At the centenary of Frank H. Knight’s Risk, Uncertainty, and Profit, we explore the continuing relevance of Knightian uncertainty to the theory and practice of entrepreneurship. There are three challenges facing such assessment. First, RUP is complex and difficult to interpret. The key but neglected element of RUP is that Knight’s account is not solely about risk and uncertainty as states of nature, but about how an agent’s beliefs about uncertain outcomes and confidence in those beliefs guide their choices. Second, (...) RUP is Knight’s only effort in this area. His subsequent career led elsewhere, so he did not engage with subsequent interpretations of this work. Third, much of the current literature emphasizes that decisions must be different under the two states of nature with a consequent misunderstanding of entrepreneurial agency. This paper addresses each challenge in sequence. First, we explicate Knight’s approach and explain why that approach is murky. Second, as a complement to Knight’s interpretation, we examine Frank P. Ramsey’s approach to subjective probabilities to help clarify Knight’s murky approach. What links Knight and Ramsey is a shared pragmatism about entrepreneurial agency under uncertainty that depends upon the beliefs about, and confidence in, their judgments of possible outcomes. This Knight-Ramsey approach does not require actor’s behaviors to be determined by the class of uncertain environment they face. We focus on the response by the entrepreneur to the existence of uncertainty in all its forms. We argue that this reductive account provides a foundation to examine common problems in management, including managerial hubris, the interaction between entrepreneurs and venture capitalists, and the need for experimentation in advance of new product and venture launches. Third, we critique current literature that favors epistemic purism about the ontology of risk and uncertainty and ignores Knight-Ramsey pragmatism in meeting uncertainty, such as using formal and informal institutions for uncertainty mitigation. Our account locates Frank Knight’s subtleties in entrepreneurial behavior firmly in the literature on entrepreneurial agency a century later. (shrink)

At the centenary of Frank H. Knight’s Risk, Uncertainty, and Profit (1921), we explore the continuing relevance of Knightian uncertainty to the theory and practice of entrepreneurship. There are three challenges facing such assessment. First, RUP is complex and difficult to interpret. The key but neglected element of RUP is that Knight’s account is not solely about risk and uncertainty as states of nature, but about how an agent’s beliefs about uncertain outcomes and confidence in those beliefs guide their choices. (...) Second, RUP is Knight’s only effort in this area. His subsequent career led elsewhere, so he did not engage with subsequent interpretations of this work. Third, much of the current literature emphasizes that decisions must be different under the two states of nature with a consequent misunderstanding of entrepreneurial agency. This paper addresses each challenge in sequence. First, we explicate Knight’s (1921) approach and explain why that approach is murky. Second, as a complement to Knight’s interpretation, we examine Frank P. Ramsey’s approach to subjective probabilities to help clarify Knight’s murky approach. What links Knight and Ramsey is a shared pragmatism about entrepreneurial agency under uncertainty that depends upon the beliefs about, and confidence in, their judgments of possible outcomes. This Knight-Ramsey approach does not require actor’s behaviors to be determined by the class of uncertain environment (whether risk, uncertainty, or ambiguity) they face. We focus on the response by the entrepreneur to the existence of uncertainty in all its forms. We argue that this reductive account provides a foundation to examine common problems in management, including managerial hubris, the interaction between entrepreneurs and venture capitalists, and the need for experimentation (such as prototyping and market research) in advance of new product and venture launches. Third, we critique current literature that favors epistemic purism about the ontology of risk and uncertainty and ignores Knight-Ramsey pragmatism in meeting uncertainty, such as using formal and informal institutions for uncertainty mitigation. Our account locates Frank Knight’s subtleties in entrepreneurial behavior firmly in the literature on entrepreneurial agency a century later. (shrink)

In a recent article, Adam Elga outlines a strategy for “Defeating Dr Evil with Self-Locating Belief”. The strategy relies on an indifference principle that is not up to the task. In general, there are two things to dislike about indifference principles: adopting one normally means confusing risk for uncertainty, and they tend to lead to incoherent views in some ‘paradoxical’ situations. I argue that both kinds of objection can be levelled against Elga’s indifference principle. There are also some difficulties with (...) the concept of evidence that Elga uses, and these create further difficulties for the principle. (shrink)

