According to the local risk-neutrality theorem an agent who has the opportunity to invest in an uncertain asset does not buy it or sell it short iff its expected value is equal to its price, independently of the agent's attitude towards risk. Contrary to that it is shown that, in the context of expected utility theory with differentiable vNM utility function, but without the assumption of stochastic constant returns to scale, nondegenerate intervals of no-trade prices may exist. With (...) a quasiconcave expected utility function they do if, and only if, the agent is risk averse of order one. (shrink)

The existing literature on savings, insurance, and portfolio choices under risk has revealed that quite often comparative statics results depend, among other things, upon the values of the coefficients of relative risk aversion and relative prudence. More specifically the benchmark values for these coefficients are, respectively, one and two. Recently, several papers investigated constraints on the higher degree extensions of the coefficients of relative risk aversion and of relative prudence. The present work provides a unified (...) approach to this question based on the concept of elementary correlation increasing transformations, allowing for a better understanding of changes in risk in the multiplicative case. (shrink)

In this paper, we consider the composition of an optimal portfolio made of two dependent risky assets. The investor is first assumed to be a risk-averse expected utility maximizer, and we recover the existing conditions under which all these investors hold at least some percentage of their portfolio in one of the assets. Then, we assume that the decision maker is not only risk-averse, but also prudent and we obtain new minimum demand conditions as well as intuitively appealing (...) interpretations for them. Finally, we consider the general case of investor’s preferences exhibiting risk apportionment of any order and we derive the corresponding minimum demand conditions. As a byproduct, we obtain conditions such that an investor holds either a positive quantity of one of the assets or a proportion greater than 50 %. (shrink)

I focus my discussion on the well-known Ellsberg paradox. I find good normative reasons for incorporating non-precise belief, as represented by sets of probabilities, in an Ellsberg decision model. This amounts to forgoing the completeness axiom of expected utility theory. Provided that probability sets are interpreted as genuinely indeterminate belief, such a model can moreover make the “Ellsberg choices” rationally permissible. Without some further element to the story, however, the model does not explain how an agent may come to have (...) unique preferences for each of the Ellsberg options. Levi holds that the extra element amounts to innocuous secondary “risk” or security considerations that are used to break ties when more than one option is rationally permissible. While I think a lexical choice rule of this kind is very plausible, I argue that it involves a greater break with xpected utility theory than mere violation of the ordering axiom. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Second GuessingAnonymous OneThis is difficult for me to write because I have tremendous respect for every doctor that has been involved in my son’s care. I firmly believe that they chose and administered the highest level of care that they assessed as appropriate; that they cared for him both personally and professionally as if he were their own child; and that he was in the care of acknowledged giants (...) in their fields. I write this knowing that I will share this narrative with these doctors, in order that they can better understand the decisions I was faced with and the guilt I must live with feeling that I may not have made the best possible informed choice for my son, because of this trust and relationship.Let me describe my oncologist. I say “my” instead of my son’s whose doctor he really is, because he is mine too in every sense of the word. He cares passionately about his work and about my son specifically; he engenders my trust because he is compassionate, brilliant, and available to me for concerns both great and small. His accomplishments have saved lives and will continue to impact his field. He became the narrow bridge I walk, that is the only thing between me and dangerous water and rocks waiting below; the balancing bar on the tightrope that is the only thing that stands to keep me from falling into the abyss and breaking my neck. And this made it difficult for me to disagree with him and seek a second opinion. Because his unspoken words were, “Don’t you trust me that I will do the best for your child?” and I could not answer then what I would answer now, “Nobody is infallible and sometimes we may miss something that someone else can see despite how much we know or care.”It is ironic, I think, that sometimes a layperson, because of her limited knowledge, can see more clearly where a professional may not.My son was diagnosed at age six with Grade II ependymoma in 2006. He was treated with surgery, a complete resection, and then 33 rounds of conformal radiation. He recurred in 2012, and was diagnosed with anaplastic ependymoma Grade III. He had another surgery, with the same surgeons, who pronounced it another successful total resection. This is where my story begins.The MRI taken the next day showed a sliver of something there. My oncologist, much sought after for his diagnostic abilities in reading MRI’s showed slight concern that it may be residual tumor, but both the surgeons and the MRI report came back negative, identifying the sliver as inflammation. Six [End Page 9] weeks later, 3 days before we were scheduled to leave out of town to receive proton beam radiation, I insisted on another MRI. The sliver was enlarged from the post–op MRI. My oncologist said it was tumor; one surgeon said it was inflammation and the other surgeon abstained from speculation. The MRI report stated it appeared to be recurrent tumor.Now here was my dilemma as a parent. The prognosis today of radiation on residual tumor for ependymomas is very bad, especially with a residual tumor of his size. On the other hand, my oncologist felt that going in for surgery with no guarantee of a total resection anyway, was incurring a risk of damage to my child that may impact severely on his quality of life.My oncologist felt that for many medical reasons, inherent risks of surgery, uncertainty about status of the scan reading, quality versus quantity of life, and—I think—an understandably pessimistic view of the possibility of cure for recurrent anaplastic grade III ependymoma, he was against another surgery, and opted to continue with radiation with the tumor as is.I am part of two support groups on line, one for parents of children with any type of brain tumor and the other specific for ependymoma parents. The clinical and anecdotal knowledge of these groups as a whole is phenomenal because, unfortunately, we have parents who have experienced and researched almost everything about this illness, in all its stages. When I was faced... (shrink)

Critical race theorists and standpoint epistemologists argue that agents who are members of dominant social groups are often in a state of ignorance about the extent of their social dominance, where this ignorance is explained by these agents' membership in a socially dominant group (e.g., Mills 2007). To illustrate this claim bluntly, it is argued: 1) that many white men do not know the extent of their social dominance, 2) that they remain ignorant as to the extent of their dominant (...) social position even where this information is freely attainable, and 3) that this ignorance is due in part to the fact that they are white men. We argue that on Buchak's (2010, 2013) model of risk averse instrumental rationality, ignorance of one's privileges can be rational. This argument yields a new account of elite-group ignorance, why it may occur, and how it might be alleviated. (shrink)

