Attend Spring Meetings on Development topics from Apr 17-21. Comment and engage with experts. Calendar of Events

Syndicate content


Does superior information make us more discerning? What Uber drivers can teach us about learning and rationality

Roxanne Bauer's picture

In 1957, Herbert A. Simon (Nobel Prize in economics 1978) introduced the concept of bounded rationality that recognizes that in decision making, human rationality is limited by the information we have, our own cognitive biases, our training and experience, and the finite amount of time we have to make a decision. Individuals and firms do the best they can with the information they have, and since they don’t have time to evaluate and rationally pick the optimal solution, they simplify their choices and go with one that is satisfactory rather than rationally optimal—this is called stastificing.

Behavioral economics accounts for this by attempting to incorporate psychological insights. While most economists agree that there are some limits to the reasoning capabilities of individuals and firms, there has been much discussion about where and how to account for bounded rationality.  On the spectrum between perfect rationality and the total absence of it, where are humans?

To explore this question, let’s take a look at cabdrivers and Uber drivers.

Devel-APP-ment - The Top 5 Lessons from the App Industry

Tanya Gupta's picture

The big 5 multilateral development banks(MDBs) (World Bank Group, African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, and Inter-American Development Bank) collectively provided close to $100 billion in concessional and non-concessional lending in 2012 or FY13. Of late, their size, traditionally an advantage, has become something of a disadvantage. The MDBs are facing intense challenges in at least three major ways. One - criticism from academics, developing nations and others that foreign aid is detrimental for a country’s growth. Two - technology has diluted the monopolistic advantages they had (knowledge, networks, access to funding) and is leading to new models of development.  As echoed by World Bank President Jim Kim, there is a "need for alignment" for development institutions in "a rapidly changing world."  Three - more and more countries are shifting from demanding traditional loans to demanding knowledge and knowledge products, and development institutions are only now starting to respond to this challenge.

Media (R)evolutions: What is the Economic Impact of Geo Services?

Roxanne Bauer's picture

New developments and curiosities from a changing global media landscape: People, Spaces, Deliberation brings trends and events to your attention that illustrate that tomorrow's media environment will look very different from today's, and will have little resemblance to yesterday's.

In our everyday lives, geospatial science and technology services, such as digital mapping, GPS, and other location-based services, are changing the way we operate. These services help us navigate the world, saving time, facilitating our entertainment needs and widening the breadth of markets. These technologies also generate huge amounts of economic activity in the form of research and development, programming and cost savings.

A recent study by economic consultancy firm Oxera, on behalf of Google, illustrates how big the industry has become. Internationally, the firm states, the geo services industry is valued between $150-$270 billion per year and pays around $90 billion in wages.