Bollywood and economics – BusinessLine

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I was teaching the Prisoner’s Dilemma to my MBA class. Two robbers are caught by the police and detained in separate cells. The police make an offer to the first robber. Confess to the crime and we will let you go scot free while your partner languishes in jail. In other words, become a Sarkari Gawah!
When this offer is made to the first partner, he takes no time at all to extrapolate and understand that a similar offer would be made to the second partner. Each of the robbers is worried that the other will confess. Result? Both of them land up confessing to the crime and get five years in jail. Had they remained strong and silent and importantly, trusting of their partners, they would have landed up with just one year for possession of stolen goods.
Teaching game theory is always fun, and everyone enjoys a game being solved in the class. But this time around, rather than the game, we ended up discussing something totally different — the names of the prisoners. In the reference books on Managerial Economics written by American authors, the robbers are decidedly angrez and admittedly, boring. The reference book I use calls them Individual 1 and Individual 2.
Pooh! I grandly scribbled Jai and Veeru on my whiteboard, waiting for the smileys to appear on the screen. To my surprise, there were hardly any smileys and one question mark. “Uhhh, ma’am?” That was one of my students.
“Individual 1 is Jai. Who is individual 2? I am unable to decipher your handwriting”. Ouch! The jab on my handwriting hurt, but in the interest of the more pressing need of being a quintessential Indian, I decided that we could visit that point later. “If one of them is Jai’, I said rather testily, “the other has to be Veeru!” “Ok”, said the student, in a very flustered voice, “why is that?” Oh my God! This guy has not seen Sholay! A whirlwind of thoughts entered my mind, the most powerful one being “You are getting old, my dear!” Again, in the interest of the nation, I resolutely went ahead and decided to take an impromptu poll on the screen. “Folks, how many of you have seen Sholay?” About 5 per cent of the hands went up.
For me, Sholay is not just a film, it is a pedagogy tool for Economics! In fact, Bollywood has willy-nilly created so many characters and so many epic one-liners that economists do not have to go hunting for any other pedagogy tools at all.
You want to know how schemes are implemented in rural India? How the wheels of commerce are greased? How the local merchant also doubles as moneylender? Just think of Soorma Bhopali in Sholay, played to perfection by Jagdeep. I have often used this character to create the image of a ‘fixer’ in the minds of students.
The concept of collateralised lending is easy to teach in India, thanks to thousands of bad films in which the ‘girvi rakhna’ phenomenon destroys many a family.
What is difficult to teach is the sub-prime crisis. It is unbelievable to the Indian mind that one can default on a housing loan just because rented property is becoming cheap. In India, a housing loan is that sacred commitment to build, not a house, but The Vaastu.
Further, this commitment is taken on by all existing generations in that household. Think of how Vijay in the iconic Deewar buys the very building in which his mother has worked as a labourer; nah, you can see why the subprime crisis could have never happened in India.
Of course, there is another reason too. The RBI would have been understandably super-nervous about such exotic derivatives getting created within its beloved banks, and trading them on Indian markets would be a big no! Think of Sunil Shetty’s pitch in Dhadkan — this was as if written for the RBI.
Alas! I am now wondering whether future students will guffaw with me at the ridiculous Bollywood situations and applications in the classroom. But we must push ahead resolutely, because dil hain ke manta nahi!
The writer is a brave economist trying to laugh against the odds.
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