FAM Weekly Summaries 2024

Week 1:

● We define marginal utility as the additional satisfaction a consumer gets when you
have consumed one more unit of the product. For most products, in general,
marginal utility keeps declining with every additional product you consume. The
best way to think about marginal utility is the money that comes into your pocket,
whereas price is the money that goes out of your pocket (expense you incur). So, as
long as MU happens to be greater than price, you have everything to gain.
● Therefore, how can we construct a demand curve? When price decreases, existing
consumers have greater incentive to consume more, whereas new consumers tend
to join the market. Therefore, the demand curve is downward sloping, everything
else being equal. Of course, there are issues: it is within a range, time dependent,
etc.
● Now, let us understand the supply side of the story. What happens when the price
increases? Existing suppliers want to supply more, and the new (perhaps, not so
efficient) suppliers also want to enter the market. So, everything else being constant
(jargon is, ceteris paribus), supply curve is upward sloping.
● A market is not made of either suppliers or producers alone. It requires BOTH of
them to participate. If there is a place where producers and buyers can interact,
Adam Smith says that, as if controlled by an invisible hand, optimal price and
quantity get determined in the market. What happens if the price is less than the
equilibrium prices? Shortages. What happens if the price is more than the
equilibrium price? Excess supply. I wanted you to visualize the following:
○ Demand remains constant; supply curve shifts to the left/right
○ Supply remains constant; demand curve shifts to the left/right
○ What happens when both curves shift? You should have four different
combinations
○ You should be clear by now on what variables (price/quantity)
unambiguously increase/decrease, and which of them could go either
direction.

● Let us go back to the demand curve and consider the price elasticity of demand. It is
nothing but the percentage change in the quantity consumed for a per cent change
in the price of the product. While various textbooks talk about several methods of
calculating elasticity of demand, I follow the simple metric of the inverse of slope
multiplied by price quantity ratio.
● If elasticity is less than one, we call the product price inelastic. In other words,
consumers DO NOT react to price change as much. So, if you increase the price,
while your overall quantity decreases, your total revenue increases. Here is a small
nuance I want to get: FOR PROFIT MAXIMIZATION, NEVER OPERATE IN
THE INELASTIC REGION OF THE DEMAND CURVE. Why?
○ Profits are loosely defined as revenue minus cost, right?
 ○ When you increase the price, your revenue goes up, right?
○ And when quantity decreases, your overall cost goes down, right? (I know
some of you are itching to say, it can remain the same. Granted! Even if it
remains the same!!!)
○ So, when price increases revenue increases, but cost remains the same or
reduces, right? So, profit has to go up, right?
○ Remember, every product becomes elastic after a price... So, simple logic: If
your product is inelastic, you simply are not charging enough
● If elasticity is greater than one, we call the products elastic. Market is highly
sensitive to price. So, if price increases, quantity decreases more than the increase
in price. So, total revenue goes down. Similarly, if price decreases, quantity
increases more than price reduction. So, total revenue goes up.
● Understand the factors that influence the elasticity of demand
○ Price of the product – products become more elastic as the price keeps
increasing
○ Affordability – as affordability increases, products become more inelastic
○ Substitutes – More substitutes imply greater elasticity. That is why products
tend to be less elastic than the brands
○ As an aside, I hope all of you are clear on when regulation becomes important.
When the need is high, but affordability is low, regulation comes up. PSUs
have a similar role to play as well
● We also discussed how other people’s consumption influences elasticity of demand.
We called them direct and indirect network effects.
○ Direct network effects: The more people consume, everything else being
equal, the more inelastic the product becomes
○ Indirect network effects: I am a platform, and the more one side joins the more
the other side finds the demand to be inelastic (everything else being equal)

● Now that we established the demand side, let us turn to the supply side. To see this,
we first look at productivity
○ AP is the number of units produced DIVIDED by the total workforce, and
MP is the additional production for an extra worker.