In his paper, ‘Patients, doctors and risk attitudes’, Makins argues that doctors, when choosing a treatment for their patient, need to follow their risk profile.1 He presents a pair of fictitious diseases facing a patient who either has ‘exemplitis’, which requires no treatment or ‘caseopathy’, which is severe and disabling and for which there is a treatment with unpleasant side effects. The doctor needs to decide whether the patient should pursue the unpleasant treatment, just in case he has (...) caseopathy. Makins believes that rational-choice theory is a productive way to approach this problem. This theory frames all decisions as gambles. Each possible gamble (eg, not to pursue treatment) leads, probabilistically, to a set of outcomes (life with no disease and no side effects, but also, possibly, life with a disabling disease, since no treatment is taken). Utilities of these outcomes and probabilities that they will happen are combined to yield a number—expected utility. One is supposed to gamble—to make a choice—in a way that maximises this expected utility. Makins takes this framework for granted and is focused on an additional complication, the patient’s risk preference. He believes that, in his hypothetical example, even if expected utility were exactly the same, withholding treatment …. (shrink)

Fishburn and Vickson showed that, when applied to random alternatives with an equal mean, 3rd-degree and decreasing absolute risk aversion stochastic dominances represent equivalent rules. The present paper generalizes this result to higher degrees. Specifically, higher-degree stochastic dominance rules and common preference by all decision makers with decreasing higher-order absolute risk aversion are shown to coincide under appropriate constraints on the respective moments of the random variables to be compared.

Future-bias is the preference, all else being equal, for negatively valenced events be located in the past rather than the future, and positively valenced ones to be located in the future rather than the past. Strong risk aversion is the preference to pay some cost to mitigate the badness of the worst outcome. People who are both strongly risk averse and future-biased can face a series of choices that will guarantee them more pain, for no compensating benefit: (...) they will be pain pumped. Thus, combining these preferences is rationally impermissible. Dougherty (2011) argues that this gives us reason to think that future-bias is rationally impermissible. This argument, and a similar one presented by Greene and Sullivan (2015), relies on the idea that if several preferences are not rationally combinable, then in the absence of some explanation of why they are not combinable, we should conclude that (at least) one of them is rationally impermissible. We take up this question by, inter alia, reflecting on the empirical results of a study we ran that probes people’s risk averse and future-biased preferences. We argue that the data, in conjunction with other considerations, suggests that we should not infer from the irrationality of the combination of these preferences to the irrationality of one of the preferences singly. We also argue that given the descriptive data about these preferences, there is no reason to think that, if one of them is rationally impermissible, then it is future-bias. (shrink)

Can it be rational to be risk-averse? It seems plausible that the answer is yes—that normative decision theory should accommodate risk aversion. But there is a seemingly compelling class of arguments against our most promising methods of doing so. These long-run arguments point out that, in practice, each decision an agent makes is just one in a very long sequence of such decisions. Given this form of dynamic choice situation, and the (Strong) Law of Large Numbers, they (...) conclude that those theories which accommodate risk aversion end up delivering the same verdicts as risk-neutral theories in nearly all practical cases. If so, why not just accept a simpler, risk-neutral theory? The resulting practical verdicts seem to be much the same. In this paper, I show that these arguments do not in fact condemn those risk-aversion-accommodating theories. Risk aversion can indeed survive the long run. (shrink)

Food safety and food quality are two closely related aspects of the food management system. The difference between the two is that one keeps consumers safe while the other keeps consumers satisfied. This study examined the differences in how consumers value food safety and food quality with a focus on the influence of loss aversion on one’s psychological level and of income effect on one’s socio-demographic level. Our findings indicate that loss aversion and income effect significantly influence the (...) way consumers value food safety vs. quality labels when considering potential health risks and food price. High risk-averse and low-income consumers with strong loss aversion and a weak income effect show a higher demand for food safety labels as a way to ensure easy access to safety indications. Low risk-averse and high-income consumers with weak loss aversion and a strong income effect show a higher demand for food quality labels because they hope to gain more health benefits from high-quality food at good prices. This study provides insights that will assist public authorities and food industry in balancing food safety control and food quality improvement in order to meet the heterogeneous market demand changing alongside the transition of China’s food consumption and production. (shrink)

In a recent article entitled “Putting Risk in its Proper Place,” Eeckhoudt and Schlesinger (2006) established a theorem linking the sign of the n-th derivative of an agent’s utility function to her preferences among pairs of simple lotteries. We characterize these lotteries and show that, in a given pair, they only differ by their moments of order greater than or equal to n. When the n-th derivative of the utility function is positive (negative) and n is odd (even), (...) the agent prefers a lottery with higher (lower) n + 2p-th moments for p belonging to the set of positive integers. This result links the preference for disaggregation of risks across states of nature to the complete structure of moments preferred by mixed risk averse agents. It can be viewed as a generalization of a proposition appearing in Ekern (1980) which focused only on the differences in the n-th moments. (shrink)

We consider a situation where an individual is facing an uncertain situation, but may costly alter his knowledge of the uncertainties. We study in this context how risk aversion may modify the individual search behavior. We consider a one-armed bandit problem (where one arm is safe and the other is risky) and study how the agent risk aversion can change the sequence of arms selected. The main result is that when the utility function is more concave, (...) the agent has more chances to select the safe arm. We also discuss how search is affected by risk aversion. (shrink)

