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Working Papers | 1997

An Elementary Proof in Rational Choice Theory Revisited

Lahiri Somdeb

In this paper we prove a result which, apart from having independent interest, has found applications in recent mathematical economic literature of rational choice theory. The result states that if a two-dimensional demand function satisfies budget exhaustion, the Weak Axiom of Revealed Preference and its range contains the strictly positive orthant of two dimensional Euclidean space, then it is representable by an utility function which is upper semicontinuous on the non-negative orthant of two dimensional Euclidean space and strictly quasi-concave and strictly monotonically increasing on the strictly positive orthant of two dimensional Euclidean space. By strictly monotonically increasing on the strictly positive orthant of two dimensional Euclidean space we mean that if a strictly positive vector is semi-strictly greater than another vector in the non-negative orthant of two dimensional Euclidean space, then the former has greater utility than the latter.

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Working Papers | 1997

The Competitiveness Connundrum: Literature Review and Reflections

Chaudhari Shekhar and Ray Sougata

The concept of competitiveness has been studied by researchers from a variety of perspectives using different methodologies. Though there is a large volume of literature on the subject, there seems to be a dearth of systematic reviews of the extant literature. This paper is an attempt in that direction. It presents a classificatory scheme using two dimensions – level of analysis (nation, industry and firm) and types of variables used to explain and measure competitiveness. The implicit and explicit research questions addressed and issues related to definition, measurement and sources of competitiveness at various levels are also discussed. It is suggested that given its complexity and electic approach combining different schools of thought and using multiple measurement schemes would be appropriate for doing research on competitiveness.

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Working Papers | 1997

Linear and Non-Linear Budget Sets

Lahiri Somdeb

In this paper we show that every choice problem in a finite-dimensional Euclidean space can be viewed as the budget set corresponding to an economic environment (possibly non-linear) in consumer choice theory.

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Working Papers | 1997

Need for Back-up in Box Solar Cooker

Girja Sharan

Systematic efforts to promote box solar cookers in Gujarat (India) began in 1979. Gujarat is characterised by high insolaiton, high ambient temperatures, clear sky and in most parts, sever shortage of fuel-wood. In short, a region with high potential for use of cooker. In addition it has good entrepreneurial climate, an added positive feature. Yet, only about 35,000 units have so far been sold and sales are levelling off. The first-purchase-volume curve, often used by market research professionals to study product life cycle, indicates that cooker is past maturity and is in decline. Significant improvement would be essential for further diffusion. A survey of users in and around Ahmedabad city indicated that they would like the present cooker made less vulnerable to climatic factors. Conjoint analysis indicated two other features desired-doneness indicator, and stainless steel vessels. In this paper we present an analysis of back-up required in Ahmedabad region, which can make the cooker less vulnerable to climate.

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Working Papers | 1997

Working Capital Management in Sri Lanka

Pandey I M and Perera K L W

The study provides an empirical evidence of working capital management policy and practices of the private sector manufacturing companies in Sri Lanka. The information and data for the study were gathered through questionnaires and interviews with chief financial officers of a sample of manufacturing companies listed on the Colombo Stock Exchange. The main conclusions of the study are summarised below: · Most companies in Sri Lanka have informal working capital policy. The managing director plays a major role in formulating formal or informal policy. Company size has an influence on the overall working capital policy (formal or informal) and approach (conservative, moderate or aggressive) and review period. · Finance manager is the responsible for managing working capital components. Stretching of credit payment and ageing schedule are the primary tools of managing disbursement float and controlling debtors respectively. Material requirement planning (MRP) and perpetual inventory control (PIC) system are key techniques of inventory management. Company profitability and working capital policy influence the payable management and working capital finance respectively. Most of the companies take cash discounts, but their annual cost of working capital funds is high that ranges between 15-20%. · Current and cash budget are major techniques of working capital, planning and control. Company profitability has an influence on the methods of working capital planning and control. Companies sometimes consider working capital changes when they evaluate capital budgeting. Most of the companies in this study use bank interest rate as a hurdle rate for evaluating the working capital changes. · A comparison of the working capital practices of the Sri Lankan companies with the USA companies reveals a lot for similarities. The basic difference is in terms of the use of computerised system and the opportunity to invest surplus cash in the money market instruments.

