Sunday, January 31, 2010


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.


Sandhya said...

Whoa!!! Somebody likes 'simple economics' now!! I'll follow suit :D

Priya said...

Simple economics seems to be all about keeping things simple :)

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Liza said...

This is inspiring for all economists. :)