According to the orthodox treatment of risk preferences in decision theory, they are to be explained in terms of the agent's desires about concrete outcomes. The orthodoxy has been criticised both for conflating two types of attitudes and for committing agents to attitudes that do not seem rationally required. To avoid these problems, it has been suggested that an agent's attitudes to risk should be captured by a risk function that is independent of her utility and probability (...) functions. The main problem with that approach is that it suggests that attitudes to risk are wholly distinct from people's (non-instrumental) desires. To overcome this problem, we develop a framework where an agent's utility function is defined over chance propositions (i.e., propositions describing objective probability distributions) as well as ordinary (non-chance) ones, and argue that one should explain different risk attitudes in terms of different forms of the utility function over such propositions. (shrink)

We consider a situation where an individual is facing an uncertain situation, but may costly alter his knowledge of the uncertainties. We study in this context how risk aversion may modify the individual search behavior. We consider a one-armed bandit problem (where one arm is safe and the other is risky) and study how the agent risk aversion can change the sequence of arms selected. The main result is that when the utility function is more concave, (...) the agent has more chances to select the safe arm. We also discuss how search is affected by risk aversion. (shrink)

In bargaining environments with uncertain disagreement or “impasse” outcomes (e.g., litigation or labor strike outcomes), there is an identification problem that confounds data interpretation. Specifically, the minimally acceptable settlement value from a risk-averse (risk-loving) but unbiased-belief bargainer is empirically indistinguishable from what one could get with risk-neutrality and pessimistically (optimistically) biased beliefs. This article reports results from a controlled bargaining experiment where data on both risk attitude and beliefs under uncertainty are generated in order to (...) assess their relative importance in bargaining experiment outcomes. The average lab subject is risk-averse, yet optimistic with respect to uncertainty, which is consistent with existing studies that examine each in isolation. I also find that the effects of optimism dominate those of risk-aversion. Optimistic bargainers are significantly more likely to dispute and have aggressive final bargaining positions. Dispute rates are not statistically affected by risk attitude, but there is some evidence that risk aversion leads to a weakened bargaining position. Though additional research is needed to understand the limits of extending these results, a key implication follows. In uncertainty environments where optimism dominates, increased settlement rates are more likely achieved by minimizing impasse uncertainty (to limit the potential for optimism) rather than maximizing uncertainty (to weaken the reservation point of risk-averse bargainers), as has been argued in the dispute resolution literature. (shrink)

Two key questions of normative decision theory are: 1) whether the probabilities relevant to decision theory are evidential or causal; and 2) whether agents should be risk-neutral, and so maximise the expected value of the outcome, or instead risk-averse (or otherwise sensitive to risk). These questions are typically thought to be independent---that our answer to one bears little on our answer to the other. But there is a surprising argument that they are not. In this paper, I (...) show that evidential decision theory implies risk neutrality, at least in moral decision-making and at least on plausible empirical assumptions. Take any risk-aversion-accommodating decision theory, apply it using the probabilities prescribed by evidential decision theory, and every verdict of moral betterness you reach will match those of expected value theory. (shrink)

Various experimental procedures aimed at measuring individual risk aversion involve a list of pairs of alternative prospects. We first study the widely used method by Holt and Laury :1644–1655, 2002), for which we find that the removal of some items from the lists yields a systematic decrease in risk aversion and scrambles the ranking of individuals by risk aversion. This bias, that we call embedding bias, is quite distinct from other confounds that have been (...) previously observed in the use of the HL method. It may be related to empirical phenomena and theoretical developments where better prospects increase risk aversion. Nevertheless, we also find that the more recent elicitation method due to Abdellaoui et al., also based on lists but using only one and the same probability in the list, does not display any statistically significant bias when the corresponding items of the list are removed. Our results suggest that methods other than the popular HL one may be preferable for the measurement of risk aversion. (shrink)

Most research on risk aversion in behavioral science with human subjects has focused on a component of risk aversion that does not adapt itself to context. More recently, studies have explored risk aversion adaptation to changing circumstances in sequential decision-making tasks. It is an open question whether one can identify evidence, at the single subject level, for such risk aversion adaptation. We conducted a behavioral experiment on human subjects, using a sequential decision (...) making task. We developed a model-based approach for estimating the adaptation of risk-taking behavior with single-trial resolution by modelling a subject’s goals and internal representation of task contingencies. Using this model-based approach, we estimated the subject-specific adaptation of risk aversion depending on the current task context. We found striking inter-subject variations in the adaptation of risk-taking behavior. We show that these differences can be explained by differences in subjects’ internal representations of task contingencies and goals. We discuss that the proposed approach can be adapted to a wide range of experimental paradigms and be used to analyze behavioral measures other than risk aversion. (shrink)

Bernhard and Young (Journal of Academic Ethics, 7, 175-191, 2009) allege that a myth of confidentiality plagues research in North America because of the absence of statute-based legal protections and the requirements of some REBs to limit confidentiality to the extent permitted by law. In this commentary we describe statute-based protections for research confidentiality available in the United States, clarify the legal situation regarding research confidentiality in Canada, and explain that REBs that require confidentiality to be limited by law are (...) imposing a doctrine that is not required by the TCPS and may violate researchers’ academic freedom. The paper laments how excessive REB risk aversion and inaction by the granting agency Presidents has created a situation where some REBs are encouraging researchers to download research risks to research participants and forcing researchers to choose between exposing themselves to the prospect of going to jail to protect confidentiality, watering down their research objectives, or conducting vanilla research rather than engaging in controversial and/or sensitive areas of study. The paper urges the granting agency Presidents to seek legislative change to protect research participants who provide information that could cause them harm if their identity were to be revealed. (shrink)

Evidence of risk aversion in laboratory settings over small stakes leads to a priori implausible levels of risk aversion over large stakes under certain assumptions. One core assumption in statements of this calibration puzzle is that small-stakes risk aversion is observed over all levels of wealth, or over a â sufficiently largeâ range of wealth. Although this assumption is viewed as self-evident from the vast experimental literature showing risk aversion over laboratory stakes, (...) it actually requires that lab wealth be varied for a given subject as one evaluates the risk attitudes of the subject. We consider evidence from a simple design that tests this assumption, and find that the assumption is strikingly rejected for a large sample of subjects from a population of college students. We conclude that the implausible predictions that flow from these assumptions do not apply to one specialized population widely used to study economic behavior in laboratory experiments. (shrink)

