SIMPLE ECONOMICS IN BUSINESS LINE - My cup of tea!

The first time when I heard the name ‘Simple economics’, I probably thought that economics and my interests don’t much match and my mind had already decided to keep it at bay. The name suggested that these articles will be very long and definitely not be able to hold my attention. My head swayed like a pendulum and I said to myself ‘Simple eco-NO-mix’. A few days later I again heard that these articles are small, rich, and edifying and that made me Google and read about simple economics column in the business line. Trust me, I was lost in it and was sure that these column has got all the ingredients in the right proportions to captivate any individual.

I started the day by glancing through some of the articles in collector’s edition of Frozen Thoughts. Some of them were green with life and a few others seemed to voice for a difference. These articles were pearls of wisdom and reminded me of the Simple economics behind it.
Like all, I too started to wait for Sundays, not just because it’s weekend or time to rejuvenate but because it’s time for simple economics and time to comprehend yet another way of life.

Let me pen on a few of them and leave the rest for you to explore:

- Broken window theory
This theory explains how a small unfixed broken window can lead to a burglary! ie how one one small thing can lay the path for something big.
For instance, there are two children ‘A’ and ‘B’. You ask both of them not to enter into a room. When ‘A’ enters that prohibited room the probability of ‘B’ also entering that particular room is higher. Why? This is substantiated by a fence experiment which describes how one offence can lead to another.

- Blame it on NAcc
After reading this article, whenever I got lure to buy something that was not really a necessity, I dint wince at pain that came after seeing the price tag. The decision to buy was not mine and I blamed it on NAcc lol. In most of my shopping NAcc dumped the insulia.

- Psychology of greatest ever
I remember how many Facebook titles changed when A.R.Rahman won the Oscars. How many tweets come when Sachin hits a century! And how many SRK fans altered their heading in Orkut when his new flick released! I too go by the feel good factor after watching Hrithik on screen :)

- Why thinking too hard is bad
I witnessed this in Grammar section when I gave the CAT exams. Initially, I thought option ‘b’ would be apt, a second look got me closer to option ‘a’. While I was juggling between ‘b’ and ‘a’, option ‘c’ seemed to fit in the best. I chose some option to later discover that I hit the bull’s eye in the first attempt but later changed my option as I kept thinking harder. Sometimes ‘to blink’ yields better than the results that are got from ‘to think’.

- Tipping model
Find out why do you have To Insure Prompt Service when you visit any restaurant despite the fact that you are not likely to visit that restaurant in near future?

- The Pike syndrome
Consider that you have invested ‘X’ in share market. That portfolio rose in just a few months and you dint sell it then because you anticipated it to rise higher. Unfortunately, the markets declined and you are not ready to invest in that share again. Why?

- Delayed Gratification
Here is a reason why life insurance is important. It explains how a little sacrifice today can help you brighten your tomorrow.

- Power of social networks
I was earlier a little apprehensive to use social network sites. Sometimes I felt they were time wasters but hey they aren’t. The tweets show me how I spent my every day, the Linkedin made me stay professionally connected and Orkut titles reflected my mood and developed my acquaintance circle.

- Tune your expectations
There is a simple economics attached to our expectations as well. A lower expectation is a key to success and I vouch for it that one can expect high from self and low from others.

- Obsessive compulsive internet disorder
This is one of the disorders that many of us face. Here there is a correlation that goes behind our likes and our wants. Check out about the dopamine effect too.

As I started reading the articles in simple economics in Business line, I realized that in life, anything and everything has a simple rational behind it. These articles in Simple economics not just give you a horizontal coverage of a plethora of topics but also give you an in depth vertical expertise. To sum it up, I learnt how simple things can contribute in making vital and valid decisions. It is the dot to the ‘i’ and the cross to the‘t’ that makes the difference. Likewise it is the simple economics attached to our deeds that makes our learning from life more meaningful.

Kudos to B. Venkatesh, the author of such a wonderful column! I must admit that simple economics has got an indelible spell on me.

Principles of life!

These are some laws of life that we follow and we dont know that we follow. Here are some interesting principles that you can relate to your every day actvities:

-Murphy’s law
‘Anything that can go wrong will go wrong & at the worst possible time, in the worst possible way’
You lie to your friend ‘X’ that you are not well and avoid going for a movie with her. The actual reason being you wanted to go to a beach with your other friend ‘Y’. You carry on with your plan and go to beach with ‘Y’ just to find that since you were not well and couldn’t make it to movie, your friend ‘X’ also altered her plans and came to beach with her other friends. Oh ho, bad time for you and that’s Murphy law for you!

-Parrondo’s paradox
‘A losing strategy that wins’
Sometimes we have a dilemma of whom to choose between your friends ‘A’ and ‘B’ who dislike one another completely. Fortunately, you like them both and don’t want to leave either. If you take side of ‘A’ then you run the risk of losing ‘B’ and vice versa. You lose if you choose ‘A’ and you lose if you choose ‘B’.These are your two losing strategies which nullify the effect of each other to make you win. What do you do then? You try to strike a balance between ‘A’ and ‘B’.

-Parkinson’s law
‘Work expands so as to fill the time available for its completion’
This is my favorite because I have witnessed so many instances of this law in my life.
Wardrobe- My almirah was getting packed with clothes and I shifted to a bigger one just to find that this too got packed!
Assignments- Day 1, I decide the chart of how to split the work and complete the work which has to be submitted after 20days. Obviously, the work gets its finishing touch on day 19 or sometimes even on the day of submission! In other words, Work expands so as to fill the time available for its completion. What to do lol. A simpler and common instance could be that of expenditure which rise to meet income’

-Peter principle
‘In a hierarchy every employee tends to rise to his level of incompetency’
This law asserts that people are competent only up to a certain stage beyond which they become incompetent. Initially I didn’t quite much agree to this principle but one of the examples here will make you comprehend better.

-Dilbert principle
‘Leadership is a nature’s way of removing morons from the productive flow’
This principle states that it is good to have not so competent people at the middle management because they will not be clever enough to cheat their counterparts or other employees. In other words such people are promoted in order to limit the amount of damage they are capable of doing. Who knows, the management may also promote such people so that they won’t be able to decipher the amount of lootings that the people at top might do lol.

-Pareto principle
‘80% of the results are produced by 20% of our investment’
The famous 80- 20 rule and one of the well suited examples for this is the exam preparation. Most of the students give their exams by utilizing the most during their study holidays. Study holidays constitute approximately 20% of their semester schedule, preparing in which they are able to deliver 80% of their results.