The Rational Irrationality Complex

1147 Words5 Pages
According to John Cassidy, markets fail due, not because of greed but rather to the fact that they act irrationally. Their irrational decisions and results can be, in part, hindered and corrected by government intervention. That markets fail mostly due to irrationality rather than to greed can be seen from the scenario of the retail bookstores, particularly Borders, vs. that of e-book publishing. It appears that e-book publishing may have a future (PWC, nd), but many book stores are slow to acknowledge and appreciate that fact. Borders was one of those companies who failed to foresee the future and acknowledge the fact. More so, they made the astounding error of employing one of their key competitors to conduct some of their business. According to Cassidy, cognitive heuristics lead people to be over optimistic about their future and opportunity, therefore making them unaware of certain trends that should bother them. It is their smugness and obtuseness that causes them eventually to fail. Some of the retail bookstores fail to appreciate the significant thereat threat that digital book publishing continues to pose. At one time, it is true, e-book publishing barley made its niche. This was particularly so in Europe. But Amazon Kindle and similar tools have made it more acceptable and popular and studies such s those by PWC (nd) predict incremental but sure growth of the digital book publishing future. Hermans, for instance, plans to make e-books part of her
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