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Working Papers | 1997

Human Development in India: A Macro Perspective

Chaudhari Shekhar and Kumar Sunil

During the 1950s and 60s the concept of development ignored the social dimension. However, during the last three decades several new concepts have emerged concerning “development” at the national and the global levels. Today the human factor is a central concern in “development”. This paper discusses some key aspects of the process of Human Factor Development (HFD) in India with a focus on the post independence period and identifies important influencing factors. We have analyzed HFD in the paper on the basis of four dimensions; (a) standards of living, (b) skill formation and knowledge acquisition, (c) utilization of skill and knowledge, (d) human values and ethics. Our analysis suggests that HFD in India has two disturbing trends. Firstly, it seems that actions by professionals and political leaders of the country are not governed by ethical and moral considerations. Secondly, a very small proportion of the country's population possesses sophisticated knowledge and skills. Moreover, these people are trained at the country's premier institutions at high cost to the society. But, their knowledge and skills are not being properly utilised and the country continues to have a high incidence of poverty, child labour, and illiteracy. Synchronised efforts are required from the academia, policy planners, political and religious leaders of the country to achieve the desired economic growth and development by concentrating on HFD.

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Working Papers | 1997

A Reconsideration of Some Properties of Solutions for Two Dimensional Choice Problems

Lahiri Somdeb

In this paper, we take up the outstanding problem of axiomatically characterizing what we have referred to in the paper as the additive choice function on the classical domain for choice problems. Apart from an impossibility result for the additive choice function, there is an axiomatic characterization, which as a by-product provides a counter example to a conjecture for the egalitarian choice function. In an appendix, we provide a proof of an axiomatic characterization of the egalitarian choice function using a superadditivity axiom. Further we show several non-rationalizability properties of utilitarian consistent solutions. In this paper, we also provide proofs of axiomatic characterizations of the family of non-symmetric Nash choice functions and the family of weighted hierarchies of choice functions. Our conclusion is that earlier axiomatizations are essentially preserved on the classical domain for choice problems. the proofs are significant in being non-trivial and very dissimilar to existing proofs on other domains.

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Working Papers | 1996

The Focal Faculties of the Firm: Using Knowledge Power for Global Leadership

Thomas P S and T. Madhavan

There is indubitably more to the sources of sustained competitive advantage of corporations than meets the eye. Among the most promising of these are the focal faculties of the firm, the areas of expertise ingrained in organizations over long periods of time. If properly developed and managed these focal faculties can be mixed and matched, both internally as well as externally, to pioneer promising lines of business that can sustain the firm from one generation to the next. Previously many firms succeeded by combining the best features of the family, the school and the military which minimizing bureaucratic proclivities. In future, firms may also have to adopt the recognized strengths of the collegiate approach, fundamental to which is knowledge creation, dissemination and use in a truly democratic manner. What a firm produces will always be important. Increasingly, what it knows will be even more important. This knowledge will basically be about its environment, about itself and about creative strategies which combine the two for success over the long term. If crystallized meaningfully into focal faculties, the foregoing knowledge may help the firm not only to perform well currently but also to adapt to changing circumstances and to seize the opportunities which appear from time to time on distant horizons.

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Working Papers | 1996

Axiomatic Characterization of Solutions for Rationing Problems

Lahiri Somdeb

Situations abound in the real world, where aggregate demand for a commodity exceeds aggregate supply. When such situations of excess demand occur, what is required is some kind of rationing. The literature on rationing problems has an interesting origin in the Babylonian Talmud. The purpose of this paper is to characterize axiomatically and analyze some Talmudic Solutions for rationing problems.

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Working Papers | 1996

Rethinking Policy Options for Watershed Management by Local Communities: Combining Equity, Efficiency and Ecological - Economic Viability

Anil K. Gupta

The policy environment for management of land-use in India has been quite mud-died. Part of the reason is lack of accountability among senior level public administrators, policy planners and various constituents of the existing institutions who decided not to complain even when institutions strayed away from their goals. In this paper, I argue for certain basic re-thinking in the policy options for viable watershed management by combing local knowledge with the formal science through rejuvenated or revitalized traditional institutions. In part one, I review the policy environment in the light of some of the recent reports in India which have a major bearing on watershed development programs. I argue that natural scientists have committed a fundamental error when they assumed that major challenge in watershed management was transfer of technology instead of development of technology on people's lands and in their neighborhoods. Given the ecological heterogeneity evident to soil scientists and people working in these regions, there was no way standard solutions could have been replicated over large areas. The need for action research in generating viable options through collaborative thinking is necessary. Various other weaknesses of the existing programs are identified in this section. In part two, I discuss the theory of portfolio options which can provide an effective alternative to the current approaches to watershed management. I also suggest that people's knowledge about biodiversity, historical land-use and various conservation measures needs to be supplemented with modern science and technology in an experimental manner so that limits of both the knowledge system – formal and informal become opportunities for innovation rather than constraints. In part three, I discuss various policy changes in research, public administration, decentralized system of self governance, and interface with voluntary organizations and people's institutions. I conclude that large scale efforts in restoration of productivity of eroded regions have to be appreciated without ignoring the fact that spreading resources thinly may give political advantage but would not generate any durable change in the resource management situation.

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