○ I explained how AP would be inverted U shaped curve, and how MP would
intersect AP at the top AP curve. As long as MP is above AP, AP increases.
(Think run rate here!)
○ In the short run, as some factors are fixed, increasing others beyond a point
will start generating negative productivity. That is why MP can go negative
as well.
● We distinguished between two types of costs: Fixed and variable. Total cost is F +
w. L. F is the fixed cost and w.L is the variable cost
○ Average variable cost is nothing but wL/Q = w/(Q/L) = w/AP. Since AP is
inverted U shaped, AVC is U shaped.
○ AFC is continuously decreasing. (Why?)
○ Similarly, MC = w/MP
 ○
AC = AFC+AVC
○
Using the same run rate logic, convince yourself that MC would intersect at
the bottom point of AC and AVC
● We discussed: MC curve above AVC is the supply curve of the firm. Why?

Week 2
• Any part of the fixed costs that are not recovered are called SUNK COSTS
• Sunk costs do not play a role in decision-making AFTER you incur them. But
whether you will enter or not will critically depend on sunk costs
• We also discussed how sunk costs are becoming variable costs in the modern era. Let
me elaborate. Earlier, if you wanted to advertise for a product, you would hire time
during a TV show and air the commercial. That is a sunk cost, right? Today, you buy
a space on a website. And you pay ONLY if someone clicks on your advertisement.
So, in some sense, it is a variable cost (not quite, but it is not fixed either.)
• Here is where I made you take the first oath: THOU SHALT ALWAYS IGNORE
SUNK COST IN THY DECISION MAKING
• Once you enter, your hope is that (p-AVC) multiplied by quantity is good enough to
cover the sunk costs
• We also discussed several examples where you control both P and Quantity, it can
lead to market failure
• At the same time you have to consider opportunity cost for decision making. What is
opportunity cost? It is the cost of next best opportunity foregone
• Here is where you took the second oath: THOU SHALT ALWAYS CONSIDER
OPPORTUNITY COST IN THY DECISION MAKING
o One of the things I asked you to look up re opportunity cost is comparative
cost advantage. In short, it is an explanation for why you should not be doing
everything even if you are amazing at everything
• So, what is the cost of doing an MBA? Fun, isn’t it?
o I want all of you to print that calculation, and stick that paper where it can
constantly remind you what the real cost of doing MBA is…
• Third oath: NEVER FORGET OATH 1 AND OATH 2
• Do you produce when price is less than average variable cost?
o When there are startup costs
o When there are network effects
o When alternative sources of revenue are available
o P<AVC is not permitted by law, except in some circumstanes. This is referred
to as predatory pricing, and in the context of international trade: Dumping
• In the long run, if I increase output my average cost comes down. We call this,
economies of scale. What are strategic implications of economies of scale?
o Merges and Acquisitions, market consolidation and standardization
o Production linked incentives are tightly linked with economies of scale
o Why do you have economies of scale? Standard operating procedures, bettern
bargaining with the vendors, etc.
• Firms that enjoy perpetual economies of scale are called NATURAL MONOPOLIES
o Typically, these firms tend to be monopolies, regulated by the government
• We also discussed economies of scope, where variety is everything. Why do we have
economies of scope? We specifically discussed to reasons:
o Tightly linked production processes
o Brand name, etc.
• We also discussed consumers’ and producers’ surplus
o Simply put, consumers' surplus is the difference between what the consumer
intends to pay and what the consumer ends up paying. Graphically, it is the
area under the demand curve, above the price, left of quantity
o Producers' surplus is the difference between what the producer receives and
what the producer wants (price and the MC). Graphically, it is the area above
the supply curve, below the price left of quantity.
• Given the number of questions I saw on the concepts of consumer and producer
surplus, I thought I would elaborate what they mean using very simplified examples:
o Imagine there are several consumers, each wanting one unit of a commodity.
