Behavioral Economics

The interview with economist William Baumol, published in 2003 in weekly Respekt, deals with alternative activities for talented individuals. If they can't pursue productive activities (technological innovations) they go for rent-seeking activities or activities with negligible social return (e.g. chess). I also present a thesis, that if there is no sophisticated alternative activities, the talent may be redirected into pathological ones: psychopathy, neurosis, paranoia, psychosis... The article was exhibited in Holland Park, W8 6LU, The Ice House between 18. Oct - (...) 3. Nov. 2013. (shrink)

Exponential discounted utility theory provides the normative standard for future discounting as it is employed throughout the social sciences. Tracing the justification for this standard through economics, philosophy and psychology, I’ll make what I believe is the best case one can for it, showing how a non-arbitrariness assumption and a dominance argument together imply that discounting ought to be exponential. Ultimately, however, I don’t find the case compelling, as I believe it is deeply flawed. Non-exponential temporal discounting is often rational–indeed, (...) the paragon of rationality. If this is correct, it’s an important point when considering policy interventions. Instead of trying to “fix” non-exponetial discounting because it is irrational and associated with negative life outcomes, we might instead focus attention on why the conditions obtain that make such discounting rational. (shrink)

Following Kahneman and Tversky, I examine the term ‘bias’ as it is used to refer to systematic errors. Given the central role of error in this understanding of bias, it is helpful to consider what it is to err and to distinguish different kinds of error. I identify two main kinds of error, examine ethical issues that pertain to the relation of these types of error, and explain their moral significance. Next, I provide a four-level explanatory framework for understanding biases: (...) personal, sub-personal, situational, and systemic levels. Finally, I examine some of the ethical complexities involved in attributing biases to oneself and to others. (shrink)

Since its inception in the late 1970s, behavioural economics has gone from being an outlier to a widely recognized yet still contested subset of the economic sciences. One of the basic arguments in behavioural economics is that a more realistic psychology ought to inform economic theories. While the history of behavioural economics is often portrayed and articulated as spanning no more than a few decades, the practice of utilizing ideas from psychology to rethink theories of economics is over a century (...) old. In the first three decades of the 20th century, several mostly American economists made efforts to refine fundamental economic assumptions by introducing ideas from psychology into economic thinking. In an echo of contemporary discussions in behavioural economics, the ambition of these psychology-keen economists was to strengthen the empirical accuracy of the fundamental assumptions of economic theory. In this article, we trace, examine, and discuss arguments for and against complementing economic theorizing with insights from psychology, as found in economic literature published between 1900 and 1930. The historical analysis sheds light on issues and challenges associated with the endeavour to improve one discipline’s theories by introducing ideas from another, and we argue that these are issues and challenges that behavioural economists continue to face today. (shrink)

The phenomenon of weakness of will – not doing what we perceive as the best action – is not recognized by neoclassical economics due to the axiomatic assumptions of the revealed preference theory (RPT) that people do what is best for them. However, present bias shows that people have different preferences over time. As they cannot be compared by the utility measurements, economists need to normatively decide between selves (short- versus long-term preferences). A problem is that neoclassical economists perceive RPT (...) as value-free and incorporate present bias within the economic framework. The axiomatic assumption that people do what is best for them leads to theoretical and practical dilemmas. This work examines weakness of will to resolve some shortcomings of RPT. The concept of intention is used to provide multiple self conception with the framework to decide between selves, which had not been done before. The paper concludes that individuals should not always follow their revealed preferences (desires) but the intentions (reason) because the latter indicates what people really want. (shrink)

This paper addresses the recent rise of the use of alternative medicine in Western countries. It offers a novel explanation of that phenomenon in terms of cognitive and economic factors related to the free-market and patient-centric approach to medicine that is currently in place in those countries, in contrast to some alternative explanations of this phenomenon. Moreover, the paper addresses this troubling trend in terms of the serious harms associated with the use of alternative medical modalities. The explanatory theory defended (...) here is then predicated on the idea that an extreme patient-centric model of medical practice that treats largely ignorant patients as consumers of medical products and services endowed with an essentially unrestricted power of freedom to choose treatments predictably leads serious and avoidable harms. Some important moral and epistemological consequences of this model are then articulated and corrective measures are suggested. (shrink)

In this paper, I investigate the betting behavior of a decision-maker who can influence the likelihood of the events upon which she is betting. In decision theory, this is best known as a situation of moral hazard. Focusing on a particularly simple case, I sketch the first systematic analysis of moral hazard in the canonical Savage framework. From the results of this analysis, I draw two philosophical conclusions. First, from an observational and a descriptive point of view, there need to (...) be no incompatibility between moral hazard and the Savage framework. This qualifies the incompatibility view, that is ubiquitous in decision theory. Second, in general, moral hazard is not sufficient to overcome the challenges posed by state-dependent utility to the behavioral identification of beliefs. This qualifies the sufficiency view, that is influential in decision theory. These two philosophical conclusions are the main contributions of my paper. (shrink)

Забезпечення енергетичної безпеки України в умовах гібридних загроз.