In this paper, we use the risk apportionment technique of Eeckhoudt, Rey and Schlesinger (2007) to study higher order risk preferences for others’ health as well as ex-ante and ex-post inequality preferences for social risky distributions, and their interaction. In an experiment on a sample of university students acting as impartial spectators, we observe risk aversion towards social health losses and a dislike of ex-ante inequality. In addition, evidence for ex-post inequality seeking is much weaker (...) than evidence for ex-ante inequality aversion. Because ex-ante inequality aversion is unrelated to risk aversion, we conclude that simple forms of utilitarianism are not relevant for individual judgment of social risk over health. Last, our investigation of precautionary distribution, which would occur when one particular group in the society suffers from background health risk, shows substantial polarization of preferences. (shrink)

A usual argument in finance refers to no arbitrage opportunities for the positivity of the bid-ask spread. Here we follow the decision theory approach and show that if positivity of the bid-ask spread is identified with strong risk aversion for an expected utility market-maker, this is no longer true for a rank-dependent expected utility one. For such a decision-maker only a very weak form of risk aversion is required, a result which seems more in accordance with (...) his actual behavior. We conclude by showing that the no-trade interval result of Dow and Werlang (1992a) remains valid for a rank-dependent expected utility market-maker merely exhibiting this weak form of risk aversion. (shrink)

A central point of debate over environmental policies concerns how future costs and benefits should be assessed. The most commonly used method for assessing the value of future costs and benefits is economic discounting. One often-cited justification for discounting is uncertainty. More specifically, it is risk aversion coupled with the expectation that future prospects are more risky. In this paper I argue that there are at least two reasons for disputing the use of risk aversion as (...) a justification for discounting when dealing with longterm decisions, one technical and one ethical. Firstly, I argue that technically, it implies an inconsistency between theory and practice. And secondly, I argue that discounting for uncertainty relies on a form of individualism which, while reasonable in standard microeconomic theory where an agent chooses how to spread her own consumption over her own lifetime, is inappropriate in the context of intergenerational social decisions. (shrink)

The present note first discusses the concept of s-convex pain functions in decision theory. Then, the economic behavior of an agent with such a pain function is represented through the comparison of some recursive lotteries.

In her excellent and comprehensive article, Friesen argues that utilising personal responsibility in healthcare is problematic in several ways: it is difficult to ascribe responsibility to behaviour; there is a risk of prejudice and bias in deciding which behaviours a person should be held responsible for; it may be ineffective at reducing health costs. In this short commentary, I will elaborate the critique of personal responsibility in health but suggest one way in which it could be used ethically. In (...) doing so, I will introduce the concepts of reasonable risk and golden opportunity. I previously argued that it is both difficult to disentangle responsibility and that we risk prejudice and bias in singling out behaviours that are socially disapproved of.1 So I am sympathetic to Friesen’s concerns. I also discussed another way in which ascribing personal responsibility for health is problematic which Friesen does not discuss and which, in my view, is the most concerning and further supports her arguments. It represents a back door assault on liberalism and neutrality towards concepts of the good life. Even if one were to accurately and in an unbiased way divine the personal contribution to disease, the greatest problem would remain: those who voluntarily take on risk would be penalised. That is, such a system would be risk-averse. Those lives which avoided risk would be prioritised, while those who chose to take on risky activities in their conception of the good life would be penalised. Yet risk is necessary, both for the good life, and social progress. Columbus, Edmund Hilary, Florence Nightingale, Ernest Hemingway and countless monumental figures in human history took risks in order to achieve something great. Should we aim for a society of trembling, teetotalling health nuts? Surely that prospect is horrific. It is horrific because it elevates health …. (shrink)

A decision maker bets on the outcomes of a sequence of coin-tossings. At the beginning of the game the decision maker can choose one of two coins to play the game. This initial choice is irreversible. The coins can be biased and the player is uncertain about the nature of one (or possibly both) coin(s). If the player is an expected-utility maximizer, her choice of the coin will depend on different elements: the nature of the game (namely, whether she can (...) observe the outcomes of the previous tosses before making her next decision), her utility function, the prior distribution on the bias of the coin. We will show that even a risk averter might optimally choose a riskier coin when learning is allowed. We will express most of our results in the language of stochastic orderings, allowing comparisons that are valid for large classes of utility functions. (shrink)

By means of minimal assumptions on the individual preferences, I show that the Willingness To Pay (WTP) for both a FSD and SSD reduction of risk is the sum of a mean effect, a pure risk effect and a wealth effect. As a result, the WTP of a risk-averse decision maker may be lower than the WTP of a risk-neutral one, for a large class of individual preferences’ representation and a large class of risks.

This study extends experimental tests of (cumulative) prospect theory (PT) over prospects with more than three outcomes and tests second-order stochastic dominance principles (Levy and Levy, Management Science 48:1334–1349, 2002; Baucells and Heukamp, Management Science 52:1409–1423, 2006). It considers choice behavior of people facing prospects of three different types: gain prospects (losing is not possible), loss prospects (gaining is not possible), and mixed prospects (both gaining and losing are possible). The data supports the distinction of risk behavior into (...) these three categories of prospects, Further, probability weighting and diminishing sensitivity of utility as predicted by PT are observed. Loss aversion is, however, less pronounced, except for choices where one prospect is degenerate. The data suggests that the probability of losing may be relevant for loss aversion. (shrink)

Using a large sample of retail investors as well as experimental data we find that risk and ambiguity aversion are positively correlated. We provide evidence that a common link is decision mode: intuitive thinkers tolerate more risk and ambiguity than effortful reasoners. One interpretation is that intuitive thinking confers an advantage in risky or ambiguous situations. We present supporting lab and field evidence that intuitive thinkers outperform others in uncertain environments. Finally, we find that risk and (...) ambiguity aversion vary with individual characteristics and wealth. The wealthy are less risk averse but more ambiguity averse, which has implications for financial puzzles. (shrink)