The normative foundations of the investor centered model of corporate governance, represented in mainstream economics by the nexus-of-contracts view of the firm, have come under attack, mainly by proponents of normative stakeholder theory. We argue that the nexusof- contracts view is static and limited due to its assumption of price-output certainty. We attempt a synthesis of the nexus-of-contracts and the Knightian views, which provides novel insights into the normative adequacy of the investor-centered firm. Implications for scholarship and management practice follow (...) from our discussion. (shrink)

Psychological empirical research has shown that human choice behavior often violates the assumptions of classical rational choice models. In the last few decades a new research field has emerged which aims to account for the observed choice behavior by resorting to the concepts and mathematical techniques developed in the realm of quantum physics, such as the “mental state vector” defined in a Hilbert space and the interference of quantum probability. This article is a short introduction to the quantum-like approach to (...) the description of cognitive processes. I argue that the mathematical apparatus of quantum physics can account for the observed violations of classical logic and can help develop effective models of psychological and cognitive phenomena. This is illustrated through the so-called conjunction and disjunction fallacies by providing an alternative interpretation of the results of Linda test and Hawaii test. No-fallacy configurations are made possible in the quantum-like approach by sequential modeling of mental states transitions. (shrink)

ABSTRACTThe ten essays in this symposium offer a rich and varied set of challenges to the market-democratic research program. Rather than replying to each critic in turn, I respond only to the main lines of critical challenge raised in this collection: that my account of thick economic liberty is too vague, that economic liberties are not basic, that market democracy gives too little attention to socialist possibilities, that market democracy can accommodate only an impoverished conception of fair equality of opportunity, (...) and, most notably, that market democracy is grounded upon a tendentious or “bourgeois” conception of the person. To meet these criticisms, I refine a central claim of market democracy: that the right to private ownership of productive property is a basic right. In response to the worry that market democracy allows for class domination, I revise market democracy on the issue of bequests. After replying to the critics I extend my challenge to social democracy, presenting an historical argument against liberal democratic socialism. (shrink)

Entrepreneurs who start a business to serve both self-interests and collective interests by addressing unmet social and environmental needs are usually referred to as sustainable entrepreneurs. Compared with regular entrepreneurs, we argue that sustainable entrepreneurs face specific challenges when establishing their businesses owing to the discrepancy between the creation and appropriation of private value and social value. We hypothesize that when starting a business, sustainable entrepreneurs (1) feel more hampered by perceived barriers, such as the institutional environment and (2) have (...) a different risk attitude and perception than regular entrepreneurs. We use two waves of the Flash Eurobarometer survey on entrepreneurship (2009 and 2012), which contains information on start-up motivations, start-up barriers, and risk perceptions of approximately 3000 (prospective) business owners across 33 countries. We find that sustainable entrepreneurs indeed perceive more institutional barriers in terms of a lack of financial, administrative, and informational support at business start-up than regular entrepreneurs. Further, no significant differences between sustainable and regular entrepreneurs are found in terms of their risk attitudes or perceived financial risks. However, sustainable entrepreneurs are more likely to fear personal failure than regular entrepreneurs, which is explained by their varied and complex stakeholder relations. These insights may serve as an important signal for both governments and private capital providers in enhancing the institutional climate. (shrink)

My aim in this paper is to develop a unified solution to two paradoxes of bounded rationality. The first is the regress problem that incorporating cognitive bounds into models of rational decisionmaking generates a regress of higher-order decision problems. The second is the problem of rational irrationality: it sometimes seems rational for bounded agents to act irrationally on the basis of rational deliberation. I review two strategies which have been brought to bear on these problems: the way of weakening which (...) responds by weakening rational norms, and the way of indirection which responds by letting the rationality of behavior be determined by the rationality of the deliberative processes which produced it. Then I propose and defend a third way to confront the paradoxes: the way of level separation. (shrink)