The European Union (EU) has been experiencing an unprecedented energy crisis for the last 50 years, with severe economic, social and political consequences. Rising energy demand, extreme weather events (unprecedented heat and long winters), disruptions in supply chain and poor regional and global reserves have all contributed to the current energy crisis in the EU. Prices on natural gas in the EU are rising as demand around the world increases. Prices on the gas rose by more than 800 percent year-on-year (...) and prices on the electricity by about 500 percent. Rising prices on gas are due to low stocks in European storage facilities and pressure from Russia, which is trying to speed up the launch of the Nord Stream-2 pipeline. Also in the EU, there is reduction the production of coal and natural gas, reducing the capacity of wind farms. As natural gas plays a significant role in shaping the prices on electricity, electricity has also risen in price. As prices on gas is rose, prices on oil and coal is rose significantly. Demand for energy consumption has also increased due to weather conditions – cold winters and periods of abnormal heat in summer. The largest consumers of gas and electricity in the EU are suffering heavy losses due to rising prices on energy. Industrial giants have begun to cut production, threatening economic recovery. The world economy is recovering from the crisis caused by the coronavirus pandemic, and the EU countries are increasingly in need of energy for industry and the population. An unbalanced transition to renewable energy has become a particular problem for the EU. Calmer weather this year has led to lower energy production using wind turbines. And old European nuclear power plants are gradually being decommissioned. Green energy is not able to cover all needs, so the continent has risen sharply demand on gas. All the above-mentioned problems have certainly affected the further ensure energy security of the EU and require the developing of appropriate mechanisms to overcoming current challenges. (shrink)

Affective forecasting refers to the ability to predict future emotions, a skill that is essential to making decisions on a daily basis. Studies of the concept have determined that individuals are often inaccurate in making such affective forecasts. However, the mechanisms of these errors are not yet clear. In order to better understand why affective forecasting errors occur, this article seeks to trace the theoretical roots of this theory with a focus on its multidisciplinary history. The roots of affective forecasting (...) lie mainly in economics, with early claims positing that utility played a role in decision-making. Furthermore, the philosopher Jeremy Bentham’s descriptions of utilitarianism played a major role in our understanding of whether to define utility as a hedonic quality. The birth of behavioural economics resulted in a paradigm shift, introducing the concept of cognitive biases as influences on the accuracy of predicted utility. Daniel Gilbert and Timothy Wilson, the earliest researchers of affective forecasting errors, have proceeded with the concept of the accuracy of predicted affective utility to conduct experiments that seek to determine why our predictions of future affect are inaccurate and how such errors play a role in our decision-making. (shrink)

While nudging has garnered plenty of interdisciplinary attention, the ethics of applying it to climate policy has been little discussed. However, not all ethical considerations surrounding nudging are straightforward to apply to climate nudges. In this article, we overview the state of the debate on the ethics of nudging and highlight themes that are either specific to or particularly important for climate nudges. These include: the justification of nudges that are not self-regarding; how to account for climate change denialists; transparency; (...) knowing the right or best behaviours; justice concerns; and whether the efficacy of nudges is sufficient for nudges to be justified as a response to the climate crisis. We conclude that climate nudges raise distinct ethical questions that ought to be considered in developing climate nudges. (shrink)

Behavioural economics has taught us that human agents don't always display consistent, context-independent and stable preferences in their choice behaviour. Can we nevertheless do welfare economics...

The entire world community, since 2019, affected by the global pandemic COVID-19. The pandemic caused by this virus, led not only to significant human losses worldwide, but also imposed significant restrictions on the socio-cultural life of the population and radically changed the trends of the global economy and the further functioning of socio-economic systems. Now, huge economic losses have been recorded, which affected almost all sectors of the national economy and the state in the short, medium and long term. However, (...) it is important to consider individual economic development forecasts and measures developed by the governments of the world’s leading countries to overcome the negative effects of the COVID-19 pandemic. This will allow to form a real vision of the possible course of economic processes that will directly affect the living standards of the population and the restoration of socio-economic systems. To further restore the socio-economic system it is necessary to developing modern strategies and forecasts to ensure the effective functioning of economic entities through innovation, digitalization, marketing and use of competitive advantages in the consumer markets in conditions of limited resources, development promising sectors of the national economy, etc. The purpose of writing this scientific monograph is to substantiate the theoretical and methodological foundations, the formation new strategies for restoring socio-economic systems and overcoming the negative consequences of the caused by the COVID-19 pandemic, taking into account changes and challenges in the modern world. The object of the authors’ research is the process of forming new approaches, strategies and mechanisms for managing socio-economic systems in the context of the COVID-19 pandemic, eliminating the negative consequences in the activities of economic entities. The subject of research is socio-economic, organizational and institutional processes of formation and effective implementation of approaches, strategies and mechanisms for managing socio-economic systems; stabilization of the functioning of economic entities; introduction of innovative processes and digital technologies; implementation of best practices in the managing of socio-economic systems using world experience in various sectors of the economy caused by the COVID-19 pandemic. (shrink)

