "taught"? its not something wich has 5 alternatives ; u learn all 5 and then u have to keep matching those 5 to the problem situation...its something wich is intuitive and done almost unconciously.....smthg wich is inborn and not to be taught....which is y a school drop out built such a big empire and his sons could not sustain it even after studying at Wharton and Stanford....
does this mean that i m wasting my dad's hard earned retirement money?....maybe yes; maybe no....i dont know....sometimes i really wonder y i m doing this and what value i m able to add to myself...i think of all the answers to "Y MBA" and all of them sound ridiculous....but then who knows, maybe i ll improve somewhere...my personal life is full of "informed decisions" wich seem really dumb in hindsight....maybe now i ll do that better and at least there will be some value addition on the personal front , if not on the career front....maybe we ll be able to take a decision on going to office on saturdays....maybe..maybe...after all its all about imperfect information.
Cheers !!!!
well the point is that everybody wud like to sustain their profits and avoid losses ...so what do they do? they take decisions which wud take them to their goal....which is making money or creating value as only the latter can bring them profits...now for a decision to be profit making it shud be an informed decision, the basic prerequisite for which is "information"..
so far so good, but now the catch comes...how do we get this information?...the two parties have opposing interests so they will never share it; so u try to gather as much knowledge as u can and take ur decisions based on the imperfect knowledge u have.
such a simple concept; whats the big deal??...after all this is what we do everyday...we take simple to complex decisions based on our future expectations.....and y such a fuss and bother of making it one of the most important concepts in economics and the business world??...this is because though simple, it determines our expectations of the future and hence our present actions...
wat does a b school do? it is supposed to teach me the art of taking informed decisions based on imperfect information available. but can it really be "taught"? its not something wich has 5 alternatives ; u learn all 5 and then u have to keep matching those 5 to the problem situation...its something wich is intuitive and done almost unconciously.....smthg wich is inborn and not to be taught....which is y a school drop out built such a big empire and his sons could not sustain it even after studying at Wharton and Stanford....
does this mean that i m wasting my dad's hard earned retirement money?....maybe yes; maybe no....i dont know....sometimes i really wonder y i m doing this and what value i m able to add to myself...i think of all the answers to "Y MBA" and all of them sound ridiculous....but then who knows, maybe i ll improve somewhere...my personal life is full of "informed decisions" wich seem really dumb in hindsight....maybe now i ll do that better and at least there will be some value addition on the personal front , if not on the career front....maybe we ll be able to take a decision on going to office on saturdays....maybe..maybe...after all its all about imperfect information.
Cheers !!!!
1 comment:
good topic !
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