Mainstream climate economics takes global warming seriously, but perplexingly concludes that the optimal economic policy is to almost do nothing about it. This conclusion can be traced to just a few “normative” assumptions, over which there exists fundamental disagreement amongst economists. This paper explores two axes of this disagreement. The first axis measures faith in the invisible hand to adjust the natural thermostat. The second axis expresses differences in views on the efficiency and equity implications of climate action. The two (...) axes combined lead to a classification of conflicting approaches in climate economics. The variety of approaches does not imply a post-modern “anything goes”, as the contradictions between climate and capitalism cannot be wished away. (shrink)

Why is common priors are implicit or explicit in the vast majority of the differential information literature in economics and game theory? Why has the economic community been unwilling, in practice, to accept and actually use the idea of truly personal probabilities in much the same way that it did accept the idea of personal utility functions? After all, in, both the utilities and probabilities are derived separately for each decision maker. Why were the utilities accepted as personal, and the (...) probabilities not? (shrink)

This paper studies a generalization of rational choice theory. I briefly review the motivations that Helzner gives for his conditional choice construction . Then, I focus on the important class of conditional choice functions with vacuous second tiers. This class is interesting for both formal and philosophical reasons. I argue that this class makes explicit one of conditional choice’s normative motivations in terms of an account of neutrality advocated within a certain tradition in decision theory. The observations recorded—several of which (...) are generalizations of central results in the standard theory of rational choice—are intended to provide further insight into how conditional choice generalizes the standard account and are offered as additional evidence of the fruitfulness of the conditional choice framework. (shrink)

We provide here a general mathematical framework to model attitudes towards ambiguity which uses the formalism of quantum theory as a “purely mathematical formalism, detached from any physical interpretation”. We show that the quantum-theoretic framework enables modelling of the Ellsberg paradox, but it also successfully applies to more concrete human decision-making tests involving financial, managerial and medical decisions. In particular, we elaborate a mathematical representation of various empirical studies which reveal that attitudes of managers towards uncertainty shift from ambiguity seeking (...) to ambiguity aversion, and viceversa, thus exhibiting hope effects and fear effects. The present framework provides a promising direction towards the development of a unified theory of decisions in the presence of uncertainty. (shrink)

Most decisions in life involve ambiguity, where probabilities can not be meaningfully specified, as much as they involve probabilistic uncertainty. In such conditions, the aspiration to utility maximization may be self-deceptive. We propose “robust satisficing” as an alternative to utility maximizing as the normative standard for rational decision making in such circumstances. Instead of seeking to maximize the expected value, or utility, of a decision outcome, robust satisficing aims to maximize the robustness to uncertainty of a satisfactory outcome. That is, (...) robust satisficing asks, “what is a ‘good enough’ outcome,” and then seeks the option that will produce such an outcome under the widest set of circumstances. We explore the conditions under which robust satisficing is a more appropriate norm for decision making than utility maximizing. (shrink)

We seek an evolutionary explanation for why in some situations humans maintain either optimistic or pessimistic attitudes toward uncertainty and are ignorant to relevant aspects of their environment. Players in strategic games face Knightian uncertainty about opponents’ actions and maximize individually their Choquet expected utility with respect to neo-additive capacities allowing for both an optimistic or pessimistic attitude toward uncertainty as well as ignorance to strategic dependencies. An optimist overweighs good outcomes. A complete ignorant never reacts to opponents’ changes of (...) actions. We focus on sub- and supermodular aggregative games and provide monotone comparative statics w.r.t. optimism/pessimism. With qualifications, we show that in finite populations, optimistic complete ignorance is evolutionary stable and yields a strategic advantage in submodular games with aggregate externalities. Moreover, this evolutionary stable preference leads to Walrasian behavior in these classes of games. (shrink)

A number of business ethics theorist have highlighted the potential for economics to contribute to the advancement of business ethics. In response, this article emphasizes the insights of a particular area of economics that could provide such expansion and development. Subjectivist economics may yet provide an effective analytical framework through which to investigate and evaluate business decision making, and hence the ethics of business. Integrating the concepts of uncertainty, time and imagination, subjectivist economic theory contributes to a greater appreciation of (...) economic choice and behaviour. While such notions are often effectively omitted from modern economic analysis to aid formal representation, business ethicists could utilize such concepts more effectively than their colleagues in economic theory. Significantly, the well-known economists who have championed the insights of subjectivist economics have themselves recommended its extension to an analysis of ethics. (shrink)