The current economic crisis caused by the COVID-19 pandemic has created new changes and challenges for society, which has led to a deeper identification of pressing problems and to develop strategies and models for overcoming crises in various countries, industries and businesses. The formation and improvement of modern strategies and models of crisis management is impossible without optimizing the resources of economic entities, providing assistance at various levels of government to support priority sectors of the economy, finding additional sources of (...) funding to combat the COVID-19 pandemic. To ensure the effective develop and implementation of modern strategies and models of crisis management it is necessary to have information about the state of economic entities, relevant commodity, raw materials, financial markets, explore the internal and external environment, determine the impact of risks on current activities business entities or industries. The effectiveness of crisis management strategies and models is determined by the ability of the management system to ensure the support of business activity of economic entities in the relevant market and to stimulate effective consumer demand. The purpose of writing this scientific monograph is to substantiate the theoretical and methodological foundations and to form and improve strategies and models of crisis management taking into account new changes and challenges for society related to the COVID-19 pandemic and declining business activity of economic entities. The object of the author’s research was the process of formation and improvement of crisis management strategies and models in the conditions of market imbalance and change of the external environment, reduction of activity volumes of economic entities, growth of budget expenditures to combat the COVID-19, formation of new forms of activities and penetration of information technology into various spheres of life to optimize the negative consequences of a pandemic. The subject of the study were socio-economic, organizational and institutional processes of formation and effective implementation of strategies and models of crisis management in various areas of economic activity; substantiation of mechanisms for ensuring the competitiveness of economic entities and the formation new forms of entrepreneurship; development of modern information technologies; consideration of best practices in business process management and digitalization using world experience in various sectors of the economy caused by the COVID-19. (shrink)

The article examines the process of formation inventory of the enterprise and determines the optimal volume of commodity resources for sale. A generalization of author’s approaches to the formation and evaluation of inventories of the enterprise is carried out. The marketing-logistic approach was applied for the purpose of distribution groups of commodity resources due to the risk of non-fulfillment the order for the supply of goods of the enterprise. In order to ensure an effective process of commodity provision of the (...) enterprises, the costs associated with the formation of inventories are determined. The formalized scheme of the formation commodity provision and the process of optimization inventory of the enterprise is offered. The analysis the structure of the company’s inventory is carried out, the volume of goods turnover is defined, the stocks are grouped for various clustering characteristics. To conduct the study, statistical information was used on commodity resources of the enterprises, statistical methods (grouping, structure analysis, estimation of dynamic series), tools for assessing the efficiency of inventory use, HML-FMR clustering were used. The necessity of using XYZ and ABC analysis is indicated in order to obtain more reliable results and forecast values of the product support of the enterprise. Economic-mathematical modeling is applied and graphically shown the difference in the formation of commodity resources by various features of HML-FMR clustering. The calculations allow the enterprise to determine the optimal amount of commodity resources in accordance with the needs of consumers and their solvent demand, to plan financial resources for the formation of inventories, to develop assortment policy in accordance with demand for products and their implementation. The results of calculations the volume of merchandising of the enterprise, taking into account the HML-FMR clustering affect the formation of final financial performance of the enterprise — income and profits. (shrink)

Before pandemic the world economy had a pre-crisis situation which was characterized by unprecedented imbalances in the global financial and economic system, the lack of growth in world GDP, which posed a real threat to the world economic order. Almost all global analysts predicted a global economic crisis at the end of 2019. For the first time since time immemorial, bank interest rates in all countries have dropped to unprecedented low levels. Often interest rates were 0% or even negative. The (...) EU’s financial system has been so disfigured by the VAT tax that fraud with this tax has reached a scale far exceeding hundreds of billions EUR and in fact got out of control of the authorities. (shrink)

Purpose: To develop proposals on the directions of institutional support for the processes of creativity of the Ukrainian economy. Design/methodology/approach: The analysis of trends in the creativity of the Ukrainian economy is carried out and proposals are developed for conceptualizing institutional support for these processes. The authors set out to develop proposals for institutional support for creativity processes and offer recommendations for systematic updating of Ukrainian legislation in the areas of state regulation of high-tech business. The information base was the (...) information materials of the State Statistics Service of Ukraine, Ministry of Economic Development and Trade of Ukraine, the statistical databases of the European Commission, OECD and World Bank for the period 2014–2020. The research methodology is based on scientific tools that include comparative analysis and economic and mathematical modeling. Findings: Building a national program of public investment in creative development will allow us to systematically approach the issue of institutional support for technological breakthroughs. Research limitations/implications: Recommendations on the development and improvement of legislative instruments of deregulatory policy, harmonization with European standards are substantiated. Directions of systematic updating of legislation on guaranteeing foreign investment of creative projects and targeted investment of joint research projects of academic science and creative organizations are proposed. The implementation will allow a systematic approach to the issue of institutional support for the technological breakthrough of Ukraine. Originality/value: There is a need to step up institutional activities in the field of organizing research centers, introduce targeted investment in the academic science and research activity of creative organizations. (shrink)