To keep it even simplistic, let us assume that they need one unit and one unit
only. Each consumer has a different marginal utility associated with the
product. Suppose, consumer 1 has a marginal utility of 100, consumer 2 has a
marginal utility of 99 and so on. In other words, Consumer 1 is willing to pay
Rs 100, consumer 2 is willing to pay Rs 99 and so on. Now, imagine the price
of the product to be Rs 20. How much has the consumer 1 gained by
consuming the unit? 100 - 20=80, right? Consumer 2 would have gained 99-20
= 79, correct? And so on till you reach a customer who places a value of 20
for the product. Any consumer below this value would not consume. Now,
what is the total gain from all these consumptions? 80 + 79 + 78 + ...Does that
make sense? So, graphically, it is the area under the demand curve to the left
of quantity above the price...
o Similarly, assume an industry's supply curve is something like this. MC of the
first unit is Rs 1, MC of second unit is Rs 2, and so on... So, how much did I
gain by the first unit? Rs 20 - Rs 1 = 19. Second unit is 18, and so on. So what
is the total producers' surplus? 19 + 18 + 17 + ... It is simply the area above the
supply curve, below the price, left of quantity.
o Total surplus is consumers' surplus + producers' surplus. In simple words, it is
MU - MC. Imagine, someone wants to pay Rs 20 L for a car, and the cost for
Maruti is Rs 2 L. Say, price is Rs 5 L. Consumers' surplus is Rs 15 L and PS is
Rs 3 L. Total surplus is 18 L, which is same as MU-MC.
• What is perfectly competitive market?
o There are too many buyers and sellers that no single player has any major say
in the market
o Entry and exit are free
o Price is fixed by some entit
o There is probably minimal product differentiation
 o I think I mentioned US generic drug market (where brand name is not
allowed) as one of the examples of quasi-perfect competition
▪ There are so many generic medicine manufacturers in India, Israel, US,
Canada, etc. that are willing to pounce on any medicine at a moment's
notice. With the doctors not being allowed to write brand names of
medicines on their prescription pads, there is almost zero product
differentiation
• You need to convince yourself that price equal to marginal cost is the equilibrium
• To convince yourself, consider the following example:
o Say, the price prevailing in the market is Rs 15. You are currently producing
10 units, and your current total variable cost is Rs 100
o Now, suppose you are considering producing 11 uits, and your total variable
cost increases to Rs 112. That is, marginal cost for 11th unit is Rs 12
o If you, indeed produce the 11th unit, the cost you incur is Rs 12, but the
revenue you obtain is Rs 15. So, your profit increases by Rs 3
▪ To convince yourself, let us do the following calculation: Currently,
your total variable cost is Rs 100, and your revenue is 10*15 = Rs 150.
So, gross profit is Rs 50
▪ Now, if you produce 11 units your revenue increases to Rs 165. And
your cost is Rs 112. So, your gross profit moves to Rs 53, which is
greater than Rs 50
▪ Your average variable cost was 10 earlier, and now it is 10.18
o Let us look at the other side. Imagine you produce 10 units at Rs 15 each.
Your total revenue continues to be Rs 150. And your total variable cost
continues to be Rs 100. Your profit is Rs 50.
▪ At the same time, let us assume producing the 11th unit costs you Rs
17 extra (marginal cost).
▪ If you produce 10 units, your profit is 50. If you produce 11 units, your
revenue is Rs 165 and your cost is Rs 117. This implies your profit is
Rs 48
▪ This implies your profit reduces.
▪ Notice, average variable cost at 11 units is 170/11= 10.63.
▪ So, now if you assume the product to be infinitesimally divisible, you
have a nice rule: P = MC is where you stop production. If the product
is not infinitesimally divisible, you stop at the last point where P>MC
o I hope this example convinces you that it is marginal cost, and not average
variable cost, which ought to define production decisions.
o In common lingo out there, they describe margin to be the difference between
price and some kind of average cost. I think it more a practical solution than
the ideal solution
• Total surplus is highest when there is free market. That is, there is perfect competition
Week 3
• In short, we know that Adam Smith has invisible hands, and they operate their magic.