A recent trend in economics has been to appeal to evolutionary theory when addressing various open questions in the subject. I here further investigate one particular such appeal to evolutionary biology: the argument that, since markets select firms as coherent units, firms should be seen to be genuine economic agents. To assess this argument, I present a model of firm/office selection in a competitive market, and show that there are cases where markets can select for firms/offices as collective units – (...) and thus, as agents of their own – but also that there are cases where they do not. In this way, I try to make the evolutionary argument for the agency-based view of the firm more precise. (shrink)

Both economists and psychologists are interested in understanding decision making under uncertainty. Yet, they rely on different concepts to analyse human behaviour: economists use economic preference parameters rooted in utility theory, while psychologists use personality traits to describe responses to uncertain situations. Using a large sample of university students, this study examines and contrasts five economic preference parameters and six psychological personality traits that are commonly used to study individuals’ attitudes towards uncertainty. A novelty of this paper is including both (...) the economic concept of ambiguity aversion as well as the personality trait of ambiguity intolerance. We find that standard economic preference measures based on incentivized choice tasks seem to capture rather different characteristics than psychological personality traits. In contrast, economic preference measures obtained from self-assessment questions appear more related to personality traits, especially ambiguity intolerance. (shrink)

In this paper, I consider the recent resurgence of “evolutionary economics”—the idea that evolutionary theory can be very useful to push forward key debates in economics—and assess the extent to which it rests on a plausible foundation. To do this, I first distinguish two ways in which evolutionary theory can, in principle, be brought to bear on an economic problem—namely, evidentially and heuristically—and then apply this distinction to the three major hypotheses that evolutionary economists have come to defend: the implausibility (...) of rational choice theory as an account of economic rationality, the idea that firms are autonomous economic agents, and the need for a more dynamic, less equilibrium-focused economic methodology. In each of these cases, I conclude negatively: the relevant evolutionary considerations neither suggest interesting and novel hypotheses to investigate further nor are backed up by the needed data to constitute genuine evidence. I end by distinguishing this criticism of evolutionary economics from others that have been put forward in the literature: in particular, I make clear that, unlike those of other critics, the arguments of this paper are based on epistemic—not structural—considerations and therefore leave more room for a plausible form of evolutionary economics to come about in the future. (shrink)

I examine the foundations of a just society using the lens of decision theory. The conception of just society is from an individual’s viewpoint: where would I rather live if I have an equal chance of being any individual? Three alternative designs for a just society are examined. These are: laissez-faire, maximin and social minimum. Two assumptions about human nature clarify the distinction among three societies. The first assumption is that a representative individual’s utility function is concave. The second assumption (...) recognizes that redistribution to achieve equality reduces total wealth. A rational individual would prefer a society where one is free to maximize one’s expected utility. A social minimum that includes both the provision of essential human needs and equality of opportunity (education, healthcare, access to capital) for a flourishing life emerges as a candidate solution for the basic structure of society. (shrink)

The works of Knight (1921) and Keynes (1921, 1936) seek to clarify confusion about uncertainty. According to these authors, a precise analysis of uncertainty is required, in order to obtain a clear significance of the concept and understand the consequences for the decision process. Consequently, Knight and Keynes study the content of the decision process in uncertainty and converge towards similar views on the mobilization of confidence. Their works thus go beyond a simple examination of uncertainty, by also throwing light (...) on the role and function of confidence in economic analysis. These works demonstrate that confidence is the prerequisite for individual action under uncertainty. (shrink)