Nudging is the idea that people’s decisions should be influenced in predictable, non-coercive ways by making changes to the way that options are presented to them. Central to the debate about nudging is the question of whether it is morally permissible to intentionally nudge others. Libertarian paternalists maintain that this can be the case. In this paper, I present the libertarian paternalistic criteria for the moral permissibility of intentional nudges. Having done this, I motivate two objections. The first one targets (...) the moral permissibility of nudging in general. The second one targets the moral permissibility of only a subset of nudges. After evaluating both of these objections, I conclude that although they are unsuccessful, the evaluation of The Manipulation Objection shows that the libertarian paternalistic criteria for the moral permissibility of intentional nudges fails. I end by suggesting a possible revision to the criteria that avoids the problem, considering its limitations, and providing examples of its applications. (shrink)

Given the endowment effect, the role of attention in decision-making, and the framing effect, most behavioral economists agree that it would be a mistake to accept the satisfaction of revealed preferences as the normative criterion of choice. Some have suggested that what makes agents better off is not the satisfaction of revealed preferences, but ‘true’ preferences, which may not always be observed through choice. While such preferences may appear to be an improvement over revealed preferences, some philosophers of economics have (...) argued that they face insurmountable epistemological, normative, and methodological challenges. This article introduces a new kind of true preference – values-based preferences – that blunts these challenges. Agents express values-based preferences when they choose in a manner that is compatible with a consumption plan grounded in a value commitment that is normative, affective, and stable for the agent who has one. Agents who choose according to their plans are resolute choosers. My claim is that while values-based preferences do not apply to every choice situation, this kind of preference provides a rigorous way for thinking about classic choice situations that have long interested behavioral economists and philosophers of economics, such as ‘Joe-in-the-cafeteria.’. (shrink)

One of the most pervasive criticisms of nudges has been the claim that they violate, undermine or decrease people’s autonomy. This claim, however, is seldom backed up by an explicit and detailed conception of autonomy. In this paper, we aim to do three things. First, we want to clear up some conceptual confusion by distinguishing the different conceptions used by Cass Sunstein and his critics in order to get clear on how they conceive of autonomy. Second, we want to add (...) to the existing discussion by distinguishing between ‘autonomy’ as the ability to set your own ends and ‘autocracy’ as the ability to actually realize those ends. This will allow for a more careful ethical evaluation of specific nudge interventions. Third, we will introduce the idea of ‘perimeters of autonomy’ in an attempt to provide a realistic account of personal autonomy and we will argue that it can alleviate most of the worries about nudging being autonomy-undermining. (shrink)

In this paper, we critically and constructively examine the methodology of evidence-based development economics, which deploys randomized field experiments as its main tool. We describe the...

Today, dramatically increasing economic inequality, imminent climatological calamity, and a global pandemic now place the timeless debate over capitalism into stark relief. Though many seek to pin the blame on capitalism’s excesses, they would do well to recall the historical record of socialism’s deficiencies, namely, stifling innovation, lumbering inefficiency, and stagnation. Fortunately, our moral psychology affords a middle way between these two extremes. For while economic incentives have a tendency to let our civic and prosocial impulses atrophy from disuse, these (...) can also be rekindled when we are faced with highly compelling reasons to think and act for the greater good of all concerned. The coronavirus pandemic now unfolding might well offer us an opportunity to instill a culture of heightened moral self-awareness spurring a more virtuous form of capitalism. (shrink)

Nudging is the idea that people’s decisions and behaviors can be influenced in predictable, non-coercive ways by making small changes to the choice architecture. In this paper, I differentiate between type-1 nudges and type-2 nudges according to the thinking processes involved in each. With this distinction in hand, I present the libertarian paternalistic criteria for the moral permissibility of intentional nudges. Having done this, I motivate an objection to type-1 nudges. According to this objection, type-1 nudges do not appear to (...) be relevantly different than standard cases of manipulation, and manipulation is morally problematic. While I show that this objection fails, I argue that its evaluation raises a different challenge for Libertarian Paternalism. The libertarian paternalistic criteria fails because it ignores the moral distinction that exists between different kinds of nudges. That is, the distinction between what I call ‘counteractive’ and ‘non-counteractive’ nudges. I end by suggesting a revision of the criteria that avoids the problem. (shrink)

John Dewey and Ludwig Wittgenstein offer devastating critiques of the dominant model of human action that each inherited in their own time. Dewey, very early in his philosophical career, ostensibly put the stimulus–response mechanical understanding of action to rest with his “reflex-arc” concept article. Wittgenstein famously redescribed action as moves within language games that interconnect to constitute an interpretively open-ended form of life. In each case, these fundamental insights serve as heuristics, guiding our intellectual activity with regard to understanding our (...) practices, and as reminders in approaching problems. Several scholars have interpreted Dewey and Wittgenstein as allies in a grand project of... (shrink)