If those hands become visible, we have a problem. We specifically discussed the
following cases:
o What happens if the price is forced to be higher than the market price?
o What happens if there are supply restrictions?
o What happens when the price is lower than determined by the market?
o What happens when there is a presence/absence of international trade?
o What about minimum support price in agriculture?
▪ Governments lost a lot of money from their exchequer to manage MSP
▪ Lots of food gets wasted in government-operated warehouses
▪ Inefficient cropping patterns/crops also emerge
o Make sure you understand the changes in CS and PS in all these cases
o Realize: All these are true under the assumption that total surplus is
consumers’ surplus PLUS producers’ surplus. Both these surpluses have equal
weight in decision-making. Who is to say these weights are the same?
Depending on the state of the economy, the weights keep changing
• How do we think about monopoly?
o Markets that have a single seller and many buyers
o Monopolies happen because: patents/IP, cornering of resources, etc.
• Step 1: Define a new concept called marginal revenue. Additional revenue for every
additional unit sold:
o In a perfectly competitive market, I am selling everything I am producing at
the same price. So, marginal revenue is nothing but price
o In a monopoly, I am setting the price. To sell another unit, I need to reduce the
price. And this reduction applies to all products, not just the last product
o So, marginal revenue is less than the price
• Step 2: How do Monopolist’s revenues start looking? As discussed, the midpoint of
the demand curve (in a linear demand curve) is where elasticity is equal to 1. To the
left, elasticity is > 1 and to the right of it (elastic), it is < 1 (inelastic)
o Suppose, you are operating to the left of the midpoint. You are in the elastic
region of the demand curve. So, if you decrease price, you sell more, and your
total revenue improves. (I know we discussed it a LONG TIME AGO in Week
1, but refer to those notes if you need to.)
o Suppose, you are operating to the right of the midpoint. You are in the
inelastic region of the demand curve. So, if increase price, you sell less, but
your total revenue increases (again, refer to your long lost notes from Week 1)
o An immediate corollary of the above statements is, the total revenue keeps
increasing till the midpoint with every reduction in price. That is, total revenue
hits maximum when you reach the midpoint. YOU REALLY NEED TO
CONVINCE YOURSELF OF THIS BEFORE YOU MOVE FORWARD
o Total revenue is increasing implies, marginal revenue is positive. And total
revenue is decreasing implies, marginal revenue is negative.
 o So, marginal revenue is positive till the midpoint, and becomes negative after
that. How would I be able to draw that? Refer to the excel sheet I circulated
for a numerical illustration.
▪ MR curve starts along the demand curve, and then keeps declining
(BUT POSITIVE) till the midpoint, and then becomes negative
• Step 3: Understand how monopolist sets quantity decisions.
o You should realize the golden rule: Money out of pocket (MC) needs to equal
the money that comes into the pocket (MR).
▪ Convince yourself that as long as MR<MC, you should be cutting
down on the production. Not producing that unit improves your profit.
Similarly, as long as MR>MC, you should be increasing your
production. Producing that unit improves your profit.
▪ If you are still not convinced, look at the excel file – particularly the
tab that is titled: Profit Analysis
o Therefore, a monopolist sets the quantity where MR=MC. Let’s call this
quantity Qm.
• Step 4: Understand how price is set. The optimal quantity is Qm. So, the question to
ask is, what should be the price prevailing in the market so that Qm can be sold? I am
not answering that question. Practice the picture in the class, and you will be able to
convince yourself.
• I also provided you a mathematical formulation of the entire thing, and my views on
the same. Let’s leave it at that. It is fair for me to expect that you have all convinced
yourself that in the world where the product is infinitesimally divisible, MR = MC. In
a world where the product is not divisible, the maximum quantity where MR is
greater than or equal to MC is where we stop producing.