After the three families divided up the state of Jin and the Tian family took over Qi, the political situation in the fourth century B.C.E. appeared even more chaotic. Wei conquered Chu's Luyang and Qin's Xihe, Qin defeated Wei at Shimen , and again at Shaoliang , and Wei moved its capital to Daliang. During the mid-Warring States period, Qin became dominant in the west, Qi in the east, Chu in the south, and Wei in the center. Rapid changes occurred (...) one after another; trickery and conflict were rampant. However, the shi , the intelligentsia, actually managed to expand their spheres of existence and activity accordingly in this state of tension between countries, states, and men. A few major states assembled quite a number of literati; and those men of the villages, who had in earlier times merely waited passively for opportunities to fall into their laps, crisscrossed the various feudal states; literati who previously had no cause to use military force became, one by one, the honored guests of the feudal lords. With the breakdown of the previously simple and obvious order, the gradually dismantling of the common body of the ancestral clan of the past, and the increasing complexities of social relationships after the dissolution of blood ties, social order became a matter of concern. Or, to reword this most practical issue: How could this universally chaotic society go from disorder to order? (shrink)

This article presents a characterization of higher-order risk preferences such as prudence or temperance in terms of statistical moments. Our results, which are generalizations of Roger :27–44, 2011) and Ekern, 329–333, 1980), give a better understanding of how higher-order risk preferences relate to skewness preference and kurtosis aversion. While they are not based on expected utility theory, an implication within that theory is that all commonly used utility functions exhibit skewness preference and kurtosis aversion.

Makins1 formulates a deference principle which states that patients’ attitudes towards the health outcomes associated with different treatment options should drive decision-making and not physicians’ attitudes towards these health outcomes. Although this deference principle is widely agreed on, it is less obvious which role patients’ risk attitudes should play. Makins takes patients’ attitudes towards health outcomes to be sufficiently analogous to patients’ risk attitudes in order to extend his deference principle. His extended deference principle states that patients’ (...) attitudes towards the health outcomes and risks associated with different treatment options should drive decision-making and not physicians’ attitudes towards these health outcomes and risks. This extension is not only taken to be ethically preferable, but also practically realisable as one can reliably trace patients’ (risk) attitudes. Problematic situations arise when patients exhibit risk attitudes they do not reflexively endorse. For instance, patients might systematically make more risky choices than they think they should make. In response to these kinds of situations, Makins proposes to revise his deference …. (shrink)

A growing number of decision theorists have, in recent years, defended the view that rationality is permissive under risk: Different rational agents may be more or less risk-averse or risk-inclined. This can result in them making different choices under risk even if they value outcomes in exactly the same way. One pressing question that arises once we grant such permissiveness is what attitude to risk we should implement when choosing on behalf of other people. Are (...) we permitted to implement any of the rationally permissible risk attitudes, is there some specific risk attitude that is required when choosing for others, or are we required to defer to the risk attitudes of the people on whose behalf we are choosing? This article elaborates on this question, explains its wider practical and theoretical significance, provides an overview of existing answers, and explores how to go about providing a more systematic account of how to choose on behalf of others in risky contexts. (shrink)

The unsafe behavior of construction workers is one of the most important and direct causes of safety accidents. Managers usually develop effective incentives aimed at regulating worker safety behavior. Due to the large number of workers in construction projects, there are multiple differences in fairness preference, risk preference and ability level, which will lead to the complex effect of the traditional mechanism to regulate workers’ safety behavior. In order to improve the effectiveness of incentive measures for worker safety (...) behavior, this paper takes into account the multiple differences of individual workers’ fairness preference, risk preference and ability level, based on the tournament mechanism to construct a competition incentive model. By designing a tournament reward and salary distribution for heterogeneous workers, the occurrence of unsafe behaviors can be reduced. The study found that in terms of the optimal level of safety investment, workers with risk aversion attitude generally invest higher than that of workers with risk preference, no matter whether they have a strong fairness preference or not; In terms of the distribution of tournament rewards, workers with a risk aversion attitude and a higher level of fairness preference need to be given higher incentives. (shrink)

The trolley problem, first described by Foot (1967) and Thomson (The Monist, 59, 204–217, 1976), is one of the most famous and influential thought experiments in deontological ethics. The general story is that a runaway trolley is threatening the lives of five people. Doing nothing will result in the death of those persons, but acting in order to save those persons would unavoidably result in the death of another, sixth person. It appears that, depending on the situation, we have (...) different moral judgments about the permissibility of action. We will review and systematize all the proposals in the literature of the past 35 years that have attempted to grasp our moral intuitions in a simple deontological principle. In particular, seventeen proposals will be classified: six algorithmic, seven psychological, and four other invalid accounts. This review and classification sheds light on some subtle differences and clarify a few issues. (shrink)

In Bayesian epistemology, the problem of the priors is this: How should we set our credences (or degrees of belief) in the absence of evidence? That is, how should we set our prior or initial credences, the credences with which we begin our credal life? David Lewis liked to call an agent at the beginning of her credal journey a superbaby. The problem of the priors asks for the norms that govern these superbabies. -/- The Principle of Indifference gives a (...) very restrictive answer. It demands that such an agent divide her credences equally over all possibilities. That is, according to the Principle of Indifference, only one initial credence function is permissible, namely, the uniform distribution. In this paper, we offer a novel argument for the Principle of Indifference. I call it the Argument from Accuracy. (shrink)

