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Working Papers | 1987

The Decision Process of Individuals under Conditions of Risk: An Experimental Study

Samir K. Barua and Srinivasan G

Theoretical models in finance are many a time based on unrealistic assumptions about the behaviour of individuals. Empirical validation of the models is expected to vindicate the assumptions. However, in most situations, the approaches used for empirical validations suffer from serious limitations, either because of the nature of data used or because of the testing procedures used. Hence, the doubts about the underlying assumptions on individual behaviour remain unresolved. In this paper, an attempt has been made to study some common beliefs about behaviour of individuals in risky situations, through a controlled experiment. The results indicate that some oft-believed behavioural traits are indeed true, and the theories based on assumptions which are counter to these beliefs, need to be reconsidered.

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Working Papers | 1987

Investigation of Decision Criteria for Investment in Risky Assets

Samir K. Barua and Srinivasan G

This paper examines the empirical validity of stochastic dominance rules and the mean-variance framework by analysing data generated through an experiment on individual investment decisions under uncertainty. The analyses indicated that none of the two approaches provided adequate explanation for the observed pattern of choice. An alternate framework, based on preference for skewness, in addition to mean and variance, was examined. This framework provided a significantly better explanation compared to the two parameter framework. The preference for skewness was significant at higher levels of borrowing and at all levels of wealth.

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Working Papers | 1987

Male and Female Managers in United States and India: A Study of Change Agent Styles Personality Factors and Biographical Differences

Ottaway Richard N and Deepti Bhatnagar

This paper reports results of a study conducted to investigate the differences in male and female managers in America and India. Two samples were used, one male and one female, in each country. The samples were matched cross-culturally for comparability in age, education, and level of management in the company. The Indian data were collected from participants attending management development programmes at the Indian Institute of Management, Ahmedabad. The American data were collected from attendees at MBA programs (evening and weekend further education for practicing managers) in business schools in New Jersey. Three questionnaires were used for data collection. Hall and Williams Change Agent Questionnaire was used to collect data on change style. Personality data was collected on Cattell's Sixteen Personality Factor Questionnaire. The biographical questionnaires collected data on educational level, managerial level, age, salary, area of work, type of industry etc. Analysis of data showed the female managers to be significantly different from the male mangers. These differences were across all the three areas that were inveighed, namely, change agent styles, personality factors, and biographical characteristics. The female mangers used the credibility style of introducing change more often than the male managers. Female managers emerged as more hardworking, achievement-driven, having higher standards, experiencing greater conflict and being more hurting than their male counterparts. Female managers were younger, more educated and less paid than male mangers. A comparison of the American female managers with Indian female managers showed the former to be further behind the salary of male American managers than their Indian counterparts while being comparable in education and job status.

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Working Papers | 1987

Role and Conduct of Monetary Policy

Gupta G S

The paper contains the text of the lecture delivered by the author at a seminar organized by the Department of Economics, M.S.University, Baroda under its UGC Special Assistance Programme during December 20-21, 1986. It highlights the state of the art with regard to the role and conduct of monetary policy, and throws some light on this aspect for India. In particular, it argues that monetary policy is significant not only with regard to the price level and in the long-run, but also with respect to real GNP and in the short-run. Further, it supports whole-heartedly many of the recommendations of the Chakravarty Committee on the way the monetary policy should be conducted in India.

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Working Papers | 1987

Demand for Money: An Empirical Examination of Unsettled Issues for India

Gupta G S

The paper examines the unsettled issues on the demand for money function with a particular reference to India. It uses the annual time series data for the period 1954-55 through 1982-83. A special feature of the study is that it generates a uniform series on the narrow money concept (M1) for the whole sample period, and employs the same for empirical estimation and testing. The principal findings are: a. Both the narrow and wide concepts of money are well explained by the well-known and limited number of arguments in the money demand function. Thus, on this criterion, either definition of money is equally acceptable. b. Permanent income is more relevant than the measured income in the money demand function. c. The ratio of non-agricultural income to agricultural income was found to be irrelevant argument in the money demand function. This, in some sense, argues against the hypothesis of different money demand elasticities with respect to the two components of aggregate incoem. d. Short-term rate of interest has proved to be the relevant interest rate in the money demand function.