Dual Use Research of Concern constitutes a major challenge for research practice and oversight on the local, national and international level. The situation in Germany is shaped by two partly competing suggestions of how to regulate security-related research: The German Ethics Council, as an independent political advisory body, recommended a series of measures, including national legislation on DURC. Competing with that, the German National Academy of Sciences and the German Research Foundation, as two major professional bodies, presented a strategy which (...) draws on the self-control of science and, inter alia, suggests expanding the scope of research ethics committees to an evaluation of DURC. This situation is taken as an occasion to further discuss the scope and limits of professional self-control with respect to security-related research. The role of RECs as professional bodies of science is particularly analyzed, referring to the theoretical backgrounds of professionalism. Two key sociological features of professionalism – ethical orientation and professional self-control – are discussed with respect to the practice of biomedical science. Both attributes are then analyzed with respect to the assessment of DURC by RECs. In conclusion, it is stated that issues of biosecurity transcend the boundaries of the scientific community and that a more comprehensive strategy should be implemented encompassing both professional self-control and legal oversight. (shrink)

The aim of this contribution is to provide a rather general answer to Hume’s problem. To this end, induction is treated within a straightforward formal paradigm, i.e., several connected levels of abstraction. Within this setting, many concrete models are discussed. On the one hand, models from mathematics, statistics and information science demonstrate how induction might succeed. On the other hand, standard examples from philosophy highlight fundamental difficulties. Thus it transpires that the difference between unbounded and bounded inductive steps is crucial: (...) while unbounded leaps of faith are never justified, there may well be reasonable bounded inductive steps. In this endeavour, the twin concepts of information and probability prove to be indispensable, pinning down the crucial arguments, and, at times, reducing them to calculations. Essentially, a precise study of boundedness settles Goodman’s challenge. Hume’s more profound claim of seemingly inevitable circularity is answered by obviously non-circular hierarchical structures. (shrink)

In theories which contribute to the understanding of uncertainty in entrepreneurial action, scholars have traditionally attributed a negative connotation to uncertainty. This paper seeks to posit an understanding of uncertainty derived from Greek and Indian philosophy, where action of the human agent is not deterred by uncertainty, and rather, occurs despite uncertainty. This idea may be beneficial in making future entrepreneurs less apprehensive about uncertainty, by helping them locate the lessons from philosophy. I look at existing ideas that explore uncertainty (...) in entrepreneurial motivation, and present a multidisciplinary approach which sees uncertainty as a force that increases intent of action, rather than deterring it by drawing on the understanding of consequence and action in Aristotelean thought and Hindu philosophy, and extend the concepts of tuche and karma to posit a theoretical position which sees uncertainty as a factor that encourages entrepreneurial action and motivation. The understanding of uncertainty in management literature has been approached primarily from two disciplinary positions - economics and organisational theory. In economics, the classical understanding of uncertainty which commenced with Frank Knight’s Risk, Uncertainty and Profit (1921), was largely abandoned in later years for a more quantifiable approach of calculating risk. Uncertainty, characteristically nebulous and difficult to grapple with, is unquantifiable. It is defined, in fact, by Knight, as something which cannot be predicted and quantified. Thus, in academics, where almost all disciplines try to make sense of the way the world works, uncertainty has always been a problematic concept. (shrink)

Precautionary Principles are often said to be appropriate for decision-making in contexts of uncertainty such as climate policy. Contexts of uncertainty are contrasted to contexts of risk depending on whether we have probabilities or not. Against this view, I argue that the risk-uncertainty distinction is practically irrelevant. I start by noting that the history of the distinction between risk and uncertainty is more varied than is sometimes assumed. In order to examine the distinction, I unpack the idea of having probabilities, (...) in particular by distinguishing three interpretations of probability: objective, epistemic, and subjective probability. I then claim that if we are concerned with whether we have probabilities at all—regardless of how low their epistemic credentials are—then we almost always have probabilities for policy-making. The reason is that subjective and epistemic probability are the relevant interpretations of probability and we almost always have subjective and epistemic probabilities. In contrast, if we are only concerned with probabilities that have sufficiently high epistemic credentials, then we obviously do not always have probabilities. Climate policy, for example, would then be a case of decision-making under uncertainty. But, so I argue, we should not dismiss probabilities with low epistemic credentials. Rather, when they are the best available probabilities our decision principles should make use of them. And, since they are almost always available, the risk-uncertainty distinction remains irrelevant. (shrink)