• I hope, by reviewing all this, you managed to convince yourself that it is impossible
for a monopolist to operate in the inelastic region of the demand curve.
• Why is monopoly inefficient?
o In a perfectly competitive market, P = MC. In a monopoly, P>MR = MC.
Therefore, the quantity a monopolist sets is necessarily lesser than the
perfectly competitive world. So, there are a few consumers whose marginal
cost is greater than marginal utility, but they are denied consumption. This
leads to deadweight loss.
• If monopolies are inefficient, why do governments allow monopolies (patents)?
o In a pharmaceutical or a technology-driven industry, innovation is costly,
whereas replication is not. So, in order to encourage innovation, patenting
exists
o A traditional poster child for non-patent arguers is Jonas Salk, the inventor of
the Polio Vaccine. They miss the point that incentives heavily drive
incremental innovation. The role of incentives in breakthrough innovations is
questionable. Another simple argument is, thank God, there are still people
who do not think like economists!!
o We also discussed the Indian Patents Act and my work on rare diseases
Week 4
• We ended up defining three kinds of price discrimination. For price discrimination to
exist, we need the case of resale not being possible. We defined three kinds of price
discrimination, which require various information to be available:
o First-degree price discrimination: Imagine a case where a monopolist
completely knowns the valuation of an individual consumer (sticker on the
forehead analogy). What is the monopolist likely to do? The monopolist is
likely to customize the price to each person separately. When will the
monopolist stop? As long as the customer’s value is greater than the marginal
cost, the monopolist has an incentive to continue to produce. So, the
monopolist simply usurps the entire consumer surplus. There is also no
deadweight loss. (Why?) We label this as first-degree price discrimination.
▪ As you may have figured out, this kind of discrimination requires huge
amount of information, which may not be practical. However, we are
seeing it gaining traction all the time, thanks to the big data analytics
that are ubiquitous around us.
▪ As an aside, I also want you to interpret discrimination not just in the
case of pricing, but also in terms of product experience.
o So, what could a monopolist do, which is more realistic in the conventional
sense? He can provide quantity discounts, or for that matter, quality discounts.
That is called second degree price discrimination.
▪ As you may have figured out, for small quantities you tend to be price
inelastic. So, for small quantities I charge more. For large quantities I
charge less. Why is it inelastic for small quantities? Affordability
might be a question there.
o Finally, the monopolist can divide the market into various segments, and
charge different prices for each segment. This is third degree price
discrimination. What are the rules he has to follow?
▪ The more elastic the market is the lower is the price. Why? In an
elastic market the monopolist competes a lot (with either close
substitutes or non-consumption)
▪ Marginal revenue also has to be equal across the markets. (Why?)
▪ Who gains and who loses from discrimination?
▪ The marketing course will help you develop several frameworks on
how to dissect the market efficiently
o A major notion that I want to dispel: Discrimination is often used in a negative
way. When it comes to caste, religion, gender, etc, it is true. In the case of
pricing, I am really not sure. Indian is a huge beneficiary of price
discrimination
o On top of it, we discussed ‘top skimming’ and peak load pricing
(discrimination across time)
o We also talked about two-part tariffs where you charge price equal to marginal
cost. This maximizes total surplus. Consumers’ surplus simply becomes an
 entry fees. Play around with what happens when there is a single type and
multiple types of consumers.
• The other strategy we looked at is bundling where you combine some complementary
products and sell them as joint products
o Pure bundling where you want to sell a bundle alone. You do not want to sell
individual products. For example, the case of word and excel, and manager
and secretary.
o Mixed bundling: You not only have bundles, you also have individual
products available. When do you consider mixed bundle? Especially if some
people value a part of the bundle less than the marginal cost of that part.
