NIFT UG 2013 Question Paper with solutions

  Economists, ethicists and business sages persuadeus that honesty is the best policy, but their evidenceis weak. We hoped to find data that would supporttheir theories and thus, perhaps encourage higherstandards of business behaviour. To our surprise,our pet theories failed to stand up. Treachery, wefound, can pay. There is no compelling economicreason to tell the truth or keep one’s wordpunishment for the treacherous in the real world isneither swift nor sure. Honesty is, in fact, primarily a moral choice. Business people do tell themselves that, in the long run, they will do well by doing good. But there is little factual or logical basis for this conviction. Without values, without a basic preference for right over wrong, trust based on such self-delusion would crumble in the face of temptation. Most of us choose virtue because we want to believe in ourselves and have others’ respect and belief in us. And for this, we should be happy. We can be proud of a system in which people are honest because they want to be, not because they have to be. Materially, too, trust based on morality provides great advantages. It allows us to join in great and exciting enterprises that we could never undertake if we relied on economic incentives alone. Economists tell us that trust is enforced in the market place through retaliation of reputation. If you violate a trust, your victim is apt to seek revenge and others are likely to stop doing business with you, at least under favourable terms. A man or woman with a reputation for fair dealing will prosper. Therefore, profit maximizers are honest. This sounds plausible enough until you look for concrete examples. Cases that apparently demonstrate the awful consequences of trust turn out to be few and weak, while evidence that treachery can pay seems compelling.