Reciprocity is ubiquitous in our lives, both as a way of rewarding and punishing others. Consequently, the social sciences have devoted many studies to this phenomenon. However, the concept of 'reciprocity' is quite polyvalent, and is used in many different ways across different disciplines - a situation potentially prone to equivocation, which hinders fruitful interdisciplinary work. At the same time, although philosophers often invoke 'reciprocity' in their work, there is a lack of conceptual clarification about what reciprocity actually means - (...) an eminently philosophical task. This thesis fills such a gap, by offering a general framework that allows us to understand how 'reciprocity' is used across different sciences. Such a framework consists in a grammar of the 4 uses/meanings of reciprocity: as a kind of exchange, of behaviour, of motivation, and of belief. Moreover, the thesis fills a second gap, regarding the correct interpretation of the psychological role of the reciprocity-motive in economic experiments. There has been a long-standing tradition in economics which overemphasizes the role of inequality aversion and downplays the role of reciprocity. Contrary to this deeply ingrained trend, I argue that reciprocity is the main motive of punishment of free-riders in the public goods game. My argument includes the first systematic critique of an experiment which is currently quite popular in behavioural economics. I show that the latter does not deserve the credit which it has received so far, and thus many economists need to revise their endorsement of inequality aversion. By offering a renewed interpretation of the motives in economic experiments, the thesis highlights reciprocity as a distinctive motivation. The thesis also offers tools to rethink key aspects of economic methodology, and proposes a distinction between prediction, explanation and rationalization of behaviour, in order to achieve psychologically realistic explanations of behaviour. The disciplinary home of the thesis is in philosophy of social science, economics and moral psychology. (shrink)

In 2001 soon after the Asian Crises of 1997-1998, the DotcomBubble, 9/11, the Enron crises triggered a fraud crisis in Wall Street that impacted the market to the core. Since then scandals such as the Lehman Brothers and WorldCom in 2007-2008 and the Great Recession have surpassed it, Enron still remains one of the most important cases of fraudulent accounting. In 2000’s even though the financial industry had become highly regulated, deregulation of the energy industry allowed companies to place bets (...) on future prices. At the peak of the dotcom bubble Enron was named as a star innovator but when the dotcom bubble burst, Enron’s plan to build high speed internet did not flourish and investors started to realize losses. Furthermore, the financial losses of the operations were hid using the market to market accounting technique instead of book value and using special purpose entities to hide debt. The root cause that was identified as a company with a toxic corporate culture focused on officer compensation rather than social responsibility and hence faulty leadership. Is it possible then that; ethical accounting practices, social responsibility and ethics all become inferior goods as income rises in an ‘irrationally exuberant’era? (shrink)

While the history and methodology of laboratory experiments in economics have been extensively studied by philosophers, those of field experiments have not attracted much attention until recently. What is the historical context in which field experiments have been advocated? And what are the methodological rationales for conducting experiments in the field as opposed to in the lab? This article addresses these questions by combining historical and methodological perspectives. In terms of history, we show that the movement toward field experiments in (...) economics has two distinct roots. One is the general orientation of medical and social sciences to evidence-based policy evaluation, which gave rise to randomized field experiments in economics. The other is an awareness of several methodological limitations of lab experiments in economics, which required practitioners to get out of the lab and into the field. In these senses, the movement is a consequence of influences from both outside and inside economics: the general evidence-based trend in policy science and an internal methodological development of experimental economics. In terms of methodology, we show that these two roots resulted in two somewhat different notions of “external validity” as methodological rationales of field experiment. Finally, we suggest that analysis of experiments as exhibits highlights a methodological strategy in which both strands complement each other. (shrink)

In past decades, significant work in behavioural economics has decisively revealed the limitations of the human agency model known as Homo Economicus, whereby humans are purely driven by material self-interest. These behavioural findings are, however, far from integrated in mainstream economic theory, which builds heavily on the neoclassical tradition. Unbeknown to modern economics, Bernard Mandeville and Adam Smith already proposed a richer model of human agency in which choices also depend on the desire for social approbation. The social approbation mechanism (...) complements material self-interest and provides a more diverse toolset, which is able to explain social preferences. Mainstream economic agency confines the study of human action to an artificially-limited spectrum because it reduces society to atomistic individuals who maximise one all-purpose measure of value: utility, which is often instrumented by consumption. Collective action is therefore only sustainable where material incentives are in place, as the economic agent rides for free unless financially penalised. To explain pro-social behaviour from the standpoint of self-interest, Mandeville and Smith proposed that agents also maximise social approbation, which conveys incentives to act pro-socially because the desire for others' approval encourages compliance with social norms. The upshot for collective action is that, assuming social norms represent common interests, approval from others provides an extrinsic motive for pro-social behaviour. I formalise the mechanism by proposing a simple utility function in which agents maximise social approbation as well as material self-interest. (shrink)

Potential of sustainable regional development is studied through demographic, economic, social, socio-cultural and ecological indicators in order to determine the strategy development areas of regional SMART specialisation on the example of Cherkasy oblast (the central region of Ukraine).Cherkasy oblast was selected for the study because it is one of the pilot regions for the implementation of the SMART specialisation strategies. The following methods were used in the course of the study: the system-structure analysis, comparative-geographic method, mapping (GIS – MapInfo Professional, (...) Surfer Golden Software, and program for gravity modelling of the potential field calculation), interpolation, correlation and description-statistical method.The results of the study are intended for national and regional policy-makers, representatives of self-governance, researchers dealing with regional development problems, NGOs, representatives of small and medium business, public activists and others.The proposed results of the study of the sustainable regional development potential in view of SMART specialisation on the example of Cherkassy oblast may be used in the countries of the Eastern Partnership (Belarus, Georgia, Moldova, Azerbaijan, Armenia). (shrink)