The paper argues that substantial support for Soros' claims about uncertainty and reflexivity in economics and human affairs generally are provided by the operation of both factors in the biological domain to produce substantially the same processes which have been recognized by ecologists and evolutionary biologists. In particular predator prey relations have their sources in uncertainty – i.e. the random character of variations, and frequency dependent co-evolution – reflexivity. The paper argues that despite Soros' claims, intentionality is not required to (...) produce these phenomena, and that where it does so, in the human case, it provides no basis to deny a reasonable thesis of the methodological or causal unity of science. The argument for this conclusion is developed by starting with a biological predator/prey relation and successively introducing intentional components without affecting the nature of the process. Accepting the conclusion of this argument provides substantial additional inductive support for Soros' theory in its economic application. (shrink)

Tyler Cowen's “New Austrian” theory of business cycles is based on risk analysis and the assumption of rational expectations. This contrasts with the Old Austrian view, which questions the feasibility of measuring economic risk. Despite Cowen's admirable eclecticism, the way he applies risk analysis to business cycles suffers from serious inconsistencies, and his use of rational expectations is mistaken in the face of economic complexity—a phenomenon that was accurately understood by the traditional Austrians.

This paper provides a model of belief representation in which ambiguity and unambiguity are endogenously distinguished in a purely subjective setting where objects of choices are, as usual, maps from states to consequences. Specifically, I first extend the maxmin expected utility theory and get a representation of beliefs such that the probabilistic beliefs over each ambiguous event are represented by a non-degenerate interval, while the ones over each unambiguous event are represented by a number. I then consider a class of (...) the biseparable preferences. Two representation results are achieved and can be used to identify the unambiguity in the context of the biseparable preferences. Finally a subjective definition of ambiguity is suggested. It provides a choice theoretic foundation for the Knightian distinction between ambiguity and unambiguity. (shrink)

This paper proposes a notion of ambiguity aversion and characterizes it in the context of biseparable preferences, which include many popular ambiguity models in the literature. The defined properties suggest that ambiguity aversion is characterized by the properties of its capacity. This formalizes a sharp distinction between ambiguity and risk aversion, where risk aversion is characterized by the properties of its utility index and its probability weighting function.

Despite the extensive body of literature that aims to explain the phenomenon of consumer scams, the structure of information in scam relationships remains relatively understudied. The purpose of this article is to develop an agency-theoretic approach to the study of information in perpetrator–victim interactions. Drawing a distinction between failures of observation and failures of judgment in the pre-contract phase, we introduce a typology and a set of propositions that explain the severity of adverse selection problems in three classes of scam (...) relationships. Our analysis provides a novel, systematic explanation of the structure of information that facilitates scam victimization, while also enabling critical scrutiny of a core assumption in agency theory regarding contract design. We highlight the role of scam perpetrators as agents who have access to private information and exercise considerable control over the terms and design of scam relationships. Focusing on the consumer scam context, we question a theoretical assumption, largely taken for granted in the agency literature, that contact design is necessarily in the purview of the uninformed principal. (shrink)

Topics in Cognitive Science, Volume 14, Issue 3, Page 451-466, July 2022.

The correct solution to complex problems, such as those involved in international relations, can generally be discovered ex post but not predicted ex ante. Economics and game theory attempt to model such complexity, but have difficulty taking into account psychological subtleties, the myriad factors that each agent considers when making a decision, and cultural differences. And understanding that one is dealing with a system—that is, with interacting factors instead of with insulated monads—may not make the questions any more amenable to (...) prediction, particularly because the more unique an event, the less likely it is to be foreseen. Jervis's analysis of complex systems may therefore be more of a contribution to the historical sciences than to predictive social science. (shrink)

The return rate is considered here as a fuzzy probabilistic set. Then the expected return is obtained as a fuzzy subset in the real line. This result is a theoretical foundation for new investment strategies. All considered strategies result of comparison profit fuzzy index and limit value. In this way we obtain an imprecise investment recommendation. Financial equilibrium criteria are a special case of comparison of the profit index and the limit value. The following criteria are generalized here: the Sharpe's (...) Ratio, the Jensen's Alpha and the Treynor's Ratio. Moreover, the safety-first criteria are generalized here for the fuzzy case. The Roy Criterion, the Kataoka Criterion and the Telser Criterion are also generalized. Obtained results show that proposed theory is useful for the investment applications. (shrink)

