CONDUCTED BY: SIMSETT CLUB
NAME OF THE GUEST / SPEAKER: ASHISH KULKARNI
THEME: HOW TO THINK LIKE AN ECONOMIST
The session was conducted on the topic “How to think like an economist ”. The session started at 10:30 am on 6th September 2018. The speaker of the session was DR. ASHISH KULKARNI.
The session started with the topic “INCENTIVES MATTER.” The speaker talked about how everything in life has an incentive attached to it. He mentioned the example of an instance that happened in England where in order to increase the population of Australia after England captured Australia, (Englishmen did not know what to do with Australia and they were putting people in Australia by force) they made use of incentives wherein they were paid according to the people who are alive at the end of the journey. At this stage, the speaker hilariously mentioned about the abbreviation TMKK, Toh mai kya karoon? (what should I do with the information you have provided?”
The next topic he talked about was “COSTS MATTER.” He talked about the concept of opportunity cost, the cost of the opportunity forgone. Another concept which he talked about was sunk cost fallacy, an important topic of behavioural economics. An important and informative example was used by him where in talked about how people tend to use amazon prime. He talked about how people tend to use Flipkart less when they take a subscription of amazon tend to use Flipkart as they think about using amazon as they already paid money for it. The same concept applies when we sit to watch a movie even though the movie is not good as we have already paid money for the tickets.
The next topic was about “INFORMATION MATTERS”. He mentioned about how google, Facebook and other such services are free of cost as they depend on information we provide to them for their profits. Information we provide to google such as our location are sold to advertisers to generate profit. He emphasised on the fact that information is priceless in this world.
The next topic was about “EXTERNALITIES MATTER.” While addressing this topic, he talked about how different commercial activities start when people start moving to a particular place. For example, because there are people who are willing to work in colleges, more colleges, coaching institutions, discos and other such commercial businesses start coming up. He talked about how there are externalities to every economic policy and very situation.
The next topic which he addressed was “TRADE MATTERS”. He talked about how economics is a non- zero sum game and how our economy depends on our trade. He addressed the question of why people hire cooks. He talked about how the reason behind hiring cooks is mutual benefit, as in both we and the cook benefit when we hire them. While answering the question of whether we should buy Chinese goods, he talked about how Indian economy should be benefited by the cheap products of China rather than loosing out on them.
While addressing three questions related to macroeconomics. “what does the world look like?”, “why does it look the way it does” “what can we do to make it better?”. He showed the economics tool ‘gapminder.org” to explain the concept better. He used the tool and showed how India has developed over time when compared to other countries
This topic was concluded,