The problem of corruption in Ukraine has been examined, as well as Blockchain technology application feasibility in combating the phenomenon has been analyzed in the article. Blockchain instrumental features and properties, making the technology unique and determining its potential applications in many sectors of the economy, have been covered with much attention. The authors have analyzed both advantages and obstacles for a distributed data registry implementation. Analysis of benchmarks and application of the best practices of Blockchain technology in the public (...) sector, including the fiscal process, have been presented in the study. Profound interest in exploring the technology feasibility has been emphasized on the part of the world's leading governments. Information on pilot Blockchain projects in the public sector of Ukraine has been presented. The article focuses on the fact that alongside with the technology area and ways of scaling its application, a new era of digital society development is emerging. (shrink)

There is growing concern that a global economic system fueled predominately by financial incentives may not maximize human flourishing and social welfare externalities. If so, this presents a challenge of how to get economic actors to adopt a more virtuous motivational mindset. Relying on historical, psychological, and philosophical research, we show how such a mindset can be instilled. First, we demonstrate that historically, financial self-interest has never in fact been the only guiding motive behind free markets, but that markets themselves (...) are representations of our individual and collective moral identities. Building on this understanding, we review the research on how economic incentives crowd out virtue-oriented concerns. We then introduce the concept of moral self-awareness (MSA), an evolving mindset informed by reflection on moral identity, namely what one’s actions say about oneself given the impacts on others or society that one’s action may effect. MSA comprises three fundamental aspects of virtue-oriented reasoning: pride, shame, and guilt. Finally, we offer a four-stage model anchored in systems theory, yielding ever more refined motivating strategies for maximizing human flourishing and social welfare externalities. (shrink)

Acceding to the demand that public policy should be based on “the best available evidence” can come at significant moral cost. Important policy questions cannot be addressed using “the best available evidence” as defined by the evidence-based policy paradigm; the paradigm can change the meaning of questions so that they can be addressed using the preferred kind of evidence; and important evidence that does not meet the standard defined by the paradigm can get ignored. We illustrate these problems in three (...) contexts of evidence-based policy. (shrink)

Volume 26, Issue 3, September 2019, Page 177-178.

Авторами розглянуті умови соціалізації споживання коміксів у мікросоціальному масштабі, що дає змогу описати особливості формування та розвитку різноманітних поведінкових моделей попиту на даний продукт сучасної культури. Запропоновано доповнити сегментацію споживачів коміксів такими критеріями як схильність до домінантного формату читання та потенційні умови перегляду домінантного формату читання. Ключові слова: комікс, варіативність моделей споживання, суспільство, постмодернізм, соціальна комунікація. -/- Авторами рассмотрены условия социализации потребления комиксов в микросоциальном масштабе, что позволяет описать особенности формирования и развития разнообразных поведенческих моделей спроса на данный продукт современной (...) культуры. Предложено дополнить сегментацию потребителей комиксов такими критериями как склонность к доминантному формату чтения и потенциальные условия пересмотра доминантного формата чтения. Ключевые слова: комикс, вариативность моделей потребления, общество, постмодернизм, социальная коммуникация. -/- The authors examined the conditions for the socialization of the comics consumption in the micro-social scale, which allows us to describe the characteristics of the formation and development of various behavioral patterns of demand for this product of modern culture. We have proposed to supplement the segmentation of comics consumers with such criteria as the propensity for the dominant reading format and the potential conditions for revising the dominant reading format. Keywords: comics, variability of consumption patterns, society, postmodernism, social communication. (shrink)

One of the explanations for the Great Crisis of 2007-2008 was that financial authorities should have issued stricter regulations to prevent the housing bubble. However, according to Alan Greenspan, President of the Federal Reserve System (FED) from 1987 to 2006, this is to judge with hindsight. No one can guess when a “bubble” begins, nor when it ends; they happen because of the “irrational exuberance” in investors’ behavior, which causes boom and bust cycles. Regulators are not in a better situation (...) for assessing risks, though: since market participants supposedly know their own risks better than the regulator (a kind of informational asymmetry), an intervention (except to ensure law-enforcement) would imply unjustified paternalism. However, a regulator does not have to be conceived as a paternalistic authority. We sketch an objection to Greenspan's argument, arguing that crises don’t require a defective reasoning such as the “irrational exuberance” – our usual bounded rationality might be enough to provide the kind of “self-fulfilling prophecy” observed in the rise and fall of bubble assets value. Given the possibility of grave externalities, authorities are justified in adopting measures to ensure investors behave in a prudent way, even if they supposedly know better their own risks. (shrink)

This paper presents considerations on altruism and prosocial behaviour formulated on the basis of some experiments with the ultimatum game. In the first part it will discuss relations between expected utility theories, the characteristics of homo oeconomicus and a modern understanding of altruism. It will focus in particular on conceptual differences, indicating that we can find more than one definition of altruism in modern literature. The second part of the text will provide an overview of selected behavioural theories of prosocial (...) behaviour. It will also present the manner in which needs, social determinants, norms, and individual psychological features affect the propensity to behave in a prosocial fashion. (shrink)