• Remember, in reality you should be able to combine price discrimination with other
pricing strategies. Elasticity and information are the key drives behind which pricing
framework you choose to pursue
• We defined oligopoly as a market where there are small number of layers, but huge
entry and exit barriers. One of the defining features of oligopoly is intense
competition, either for prices or for quantity. One of the main theoretical premises of
oligopoly is prisoners’ dilemma
• I ended up defining prisoners' dilemma as a point where firms do what is most
beneficial and in that process end up hurting themselves. We discussed the case of
video game consoles and concluded that since the market is not going to be long
lasting, the only strategy is for both firms to reduce their prices. The fun part is,
IRRESPECTIVE OF HOW THE OTHER FIRM BEHAVES, IT IS ALWAYS IN
MY BEST INTEREST TO UNDERCUT PRICES
• Firms, at times, have an incentive to cooperate. But that is sustainable ONLY if the
following assumptions are valid
o I love the future
o I have the ability to detect
o Entry is not easy
o And deviation profit is not that large
• Remember that such agreements are difficult to sustain, especially because they have
no legal sanctity. For this understanding to collapse, all you need is one player to get
edgy. Momentary changes have ability to de-stabilize such agreements! In fact,
studies show that cartel average life span is about 7 years (Margaret Levenstein and
Valarie Suslow, Journal of Economic Literature (2005?)
○ Market conditions play a huge role in sustaining such agreements. We
discussed how even if the overall demand is highly inelastic for clothes during
festival season, firms outdo each other in providing sales. Agreements are
simply not sustainable during such times... After all, by cheating on you, I am
going to gain a lot
○ Given that such agreements tend to be illegal, it is more important to
understand that they are not protected by contract laws. So, the temptation to
cheat without retaliation is always high
 o As an aside, I really want to illustrate the role mafia plays. Since these illegal
contracts are not enforceable by a court of law, the temptation to cheat is high.
Obviously, if a thief cheats another thief, the cheated thief cannot go to the
police for registering a complaint. This means, you need an extra-legal entity
to enforce such legally unenforceable contracts. So, in some sense, there is an
unmet need (or a market for enforcement services) and DONs emerge to fill
that need. Remember, Don ko maarna mushkil hee nahin, naa mumkin hai!
This is because you need mafia to enforce unenforceable contracts.
● Finally, we talked about legal angle as well
○ Any 'explicit understanding’ between various firms in determining prices or
quantity is deemed illegal. If you remember the first handout I gave you on
gold pricing, you would have realized that the five major banks are being
accused of doing this
○ Another thing I want you to realize is these agreements happen at multiple
dimensions. For example, firms distributing geographical areas between
themselves, without talking about prices is not necessarily legal
○ If two pharma companies talk to each other where one specializes in gastro
disorders and other specializes in neuro disorders, then that is not legal as well
● In this context, let me repeat some of the arguments, which are pertinent here, but we
have already discussed elsewhere:
○ Suppose I am a monopolist in one market, but am competing in other markets.
Using monopoly power in one market to destroy competition in other markets
is a smart business idea, but nevertheless illegal
○ Let me illustrate. Microsoft enjoys monopoly power in the Operating Systems
market (actually, used to). However, its internet explorer competes with other
browsers in the market out there. Suppose, MS writes a code into its OS where
other browsers cannot be installed. Then, it is using its monopoly power in the
OS market to destroy oligopolistic competition in the browser market. Another
way MS can do this is, pre-package Internet Explorer into its OS (Windows
without IE is not available). However, consumers have to pay $10 to have
Netscape Navigator installed. So, a duopoly in the browser market is being
destroyed thanks to the monopoly in the OS market. That was the legal angle
for the case. Whether you agree with it or not is your prerogative
○ The law is clear. If you enjoy monopoly power in the OS market, you should
make money in the OS market. That should not entitle you to make monopoly
profits in the browser market as well

Week 5:
• We specifically discussed several important issues that are increasingly becoming a
matter of concern:
o Role of private equity in managing firms
o Algorithms becoming the centre of attraction for price fixing
o Collective bargaining arrangements
o Etc.
