Department of Economics

Ashoka University is a private university located in Sonipat, Haryana, India, focusing on liberal arts and sciences. It was established in 2014.&nbsp;It is guided by an academic council of academics and scholars from around the world. The council sets the university&#39;s academic standard, advising on matters of curriculum, faculty hiring and research.&nbsp;

Ashoka University offers a full-time 3 (+ 1) year undergraduate programme. The University comprises of&nbsp;2500 plus students, with a mix of both national and international students.&nbsp; &nbsp;

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Ashoka University

We address the oft-repeated criticism that the demands which the rational choice approach makes on the knowledge and cognition of a decision-maker (DM) are way beyond the capabilities of typical human intelligence. Our key finding is that it may be possible to arrive at this ideal of rationality by means of cognitively less demanding, heuristic-based ecological reasoning that draws on information about others’ choices in the DM’s environment. Formally, we propose a choice procedure under which, in any choice problem, the DM, first, uses this information to shortlist a set of alternatives. The DM does this shortlisting by a mental process of categorization, whereby she draws similarities with certain societal members—the ingroup—and distinctions from others—the outgroup—and considers those alternatives that are similar (dissimilar) to ingroup (outgroup) members’ choices. Then, she chooses from this shortlisted set by applying her preferences, which may be incomplete owing to limitations of knowledge. We show that, if a certain homophily condition connecting the DM’s preferences with her ingroup–outgroup categorization holds, then the procedure never leads the DM to making bad choices. If, in addition, a certain shortlisting consistency condition holds vis-a-vis non-comparable alternatives under the DM’s preferences, then the procedure results in rational choices. © 2019, Springer Science+Business Media, LLC, part of Springer Nature.

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Theory and Decision

Rational choices: an ecological approach

We analyze the formation of partnerships in social networks. Players need favors at random times and ask their neighbors in the network to form exclusive long-term partnerships that guarantee reciprocal favor exchange. Refusing to provide a favor results in the automatic removal of the underlying link. Players agree to provide the first favor in a partnership only if they otherwise face the risk of eventual isolation. In equilibrium, players essential for realizing every maximum matching can avoid this risk and enjoy higher payoffs than inessential players. Although the search for partners is decentralized and reflects local partnership opportunities, the strength of essential players drives efficient partnership formation in every network. Equilibrium behavior is determined by the classification of nodes in the Gallai–Edmonds decomposition of the underlying network. Copyright © 2019 The Authors.

Theoretical Economics

Efficient partnership formation in networks

Page 1. Third-party Audit and Tax Compliance – Evidence from a Notched Policy in India ⇤ Click here for the latest version {\ldots} One way to circumvent the problem of low tax revenue is to rely on private agents to increase tax compliance. Though such policies are quite pervasive {\ldots}

Third-party Audit and Tax Compliance–Evidence from a Notched Policy in India

We consider the relationship between inequality and the business cycle. Empirical evidence suggests mutual causality between GDP and inequality over the business cycle and the countercyclical nature of inequality. We construct an evolutionary game-theoretic model with two types of workers to explain these observations. Cognitive workers produce capital of varying quality, which determines the productivity of physical workers who obtain the capital through an exogenous search process. We apply the logit dynamic to the model. The model satisfies positive definiteness due to which, both GDP and inequality converge to limit cycles and, therefore, fluctuate over time. These cyclical fluctuations have a common origin in the underlying evolutionary dynamic process, which explains the empirical observation of mutual causality between these variables. Further, simulations suggest an inverse relationship between GDP and inequality in our model, which accounts for the countercyclical nature of inequality.

Network Theory and Agent-Based Modeling in Economics and Finance

A limit cycle view of inequality

We address a common criticism directed toward models of expressive voting that they are ad hoc in nature. To that end, we propose a foundation for expressive behavior that is based on a novel theory of social preferences under risk. Under our proposal, expressive considerations in behavior arise from the particular way in which risky social prospects are assessed by decision-makers who want to interpret their choices as moral. To illustrate the scope of our framework, we use it to address some key questions in the literature on expressive voting: why, for expressive considerations, might voters vote against their self-interest in large elections and why might such elections exhibit a moral bias. Specifically, we consider an electoral set-up with two alternatives and explain why, when the size of the electorate is large, voters may want to vote for the alternative they deem morally superior even if this alternative happens to be strictly less preferred, in an all-inclusive sense, than the other. (JEL D01, D03, D81, D72, A13).

Economic Inquiry

Voting Expressively

In India, role of women as farm managers has been veiled behind image of men as primary decision makers on farms. Data shows that approximately 8% farm households had women farm managers in India in 2004 and this number increased to 11% in 2011. This rising phenomenon of farm management by women begets an in depth understanding about these farms, including, differentials in productivity levels across men and women managers. This paper uses three measures to capture productivity – production value, profit value and crop specific yields. Results show that total farm production and profits are lower by approximately 11% in households where women manage farms. This falls to 7% when controls for crop choice, input usage, location and farmer characteristics are included. The main mediating factors in explaining the productivity gap are crop choice and input usage, explaining almost 45% of the productivity gap. Further, the paper provides suggestive evidence on mechanisms contributing to the remaining productivity difference that cannot be explained by differences in observed characteristics. It shows that inadequate experience of women farm managers in agricultural production processes can be an important factor behind the remaining gap. The study makes two contributions to the literature – one, it is the first quantitative study in the Indian context on gender differentials in farm productivity and second, it applies semi-parametric decomposition techniques to look at the productivity differentials along the entire distribution.

World Development

Back to the plough: Women managers and farm productivity in India

The 10% quota for the economically weaker sections completely overturns the original logic of reservations on its head, while misconstruing the EWS category itself. Data suggests that caste remains a critical marker of disadvantage, even amongst the “poor.” © 2019 Economic and Political Weekly. All Rights Reserved.

Economic and Political Weekly

The 10% quota is caste still an indicator of backwardness?

The Economy is a worthwhile initiative that seeks to teach students about the economy, as opposed to teaching economics. The macroeconomic aspects of the textbook are critically scrutinised to understand what is being taught and how different the treatment is from extant approaches.

Macroeconomics in the Economy

In contrast with global trends, India has witnessed a secular decline in women's employment rates over the past few decades. We investigate this decline in rural areas, where the majority of Indian women reside. Using parametric and semi-parametric decomposition techniques, we show that changes in individual and household attributes fully account for the fall in women's labor force participation in 1987–1999 and account for more than half of the decline in 1999–2011. Our findings underscore increasing education levels among rural married women and the men in their households as the most prominent attributes contributing to this decline. We provide suggestive evidence that changes in more educated women's relative returns to home production compared with market production may have adversely affected female labor force participation in rural India.

Journal of Population Economics

Why are fewer married women joining the work force in rural India? A decomposition analysis over two decades

The authors present a version of the Diamond-Mortensen-Pissarides model of unemployment that is accessible to undergraduates and preserve the dynamic structure of the original model. The model is solvable in closed form using basic algebra and admits a graphical representation useful for illustrating a variety of comparative statics. They show how to use the model to teach the effects of labor market policies, advancements in Internet technology, and labor market dynamics. Supplementary materials such as teaching tips, a classroom experiment, and online resources including a JavaScript-based simulation tool, U.S. data used to make figures, and practice problems are provided. © 2018 Taylor &amp; Francis.