This article intends to analyze the performance and the efficiency of companies and to identify the key factors that may explain it. It was selected a sample with 15 enterprises: 7 Portuguese and 8 Ukrainian ones, belonging to several industries. Financial and non-financial data was collected for 6 years, during the period of 2009 to 2014. Research questions that guided this work were: Are the enterprises efficient/profitable? What factors influence enterprises’ efficiency/performance? Is there any difference between Ukrainian and Portuguese enterprises’ (...) efficiency/performance, which factors have more influence? Which industrial sector is represented by more efficient/profitable enterprises? The main results showed that in average enterprises were efficient with low level of profitability. According to gained results several indicators were highlighted so that companies would pay more attention to them. (shrink)

Abstract: We examine how trustworthy behaviour can be achieved in the financial sector. The task is to ensure that firms are motivated to pursue long-term interests of customers rather than pursuing short-term profits. Firms’ self-interested pursuit of reputation, combined with regulation, is often not sufficient to ensure that this happens. We argue that trustworthy behaviour requires that at least some actors show a concern for the wellbeing of clients, or a respect for imposed standards, and that the behaviour of these (...) actors is copied in such a way that it becomes a behavioural norm. We briefly suggest what such behavioural norms might need to be if trustworthy behaviour is to be achieved, and consider how they might be supported; we describe the research that is necessary in order to understand these norms in more detail. We argue that the norms of traders are different from the norms of those engaged in other activities, since they are inevitably self-interested, and we consider the risk that traders’ norms might undermine those of other actors. We analyse the task for governance in dealing with this problem, and the role which leadership by a corporate board and management might play in doing this. We describe the need for further research in to describe how this might be done. (shrink)

The article deals with a new financial tool of attracting capital, known as Initial Coin Offering (ICO). In conditions of reduced banking lending and difficult access to finance for SMEs, ICO is viewed to be one of the possible ways to access capital. It considers the main advantages and disadvantages of ICO performance, including its typical features, challenges and regulatory approaches to tax regulation, cybersecurity. The authors of the article determine stages of the ICO mechanism, identifying potential risks and ways (...) to mitigate them, focusing primarily on the need to control and regulate ICO projects. The authors identify the main types of ICO funding, including hybrid and pure funding. The research contains an analysis of ICO trends and their duration for the period of 2013-2017. The capital raised through ICO performance over the period of 2013-2017 is analysed, and determination of the exponential trend line showing the level of its approximation is determined. The study covers the territorial distribution of ICO, in which the top positions regarding the amount of capital raised by ICO are attributed to the USA and EU member states. The existence of ICO regulation in European countries, such as Switzerland and UK, was defined positive in terms of further development of the relevant regulation in the financial market. The article considers the best ICO practices in EU member states. To mitigate risks relating to ICO performance and to increase the level of investment, it would be reasonable to create regulatory rules in every country where cases of ICO performance are reported, based on the practice of the mentioned European countries. The authors give recommendations regarding ICO regulation in Ukraine, taking into consideration the relevant European experience. (shrink)

Currently, under the conditions of permanent financial risks that hamper the sustainable economic growth in the financial sector, the development of evaluation and risk management methods both regulated by Basel II and III and others seem to be of special importance. The reputation risk is one of significant risks affecting reliability and credibility of commercial banks. The importance of reputation risk management and the quality of their assessment remain relevant as the probability of decrease in or loss of business reputation (...) influences the financial results and the degree of customers’, partners’ and stakeholders’ confidence. By means of imitating modeling based on Bayesian Networks and the fuzzy data analysis, the article characterizes the mechanism of reputation risk assessment and possible losses evaluation in banks by plotting normal and lognormal distribution functions. Monte-Carlo simulation is used to calculate the probability of losses caused by reputation risks. The degree of standardized histogram similarity is determined on the basis of the fuzzy data analysis applying Hamming distance method. The tree-like hierarchy based on the OWA-operator is used to aggregate the data with Fishburne's coefficients as the convolution scales. The mechanism takes into account the impact of criteria, such as return on equity, goodwill value, the risk assets ratio, the share of the productive assets in net assets, the efficiency ratio of interest bearing liabilities, the risk ratio of credit operations, the funding ratio and reliability index on the business reputation of the bank. The suggested methods and recommendations might be applied to develop the decision-making mechanism targeted at the implementation of reputation risk management system in commercial banks as well as to optimize risk management technologies. (shrink)

Nudge is a concept of policy intervention that originates in Thaler and Sunstein's (2008) popular eponymous book. Following their own hints, we distinguish three properties of nudge interventions: they redirect individual choices by only slightly altering choice conditions (here nudge 1), they use rationality failures instrumentally (here nudge 2), and they alleviate the unfavourable effects of these failures (here nudge 3). We explore each property in semantic detail and show that no entailment relation holds between them. This calls into question (...) the theoretical unity of nudge, as intended by Thaler and Sunstein and most followers. We eventually recommend pursuing each property separately, both in policy research and at the foundational level. We particularly emphasize the need of reconsidering the respective roles of decision theory and behavioural economics to delineate nudge 2 correctly. The paper differs from most of the literature in focusing on the definitional rather than the normative problems of nudge. (shrink)