Daniel Ellsberg presented in Ellsberg (The Quarterly Journal of Economics 75:643–669, 1961) various examples questioning the thesis that decision making under uncertainty can be reduced to decision making under risk. These examples constitute one of the main challenges to the received view on the foundations of decision theory offered by Leonard Savage in Savage (1972). Craig Fox and Amos Tversky have, nevertheless, offered an indirect defense of Savage. They provided in Fox and Tversky (1995) an explanation of Ellsberg’s two-color (...) problem in terms of a psychological effect: ambiguity aversion . The ‘comparative ignorance’ hypothesis articulates how this effect works and explains why it is important to an understanding of the typical pattern of responses associated with Ellsberg’s two-color problem. In the first part of this article we challenge Fox and Tversky’s explanation. We present first an experiment that extends Ellsberg’s two-color problem where certain predictions of the comparative ignorance hypothesis are not confirmed. In addition the hypothesis seems unable to explain how the subjects resolve trade-offs between security and expected pay-off when vagueness is present. Ellsberg offered an explanation of the typical behavior elicited by his examples in terms of these trade-offs and in section three we offer a model of Ellsberg’s trade-offs. The model takes seriously the role of imprecise probabilities in explaining Ellsberg’s phenomenon. The so-called three-color problem was also considered in Fox and Tversky (1995). We argue that Fox and Tversky’s analysis of this case breaks a symmetry with their analysis of the two-color problem. We propose a unified treatment of both problems and we present a experiment that confirms our hypothesis. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Surprised DivideAnonymous OneAnonymous OneNot long after our daughter was born, my wife and I were expecting a son. We were busy new parents, so her pregnancy with our second child went by quickly and without a lot of the fuss that a first pregnancy brings. To our surprise, our son was born a few weeks early but aside from a little jaundice he was a happy, healthy baby.My parents (...) were caring for our daughter while we were at the hospital. After my son's birth, we were excited for them to bring our daughter up to the hospital to visit her new baby brother. The hospital photographer came by and took photos of our two kids together and photos of our son swaddled and sleeping soundly in a basket. Other family members stopped by to meet the new baby as well. It was a happy time.Little did we know that a couple of hours later we would be faced with a communication breakdown. My wife and I usually pride ourselves on how well we are able to communicate and plan our future.I grew up heavily Catholic, attending parochial schools through high school graduation. Meanwhile, my wife's family are Unitarian Universalists. You could not have two more polar opposite religions! We are used to having different points of view. We have always talked through many of life's choices and have both had to make compromises in order to have a successful relationship. It was on that happy day of my son's birth that we discovered we forgot to discuss one important topic.As our family was gathered in my wife's hospital room, joyfully celebrating the newest addition, the doctor entered the room to check on my wife and said it was time to do the circumcision if we wanted.Without hesitation, I responded in the affirmative, then the doctor and I looked over at my wife, who was staring at us with saddened, conflicted eyes. I was confused. Didn't she want the same thing for our son that I did? Surprisingly we never discussed this decision, at least not that I remember. I don't recall her ever telling me she was against it.My wife stated that she wasn't prepared to make a decision because she didn't know what our son would want and she was worried about him experiencing pain. She worked hard for 9 months to grow this baby boy, and he was so little. I understood her anguish in the thought of letting someone alter his tiny body.I am circumcised myself. My background provided me guidance and an expectation that this would be happening, so it was a nonissue for me. I never considered a scenario in which my son would not be circumcised. In truth, it felt ridiculous to even contemplate not circumcising him. My words of reassurance that it would be fine and my explanation to my wife that this was just one of the many decisions we would need to make for him and our other child did little to settle her.It was clear that no one (including me) had discussed this with my wife prior to this point, which was unfortunate. The doctor described the process and tried to reassure my wife that it was a safe and minor procedure. This still left my wife in a conflicted state. The other men in my family there visiting at the time chimed in to reassure my wife that this is what our son would want. She reluctantly agreed to the circumcision, giving in to peer pressure I suppose. I'm confident that an alliance of circumcised men telling her that our son would also want to be circumcised is what swayed her. Frankly, I'm glad they happened to be there when the doctor stopped by to help back up my position.But while our son was out of the room undergoing his procedure, my wife remained conflicted and saddened. We were both surprised at each other's response. My opinion on this was coming from the position of expectation and tradition, while she was worried about not knowing... (shrink)

In this paper, we analyse higher-order risky choices by the representative cumulative prospect theory (CPT) decision maker from three alternative reference points. These are the status quo, average payout and maxmin. The choice tasks we consider in our analysis include binary risks, and are the ones employed in the experimental literature on higher order risk preferences. We demonstrate that the choices made by the representative subject depend on the reference point. If the reference point is the status (...) quo and the lottery choices exhibit symmetric risk, we demonstrate that there is no third order reflection effect of lottery choices but there is a fourth order reflection effect. When the average payout is the reference point, we demonstrate that any third or fourth order lottery choice is possible dependent upon the lottery payoffs. However, under the assumption of maxmin reference point, the risky choices are prudent and temperate. In addition to these results, our analysis reveals that the representative CPT subject can choose combinations of second with third and fourth order risky options that differ from those in other major models of decision under risk. We contrast our theoretical predictions with the empirical results reported in the literature on higher order risk preferences and are able to reconcile some conflicting experimental evidence. (shrink)

Second or higher order probabilities have commonly been viewed with scepticism by those working within the realm of probability and decision theory. The aim of the present note is to show how the notion of second order probabilities can add to our understanding of judgmental and decision processes and how the traditional framework of Bayesian decision theory can be extended in a fruitful way by taking such entities into account. Section one consists of a brief account of arguments (...) put forth against higher order probabilities as well as of counterarguments. In order to provide an example of the applicability of second order probabilities a decision theory encompassing such probabilities will be presented in section two. In section three I will try to emphasize the value of second order probabilities for a deeper and more complete understanding of the notion of risk. (shrink)

Recent social policy discourses in Aotearoa New Zealand focus on vulnerable children’s well-being and the detrimental, long-term and costly impacts of child poverty. The discourse pervading much of the policy labels children and young people as ‘vulnerable’ or ‘at risk’ or ‘in crisis’, a view, which we argue, is both disempowering and marginalising. We propose a shift in focus which views children and young people as agentic, capable and competent. Drawing on several small-scale research projects and reports we demonstrate (...) how, when asked, children and young people can participate effectively in discussions about policy matters that concern them. We have much to learn from the insights children share with us when asked, but very often existing structures, at both government and community level, do not include adequate processes to hear their voices, let alone act on what has been communicated. (shrink)