This article presents the making of a safe innovation: the application of ice structuring protein (ISP) in edible ices. It argues that safety is not the absence of risk but is an active accomplishment; innovations are not made safe afterward but safe innovations are made. Furthermore, there are multiple safeties to be accomplished in the innovation process. These are financial, public, scientific, and regulatory safety. The negotiations between these safeties determine the material and labeling characteristics of what ISP has become. (...) Not just laboratory researchers but experts from various parts of Unilever, the corporation that produces ISP, participate in accomplishing safety. The safeties they make, interact, overlap, are occasionally in conflict with one another, and continuously connect to outside actors. (shrink)

Recent criticisms of traditional understandings of risk, responsibility and the division of labour between science and politics build on the idea of the co-produced character of the natural and social orders, making a case for less ambitious and more inclusive policy processes, where questions of values and goals may be addressed together with questions of facts and means, causal liabilities and principled responsibilities. Within the neo-liberal political economy, however, the contingency of the world is depicted as a source of unprecedented (...) opportunities for human craftsmanship, rather than of possibly unmanageable surprises. Gene technologies offer a vantage point for reflecting on the consequences of the drift from discovery to invention as a master frame in the appraisal of human intermingling with the world. Biotech patenting regulations carve out a sovereign agency which, by crafting nature, also crafts the distinction between the manufactured and non-manufactured world. Difficulties in ascribing responsibility stem as a consequence. It is likely that politics and economy can be democratized and responsibilities rearranged not by ‘democratizing’ knowledge production, but rather the reverse. (shrink)

This study examines the implications of practical reason for entrepreneurial activities. Our study is based on Thomas Aquinas’ interpretation of such virtue, with a particular focus on the partition of practical reason in potential parts such as synesis, or common sense, and gnome, or perspicacity. Since entrepreneurial acts and actions deal with extremely uncertain situations, we argue that only this perspicacity, as the ability of correctly judging in exceptional cases, has the power to find wisdom under such blurred conditions. Perspicacity (...) frees entrepreneurs from their cognitive schemata rendering them able to be truly entrepreneurial. Based on this vision and thanks to a semantic analysis of the meaning of the Greek word gnome, we construct an interpretative model for entrepreneurial judgment composed of three dimensions, specifically, knowledge-cognitive, external-affective and personal-reflective. The model highlights how a ‘successful’ entrepreneurial judgment is also such from a holistic point of view. (shrink)

When forecasting events, multiple types of uncertainty are often inherently present in the modeling process. Various uncertainty typologies exist, and each type of uncertainty has different implications a scientist might want to convey. In this work, we focus on one type of distinction betweendirect quantitative uncertaintyandindirect qualitative uncertainty. Direct quantitative uncertainty describes uncertainty about facts, numbers, and hypotheses that can be communicated in absolute quantitative forms such as probability distributions or confidence intervals. Indirect qualitative uncertainty describes the quality of knowledge (...) concerning how effectively facts, numbers, or hypotheses represent reality, such as evidence confidence scales proposed by the Intergovernmental Panel on Climate Change. A large body of research demonstrates that both experts and novices have difficulty reasoning with quantitative uncertainty, and visualizations of uncertainty can help with such traditionally challenging concepts. However, the question of if, and how, people may reason with multiple types of uncertainty associated with a forecast remains largely unexplored. In this series of studies, we seek to understand if individuals can integrate indirect uncertainty about how “good” a model is (operationalized as a qualitative expression of forecaster confidence) with quantified uncertainty in a prediction (operationalized as a quantile dotplot visualization of a predicted distribution). Our first study results suggest that participants utilize both direct quantitative uncertainty and indirect qualitative uncertainty when conveyed as quantile dotplots and forecaster confidence. In manipulations where forecasters were less sure about their prediction, participants made more conservative judgments. In our second study, we varied the amount of quantified uncertainty (in the form of the SD of the visualized distributions) to examine how participants’ decisions changed under different combinations of quantified uncertainty (variance) and qualitative uncertainty (low, medium, and high forecaster confidence). The second study results suggest that participants updated their judgments in the direction predicted by both qualitative confidence information (e.g., becoming more conservative when the forecaster confidence is low) and quantitative uncertainty (e.g., becoming more conservative when the variance is increased). Based on the findings from both experiments, we recommend that forecasters present qualitative expressions of model confidence whenever possible alongside quantified uncertainty. (shrink)

