Monopolistic Economies

Laziness and general sickness takes up whatever time is remaining from the time that is spent on discussions and proof reading of assignments.

So, I decided that today I should definitely blog.

Today's class on economics was about Monopoly. The only Monopoly knew was the game that we used to play in BITS during my last semester. Placement season and people had absolutely nothing to do other than attending PPT's, giving tests and interviews. Courses were taken for the sake of getting a few credits, otherwise people were vela in life.

And then Monopoly came into our lives. A great strategy game, wherein we bought cities all over the country, built houses, established businesses and managed portfolios. No, this wasnt that simple. It was based on masterplans, joint ventures between favorable opponents and a number of other factors. In fact, I would say that it needed a lot of business acumen. And the whole thing ran into few days too. People would break for lunch or dinner and continue various business transactions.

At ISB, Monopoly was a bit different.

When it came to a discussion, we were asked to imagine a scenario where there is just one firm in the market. Immediately, our doctor sahib contributes to the class participation by telling - SAROVAR at ISB. Junta is impressed and starts the usual applause.

(the rest of the world please note that Sarovar is a hotel chain - associated with Carlson Hospitality Worldwide)

Further on, we ar talking about SUNK COSTS (incurred but not recoverable) and then from the back of the class -

"Wedding expenses are sunk costs". A big round of applause.

The Prof immediately replied - "So, it should not affect your decision going forward".

The idea was that Sunk Costs should not affect economic decisions.