• We also talked about predatory pricing. When is predatory pricing sustainable? (I
mean it only from strategy, and not from a legal angle.)
o When long run future exists (for instance, in markets with fast changing
technology, this may not exist)
o In the long run, my brand still matters
o Rival would succumb to pressure
o Long run entry is not possible
• On externalities:
o When your consumption or production decisions impact others significantly,
we can no longer claim that free markets work. Free markets lead to market
failure, a phenomenon where suboptimal outcomes happen
▪ When there is a positive externality – think vaccines – you have
underconsumption when compared to what is socially efficient
▪ When there is negative externality – think polluting industries – you
have over-production when compared to social optimum
o This arises because, when individuals make decisions they care about their
marginal utility/marginal cost and the price; and not the benefit/costs they
impose on others
o How do you solve the problem of positive externality?
▪ Subsidies or take away the consumption decision from the consumers
o How do you solve the problem of negative externality?
▪ Taxes and stringent controls of what is consumed/produced
o Another way is the solution proposed by Ronald Coase
▪ When there are no transaction costs, and property rights are well
defined, socially efficient outcomes will happen irrespective of who
owns the property rights
o For the lack of time, we did not discuss public goods. But public goods
essentially entail a problem popularly referred to as the problem of commons.
What this means is people play alpha without a care for the future. For
example, contribution to environmental causes is always suboptimal
• On adverse selection: We looked at how individuals sometimes incur stupid costs
which are completely not necessary and do not help improve productivity. On the
prima facie while they look stupid, they are well calculated decisions
o This idea of adverse selection is articulated by Akerloff, who says that when
there is uncertainty, high types are hurt
o Why? There is a confusion between the good types and the bad types, and
people value at the expectation. While good types do not get as much as they
deserve, bad times get more than what they deserve. This increases the bad
types, which in turn drives good types out of the market
o So, what do the good types do? They incur some costs that only the good type
can, and the bad type find it not in their interest to mimic. The cost is such that
good type will find it in their interest to incur the cost and bad type find it in
their interest to not incur the costs. That is, a signal is costly, but not too costly
 ▪ In the vide clip, the hero breaks the concrete slab and the rowdy folks
stop advancing. What happens if it is a cardboard slab? What happens
if it is a cast iron slab? I will leave it to think
▪ A fundamental message is, a signal is costly, but not too costly
o We discussed how education is a signal. Even if education is per se not useful,
it helps you to differentiate yourself from your counterparts. So, next time you
ask a professor to cut you some slack, remember all you are doing is, spraying
your vibrantly coloured peacock feathers with grey paint
o So, next time when someone asks you why you want to do an MBA, you can
proudly claim that it is because peacocks have bright feathers. When you are
able to speak jargon like that with a nonchalant demeanour, you really made it
in the MBA circles. Of course, the stunned assumption of the listener that you
are some kind of a genius is an added bonus for you to savour

Well, this is a succinct (really?) summary of what all we discussed over the past five weeks.
Now that the classes are over, here are some thoughts:
• Unfortunately, there are not many textbooks out there that I could feel comfortable
with, that are compatible with my style. Perhaps, this weekly summaries series might
serve as a harbinger to the textbook I will eventually write. Till that point, we have to
make do with the available ones. That is, probably, the reason why I augment the
sessions with so many videos and readings. Probably, even when I write my book, I
will not teach from it. Think peacock feathers.
• Problem with the initial syllabus was that it was too ambitious. So, I chose
pragmatism over idealism. Sometimes, these decisions depended on what was
discussed in the class. Actually, come to think of it, the discussion in both sections
was not always identical. In fact, far from it!
• Remember, I always believed that an economist should never be a policy maker. For
them, everything boils down to money. However, economic input is absolutely
essential

I will end this with a classic line from a dear friend: Economics is like a hammer. For a
person with a hammer in hand, everything looks like a nail. So, resist the temptation.