The human body has come to be seen as forever susceptible to both external and internal hazards, which in many circumstances require immediate, heroic, and expensive intervention. In response to this, there has been a shift from a treatment‐based healthcare model to one of prevention wherein nurses play an integral role by identifying and assessing risks for individuals, communities, and populations. This paper uses Deborah Lupton’s outline of the spectrum of risk and applies the theoretical works of Foucault and (...) Plato to demonstrate the means by which nurses maintain social order by identifying and counselling risk takers. It also utilizes the work of Deleuze and Guattari to illustrate how Plato’s framework for creating social order through the creation of the good citizen can be viewed as a micro‐fascist system, which has been adopted wholeheartedly by preventative health professionals. The goal of this paper is to present an alternate understanding of risk to provide nurses and other healthcare professionals with a non‐traditional appreciation of certain aspects of their practice as researchers and clinicians. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Martin Heidegger and OntologyEmmanuel Levinas (bio)The prestige of Martin Heidegger 1 and the influence of his thought on German philosophy marks both a new phase and one of the high points of the phenomenological movement. Caught unawares, the traditional establishment is obliged to clarify its position on this new teaching which casts a spell over youth and which, overstepping the bounds of permissibility, is already in vogue. For once, (...) Fame has picked one who deserves it and, for that matter, one who is still living. Anyone who has studied philosophy cannot, when confronted by Heidegger’s work, fail to recognize how the originality and force of his achievements, stemming from genius, are combined with an attentive, painstaking, and close working-out of the argument—with that craftsmanship of the patient artisan in which phenomenologists take such pride. In this study, it is important for us to understand, above all, the true intentions of our author, to illuminate what he thinks really needs to be said, and to surmise what is most critical for him.To get to the heart of Heidegger’s system, it seems fitting to begin with a problem that is generally familiar. We choose the problem of knowledge, a deeper understanding of which takes us to the very threshold of Heidegger’s thought. For this problem, central to modern philosophy, is one of the main obstacles of modern philosophy that Heidegger wishes to surmount. Neo-Kantianism, which takes knowledge as the philosophical problem of the first rank, is the movement against which Heidegger rebels with all his strength. We have, thus, every chance of gaining access to his thought by the main door, so to speak. Once inside the system we will try to trace its outlines, 2 reserving, for a second part of our work, the determination of Heidegger’s place in the history of ideas, especially in the phenomenological movement, as well as of his relations with the philosopher to whom he owes so much—Edmund Husserl. 31In its most general form, the problem of the theory of knowledge has a critical significance. It consists in delineating a domain where knowledge can be certain and in determining the criteria for the legitimate scope of knowledge. But this problem, as normal and as simple as it may appear, has deeper roots. That knowledge should need a criterion at all presupposes that truth is not identical to all that is known and that the course [End Page 11] of things can fail to correspond with the course of thought. “How does knowledge correspond to being?” is a more profound formulation of the problem of knowledge.But we are not going to touch anymore on the primordial phenomenon that generates the problem. The problem of correspondence between thing and thought presupposes a free activity of thought and its isolation in relation to the object. It is precisely this presupposition which renders their harmony and even their contact problematic. “How does the subject take leave of itself to attain the object?” is what the problem of knowledge, in the last analysis, boils down to. Its true source is thus the concept of “subject” as elaborated by modern philosophy. The cogito presided over the subject’s birth. The cogito was the affirmation of the privileged nature of the subject’s immanent sphere, of its unique place in existence; hence, the cogito was the specificity of the subject’s connection to the rest of reality, the sui generis nature which opens up the passage from immanence to transcendence, the passage from ideas contained in the thinking substance to 4 their “formal existence.”The concept of the subject, understood as a substance having a specific position in the entire domain of being, presents us with difficulties of two kinds. First, how do we understand this leave-taking from the self which the thinking substance brings about and which displays an entirely original aspect? Indeed, we could say that thought, in reaching out toward objects, does not actually take leave of itself, since its objects—considered as ideas and contents of thought—are, in a certain sense, already within it. In order to make sense of this paradox, Descartes... (shrink)

A moderately risk averse person may turn down a 50/50 gamble that either results in her winning $200 or losing $100. Such behaviour seems rational if, for instance, the pain of losing $100 is felt more strongly than the joy of winning $200. The aim of this paper is to examine an influential argument that some have interpreted as showing that such moderate risk aversion is irrational. After presenting an axiomatic argument that I take to be the (...) strongest case for the claim that moderate risk aversion is irrational, I show that it essentially depends on an assumption that those who think that risk aversion can be rational should be skeptical of. Hence, I conclude that risk aversion need not be irrational. (shrink)

Nicholas Makins makes a valuable contribution to the literature on medical decision-making, highlighting the role that risk attitudes play in deliberation and subsequently arguing that, in medical choices under uncertainty, if considerations of autonomy and beneficence support deference to patient values and outcome preferences then they also support deference to patients’ attitudes to risk.1 Crucially, however, Makins suggests that it is not simply first-order risk attitudes that are the appropriate target of deference but, rather, patients’ higher- (...) class='Hi'>order risk attitudes. In other words, Makins argues that if considerations of autonomy and beneficence support deference in medical decision-making, this deference should include the risk attitudes that individuals desire to have or reflectively endorse. This commentary draws out a morally relevant and overlooked distinction between: (1) deferring to patients’ higher-order attitudes that endorse the first-order risk attitudes they currently hold. and (2) deferring to patients’ higher-order attitudes that endorse risk attitudes that are at odds with the first-order risk attitudes they currently hold (which equates to a higher-order desire to change one’s first-order risk-attitudes). I agree with Makins that if respect for autonomy and beneficence support deference to patient preferences, then these considerations may also support deference to at least some higher-order risk attitudes, namely, those of type (1). But I think that whether they support deference to those of type (2) is less clear. In particular, it does not …. (shrink)