The article provides the analysis of the entrance into the innovative activity and organized regulation of interaction which is based on the scientific and technological changes, concentration of production and the feasibility study of administrative decisions, which are dominated by a conglomerate of technical, technological and engineering management decisions. The research formulates the provisions for the productive use of business as the form of economic relations which is based on the entrepreneur function. These provisions are formulated basing on the conditions (...) of efficient division of labour and cooperation. The research singles out a number of systemic positions which allow perceiving logically and distinguishing the production, service and business, to distribute human activities between the groups of occupations and types of service activities. Among these systemic provisions the most efficient is a modelling approach which, when the society enters more complex social and economic stage, transfers the science from the environment of operations with the bulk characteristics into the environment of the analysis of specific sets of coefficients. The logistics of Ukraine’s joining the process of business is associated with the position of the recognition of the primacy of the physical abilities of the person, which should be developed in part in the system of public security and partly in the business environment, commercialization and private capital. Person enters the business environment and habitat as an initiative individual. These indicators are the following: «connections» between the old and the new, between the objects which exist and those which only start to appear and will exist in future; «sources» of development, movement, changes; «mechanism» of development, ways of changing from old to new quality; «direction» of development; «style» of thinking, understanding reality; «essence» of true knowledge; «essence itself» of cognition; «alternativeness» of metaphysics and dialectics. (shrink)

In recent years, several authors advocated neuroscience imperialism, an instance of scientific imperialism whereby neuroscience methods and findings are systematically applied to model and explain phenomena investigated by other disciplines. Calls for neuroscience imperialism target a wide range of disciplines, including psychology, economics, and philosophy. To date, however, neuroscience imperialism has not received detailed attention by philosophers, and the debate concerning its identification and normative assessment is relatively underdeveloped. In this paper, I aim to remedy this situation by making some (...) conceptual distinctions about neuroscience imperialism and by providing a normative assessment of prominent calls in its favour. I shall articulate and defend two interrelated claims that, I argue, undermine prominent calls for neuroscience imperialism. First, the proponents of neuroscience imperialism significantly overstate the evidential and explanatory relevance of neuroscience methods and findings for the disciplines they target. And second, prominent calls for neuroscience imperialism point to an untenable reductionist position, which rests on unsupported empirical and normative presuppositions. To substantiate these two claims, I shall draw on two sets of influential calls for neuroscience imperialism, which respectively target the economic modelling of choice and entrenched philosophical conceptions of free agency. (shrink)

In Southeast Asian countries (SEA), road transport accounts for the main energy consumption and CO2 emission. Air pollution is a major concern in densely populated cities such as Bangkok, Manila, and Kuala Lumpur. The main objective of this paper is to give insights on trends of transport development, car ownership, and CO2 emissions in Southeast Asia. This study also attempts to review the successful transportation policies around the globe and to introduce the possible instruments that can help reduce air pollution (...) in Southeast Asian countries. Economic instruments to estimate the benefits of a cleaner environment due to new policies are introduced as well. The results of this research could help policy makers consider approaches that could internalize external costs of transportation and maximize the societal welfare. (shrink)

Behaviourism is the view that preferences, beliefs, and other mental states in social-scientific theories are nothing but constructs re-describing people's behaviour. Mentalism is the view that they capture real phenomena, on a par with the unobservables in science, such as electrons and electromagnetic fields. While behaviourism has gone out of fashion in psychology, it remains influential in economics, especially in ‘revealed preference’ theory. We defend mentalism in economics, construed as a positive science, and show that it fits best scientific practice. (...) We distinguish mentalism from, and reject, the radical neuroeconomic view that behaviour should be explained in terms of brain processes, as distinct from mental states. (shrink)

We introduce a “reason-based” framework for explaining and predicting individual choices. It captures the idea that a decision-maker focuses on some but not all properties of the options and chooses an option whose motivationally salient properties he/she most prefers. Reason-based explanations allow us to distinguish between two kinds of context-dependent choice: the motivationally salient properties may (i) vary across choice contexts, and (ii) include not only “intrinsic” properties of the options, but also “context-related” properties. Our framework can accommodate boundedly rational (...) and sophisticatedly rational choice. Since properties can be recombined in new ways, it also offers resources for predicting choices in unobserved contexts. (shrink)

Choice experiment (CE) is a questionnaire based method that the accuracy of research questionnaire determines the validity of the research outcomes. Attribute selection has a prime importance in every CE studies. If respondents do not understand or do not have preference for a certain attribute, the attribute non-attendance problem might happen that biases overall results of the research. Qualitative approaches such as literature review, focus group discussion, and in depth discussion commonly applied in CE researches. However, especially in the developing (...) countries context where ethnical and cultural diversity is a challenge in conducting survey based questionnaires, qualitative methods are not sufficient in selecting attributes. Present study investigates the application of relative importance index (RII) in respondents¡¯ preference for attributes in a modal shift study in Klang Valley, Malaysia. The 5 point Likert scale questions were employed to enhance respondents¡¯ preferences for initial 24 selected attributes. The results of this study showed that from 24 pre-selected attributes, only 18 of them had RII>0.5 and could be included in the final CE design. The results of this study could help researchers to control for unobserved problems in selecting the attributes which could not be discovered through qualitative approaches. -/- . (shrink)