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Working Papers | 1987

A Project is a Compound - Not a Mixture: Conceptual Problems in Valuation

Ragunathan V and Srinivasan G

There is considerable literature in the field of finance concerning the valuation of negative cash flows. Consequently, it is widely held that a project should be valued by valuing each component of the project's cash inflows and outflows separately, either by discounting the cash flowing at appropriate RADRs or by using the certainty equivalent approach. This paper discusses the implicit inadequacies in using the above approach for project evaluation and recommends valuing the Net Cash Flow of the project either by using a single RADR or using the certainty equivalent framework.

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Working Papers | 1987

Values, Design and Development of Strategic Organizations

Garg Pulin K and Parikh Indira J

This paper explores the connotations of concepts of social development, Organizations and values in the Indian society. Social Development has so many meanings that no coherent action seems to emerge. The Indian scene, in recent decades, is also animated by an unprecedented effloresce of all varieties of organizations : governmental, non-governmental and private voluntary ones. Some of these are definitely engaged in social development. These organizations tend to operate more as structures held together by leaders with charisma who good, cajole, tempt, reward and punish the organization members for producing outputs and results. A fully functioning organization involves two modalities-the institutional and structural, with their support systems. The institutional modality (representing coherence of philosophy, mission, and direction) requires sentient systems to sustain the process of meaning-making in organization. The structural modality (representing the congruence of concepts of business, strategy goals, etc.) requires management and administrative systems to make organizations functionally effective. In the second section, the paper provides a brief narrative on the values (normative, phenomenological, and existential) that get internalized in organizations through various mechanisms and interfaces. Thereafter, a comparative analysis of the different ethos (Indian and western) at inter-play in Indian organizations is provided. These illustrations highlight the cultural context of Indian organizations wherein both the ethos and the design are neither congruent nor convergent with the values operative in role taking processes. Hence, greater ingenuity, innovativeness and adaptiveness are needed for designing strategic organizations, Particularly for social development. It is necessary to identify the institutions needed to foster the sentient-investment of the community for initiating new organizations. Furthermore, there is a need for creating institutions of debriefing to create a shared, concrete concept of organizational reality in terms of demands and policies. The organizational model being outlined in our paper endeavours to harmoniously blend the value considerations and structural exigencies in the design of developmental organizations.

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Working Papers | 1986

Transient Analysis of Multiple Unit Reliability Systems

Sharma O P, N. Ravichandran, and Dass J

A general Markovian model representing several multiple unit redundant repairable system is proposed and it's transient behaviour is studied. Specifically, for multiple unit reliability system the reliability and availability functions are derived in an explicit form for the transient case. The stationary availability and mean time to system failure are deduced from the main results as special cases.

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Working Papers | 1986

Training Functions in India

Saiyadain M S

This is a state-or-art survey of the training functions in India. Data was collected from 49 organizations varying in size, turnover, product, technology, sector and geographic location. Major findings suggest one-third of the organizations have separate training departments manned by professionally trained managers. In two-third of the cases training functions are manned by those who do not have formal qualification for training functions. The training infrastructure is nominal and a very small portion (.017%) of the total budget of human resources is spent on training. Most organizations identify training needs through appraisal reports. More than two-third organizations have formal induction training, organize in-company training programmes and sponsor many more managers than supervisors and workers to external training programmes. Training feedback is taken seriously by most of the organizations.

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Working Papers | 1986

Contributions to Judgement and Decision

Singh Ramadhar

This paper presents an overview of the theoretical, methodological, and applied contributions that the author's research program on prediction of performance has made to the literature on judgement and decision. It is shown that the rules people employ to combine information about motivation and ability in prediction of performance depend upon nature and difficulty of task as well as age, culture, and role of the judges. Also, subjects have separate initial opinions for cognitively distinct units, and they make imputations about unavailable information. Results from studies of school teachers and managers further disclosed that decision tasks have high construct validity and so they may be useful for selection and training purposes. New directions, for further research in judgment and decision are also discussed.

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