This study considers a voting rule wherein each player sincerely votes when he/she has no information about the preferences of the other players. We introduce the concept of rank-dominant strategies to discuss the situation where a player is completely ignorant in the preferences of the other players and decision theoretic justification of the concept. We show that under the plurality voting rule with the equal probability random tie-breaking, sincere voting is always the rank-dominant strategy of each voter. We also discuss (...) other scoring rules and show that sincere voting may not be a rank-dominant strategy of a voter even with the equal probability random tie-breaking. (shrink)

Human germline gene editing is often debated in hypothetical terms: if it were safe and efficient, on what further conditions would it then be ethically acceptable? This paper takes another course. The key question is: how can scientists reduce uncertainty about safety and efficiency to a level that may justify initiation of first-time clinical trials? The only way to proceed is by well-designed preclinical studies. However, what kinds of investigation should preclinical studies include and what specific conditions should they satisfy (...) in order to be considered well-designed? It is argued that multispecies and multigenerational animal studies are needed as well as human embryo editing without implantation. In order to be possible to translate to first-time clinical trials, animal studies need to satisfy strict conditions of validity. Moreover, embryo studies intended for translation to first-time clinical trials need to correspond to the animal studies in experimental design. Only in this way can uncertainty about risk for harm and prospect of benefit in first-time clinical trials be reduced to a modest level. If uncertainty is not reduced to such a level, first-time clinical trials in germline gene editing should not be initiated. (shrink)

Human germline gene editing is often debated in hypothetical terms: if it were safe and efficient, on what further conditions would it then be ethically acceptable? This paper takes another course. The key question is: how can scientists reduce uncertainty about safety and efficiency to a level that may justify initiation of first-time clinical trials? The only way to proceed is by well-designed preclinical studies. However, what kinds of investigation should preclinical studies include and what specific conditions should they satisfy (...) in order to be considered well-designed? It is argued that multispecies and multigenerational animal studies are needed as well as human embryo editing without implantation. In order to be possible to translate to first-time clinical trials, animal studies need to satisfy strict conditions of validity. Moreover, embryo studies intended for translation to first-time clinical trials need to correspond to the animal studies in experimental design. Only in this way can uncertainty about risk for harm and prospect of benefit in first-time clinical trials be reduced to a modest level. If uncertainty is not reduced to such a level, first-time clinical trials in germline gene editing should not be initiated. (shrink)

How can we study bounded rationality? We answer this question by proposing rational task analysis —a systematic approach that prevents experimental researchers from drawing premature conclusions regarding the rationality of agents. RTA is a methodology and perspective that is anchored in the notion of bounded rationality and aids in the unbiased interpretation of results and the design of more conclusive experimental paradigms. RTA focuses on concrete tasks as the primary interface between agents and environments and requires explicating essential task elements, (...) specifying rational norms, and bracketing the range of possible performance, before contrasting various benchmarks with actual performance. After describing RTA’s core components we illustrate its use in three case studies that examine human memory updating, multitasking behavior, and melioration. We discuss RTA’s characteristic elements and limitations by comparing it to related approaches. We conclude that RTA provides a useful tool to render the study of bounded rationality more transparent and less prone to theoretical confusion. (shrink)

We are witnessing a certain tendency in epistemology to account for the anti-luck intuition in terms of risk. I.e., instead of the traditional anti-luck diagnosis of Gettier cases and fake barn cases, a new anti-risk diagnosis seems to be preferable by many. My goal in this paper is twofold: first, I contribute to motivate that drift; and second, I defend that we ought to partially resist it. An anti-risk diagnosis is valid and preferable for fake barn cases, but we still (...) need an anti-luck diagnosis for classic Gettier cases. The paper thus defends the Solomon-like result that we need both concepts—epistemic luck and epistemic risk—to deal with all the cases where knowledge is undermined. (shrink)