A new cosmopolitan world order founded on peace-related diversity of human expressions is likely to strengthen the weaker individual. Such order remains nevertheless meritocratic because it would contribute to materialize enhanced equality between individuals belonging to human groups of different strengths with respect to access to power, wealth or popularity. Therefore, in comparison to existing orders, it would arguably create a better basis for freedom and solidarity as well as for peace between human groups, including states. The originality (...) of this theory rests on three pillars. First and foremost, it is built upon the diversity of human expressions in connection with peace as elements which arguably determine directly or indirectely the contents of all legal, social or moral norms. Secondly, it provides the foundation for a new cosmopolitan system promoting moderation against “groupism” that does not require any decision making by unanimity, majority or diktat, but can be implemented by any individual vis-à-vis any other individuals and human groups without any form of institution. Third, this theory relies on a consistency test between an imaginary situation under a veil of ignorance about group affiliations on the one hand and a situation referring to a specific historical reality on the other hand. The coherence test is conditioned by the fear of belonging to the weaker human groups which should procure a universal validity to it by relying on average risk aversion of human beings. The comparison between these two positions shall allow for a verification of consistency in relation to peacerelated human diversity when it comes to assessing existing legal, social and moral norms or to create and implement new ones. (shrink)

Because of the widespread feminine priority that makes it the receptacle of śakti, India is definitely “one of the last bastions of the Mother,” as is pointed out in a recent book. If in fact there is a “maternalistic” culture it is certainly that of India, in spite of the legal regime, in which the element of affectionate magic characterizing all life and all organic intimacy is affirmed through the warm symbiosis of mother-child love. A miracle of that absolute love (...) incarnated with a natural serenity by millions of mothers dispensing a felicitous affectionate security, instilled in the Indian soul throughout its entire life. The traits of the Hindu personality and the principle content of its culture are organized and ordered around this center, characterized by an extraordinary coherence. Since its construction begins with this “dual unity” the Hindu personality has necessarily the popolarity of fusion-separation as a pivot. This is the central theme of S. Kakar, who, basing his conclusions on results of clinical psychoanalyses of Hindu individuals as well as on contributions from the collective imagination (folklore and myths) claims to discern the ontogenetic source of the supreme ideal of deliverance (mokṣa) in early childhood and, more specifically, in the strong unconscious desire to find again the benevolent presence of the “good mother”. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Genealogies of OppressionA Response to Ladelle McWhorter’s Racism and Sexual Oppression in Anglo-America: A GenealogyChloë TaylorLadelle McWhorter introducesRacism and Sexual Oppression inAnglo-America with an account of her experiences during the days between the attack on and the death of Matthew Shepard. On sabbatical near Pennsylvania State University in October 1998, McWhorter describes following these events as they were covered by the media and discussed on a Penn State University (...) LGBT listserv. A day and a half after Shepard’s death, McWhorter attended a candlelight vigil organized by Penn State students. It was raining, only thirty people were present, their voices could scarcely be heard over the sounds of traffic, and the event risked being more disheartening than consoling. An attempt was made to salvage the vigil through song, and someone suggested singing “We Shall Overcome,” but none of the students knew the words. McWhorter realized that she was the only person present who could lead the group in a song that might bring a sense of hope and closure to the otherwise depressing gathering. However, as she describes, she was wary of calling “upon the memory and power of African American movements for justice and freedom in order to further the rights and interests, or at least comfort the fearful souls of nonheterosexual people” (10). She writes,It was important for Matthew Shepard to remain Matthew Shepard and Emmett Till to remain Emmett Till, two separate individuals whose living and dying are different events in human history. I believed it was important [End Page 207] to remember the differences between black and queer struggles, subcultures, and experiences of oppression.(9)McWhorter thus did not sing, and thegathering disintegrated without closure. Each one of us wandered away, carrying with us, not a sense that despite the violence and injustice all around us life can go on and love and respect do still exist—which is, I suppose, what the candlelight shining in the darkness at such vigils is intended to instil in us—but rather with that sense of futility and hopelessness that drizzle and senseless death inspire.(5)Despite her decision to not sing, McWhorter goes on to discuss not only the danger of Sameness that prompted her decision—the danger of homogenizing or identifying oppressions—but also the “twin danger” of Difference. As McWhorter argues, “If we maintain radical distinctions between political events, we may fail to see important overarching patterns and as a result miss opportunities to form and consolidate alliances that might counter the networks of power that oppress so many of us” (10–11).Although there are risks involved in emphasizing either Sameness or Difference, McWhorter notes that she had always been more worried by the dangers of Sameness. She attributes this intuition to her attraction to Foucault. The genealogical method is concerned with revealing discontinuities between experiences in diverse historical periods, undermining histories that impose homogeneity on the past. Pointing out historical disparities kindles hope for a different future and is thus an emancipatory task. McWhorter notes that Foucault is a “splitter” and not a “lumper” like Hegel or Plato. Despite her Foucauldian aversion to lumping, McWhorter writes that in the wake of that candlelight vigil and the more general political climate of the late 1990s in which allegiances between civil rights movements were being disavowed, she came to worry about that other danger, the danger of too much splitting. She wonders “whether, despite all the differences in experience and effect, it might not be the case that somehow these things are joined together, part of the same matrix of power, employing the same means, serving the same ends, shaping the same lives” (11). She notes, “It is that other danger and that other set of possibilities that have moved me to write this book, despite the risks such an enquiry inevitably runs” (11).The dangers of Difference are practical but also factual since, McWhorter argues, there are real similarities between the deaths of Shepard and Till that risk being overlooked. Most significant of these is that both young men were murdered for their sexual deviance: one for his homosexuality, the other for his insistence that... (shrink)