RATIONAL THINKING WHILE MAKING CONTRACT
Many of us will be wondering how thinking rationally can affect a contract. Well, it does substantially. Thinking rationally makes a person stand out in the crowd. He/ She will ought to know what is profitable for them and what is not. For the sake of understanding, assume a shopkeeper “S”. S procures books from various sources which are A, B and C. A new comic book “Lambu Chhotu” is launched in the market and the kids are going crazy after it. A single book costs around ₹400. As soon as the books are placed on the shelves, the stock clears instantly. S, being a shopkeeper wants to maximise his profits. He asks his suppliers to provide him with as much “Lambu Chhotu” books as possible. A quote’s the price of 1 book at ₹250, B quotes at ₹200 and C quotes ₹300 per piece. Due to shortage of books, each of the supplier is left with only 50 books each. S wants to procure 75 book units. So basically, he will order 50 books from B and remaining 25 books from A. In the due course of the contract, S the shopkeeper reflected how thinking rationally will maximise his profit. Thus, we can see that how rational thinking makes huge changes in daily life chores.
RATIONAL THINKING AT THE MARGIN AS THE LAST RESORT
Thinking at the margin is not only profitable in day-to-day but also in professional work, as it plays a major role in achieving what is desired. A lawyer will try to minimise his client’s punishment as much as possible and at the same time he will try to recover maximum damages cost from the other party. Let’s look at this in another way. Assume you are sure to lose a case and your client is to be hanged as the result of it. There is no helping in it as you have already tried your level best to win the case but you can’t as the opposite party had rock solid proofs against your client. This case is going to be a huge blow on your reputation as you have never lost a case before and that is why you are famous for doing what is best for your clients. So, what are you going to do? Jail Break? Bribing the PA of the Judge? Or try one more time to get the death sentence converted into less severe punishment? It is very obvious, that a rationally thinking human will choose the last option (though we know that human beings are not always rational). This process of thinking at the margin can be observed at every point of life, whether you are working as a lawyer or having lunch at a restaurant, whether you are planning to invest or planning to spend.
Aishwarya Says:
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