In modern societies entrepreneurship and innovation are widely seen as key sources of economic growth and welfare increases. Yet entrepreneurial innovation has also meant losses and hardships for some members of society: it is destructive of some stakeholders’ wellbeing even as it creates new wellbeing among other stakeholders. Both the positive benefits and negative externalities of innovation are problematic because entrepreneurs initiate new ventures before their private profitability and/or social costs can be fully recognized. In this paper we consider three (...) analytical frameworks within which these issues might be examined: pre-commitments, contractarianism, and an entrepreneurial framework. We conclude that the intersection of stakeholder theory and entrepreneurial innovation is a potentially rich arena for research. (shrink)

This paper assesses James M. Buchanan's claim of following a positive approach in stark contrast to the normative approach to public finance of Richard A. Musgrave. The goal of this paper is to shed light on the foundations of modern American public finance by analysing one aspect of the methodology of its two most prominent fathers. I show (1) that it is difficult to distinguish Musgrave's and Buchanan's theories of public goods along the positive/normative dividing line and (2) that Buchanan's (...) theory can also be considered normative. In the first three parts, I follow the Weberian methodological tradition in looking for value judgements in the theories, and by reflecting on the nature of ideal types. In the last part, I propose a broader interpretation of Buchanan's methodological stance within the academic context of the 1960s. (shrink)

This chapter discusses the application of formal methods from social choice theory to the metasemantic question of whether radical interpretation is possible. Radical interpretation involves deducing semantic truths from non-semantic truths by appeal to certain a priori principles or criteria, such as the principle of charity. A familiar view is that the intended interpretation is the one that best meets a combination of constraints. It is suggested that this situation can be modelled as follows: each constraint determines a binary relation (...) on the set X of interpretations that is transitive and complete. The radical interpreter’s task is to determine an overall ordering as a function from the profile of individual orderings. The application of Arrow’s theorem in this context is discussed. (shrink)

Kenneth Arrow’s “impossibility” theorem—or “general possibility” theorem, as he called it—answers a very basic question in the theory of collective decision-making. Say there are some alternatives to choose among. They could be policies, public projects, candidates in an election, distributions of income and labour requirements among the members of a society, or just about anything else. There are some people whose preferences will inform this choice, and the question is: which procedures are there for deriving, from what is known or (...) can be found out about their preferences, a collective or “social” ordering of the alternatives from better to worse? The answer is startling. Arrow’s theorem says there are no such procedures whatsoever—none, anyway, that satisfy certain apparently quite reasonable assumptions concerning the autonomy of the people and the rationality of their preferences. The technical framework in which Arrow gave the question of social orderings a precise sense and its rigorous answer is now widely used for studying problems in welfare economics. The impossibility theorem itself set much of the agenda for contemporary social choice theory. Arrow accomplished this while still a graduate student. In 1972, he received the Nobel Prize in economics for his contributions. (shrink)

Our aim in this chapter is to draw lessons from current theory on the evolution of human cooperation for the management of contemporary commons. Evolutionary theorists have long been interested in cooperation but social scientists have documented patterns of cooperation in humans that present unusual problems for conventional evolutionary theory (and for rational choice explanations as well). Humans often cooperate with nonrelatives and are prone to cooperate in one-shot games. Cooperation is quite dependent on social institutions. We believe that this (...) last fact is the critical clue to understanding human cooperation. Models of cultural evolution suggest that group selection is a more potent force on culture than on genes. Evolutionary theory is in essence a theory of preferences in terms of rational actor theory and is thus complementary to the bounded rational choice models that underpin so much theorizing in the social sciences. Thus, the theory suggests a source for prosocial impulses, and leads to predictions about the limits of human altruism and constraints likely to be imposed upon the evolution of social institutions. We also consider the dynamics of genes as they coevolved with increasingly sophisticated cultural institutions over the long course of human evolution in the Pleistocene. We hypothesize that the long exposure of human populations to group selected cultural norms and preferences is likely to have resulted in an innate psychology adapted to living in egalitarian, cooperative societies of a few hundred to a few thousand people. We call this the tribal social instincts hypothesis. The evolution of complex societies in the past few thousand years constitutes a series of natural experiments that test this hypothesis. If it is correct, the institutions of complex societies must somehow take advantage of the prosocial elements of the tribal instincts while finessing the problem that the tribal social instincts are ill adapted to life in large, hierarchical, inegalitarian societies with extensive dominance of subordinates by elites.. (shrink)

Economic Theory normally assumes the so-called homo economicus, a consequential model of rationality. We highlight the main features of this model in opposition to deontology: axiological homogeneity, maximization and agent neutrality. Amartya Sen’s criticism of standard consequentialism copes to those features, and includes commitment and duty in the economic rationality. We analyze his concept of preference to ascertain how far economic rationality can thus go in the direction of deontology. We conclude that, though diminished, the difference between them still remains.

Debates on the practical relevance of ideal theory revolve around Sen's metaphor of navigating a mountainous landscape. In *The Tyranny of the Ideal*, Gerald Gaus presents the most thorough articulation of this metaphor to date. His detailed exploration yields new insight on central issues in existing debates, as well as a fruitful medium for exploring important limitations on our ability to map the space of social possibilities. Yet Gaus's heavy reliance on the navigation metaphor obscures questions about the reasoning by (...) which ideal theories are justified. As a result, Gaus fails to notice the ways in which his theory of the Open Society resembles the ideal theories he aims to dismiss. Ironically, Gaus winds up neglecting the ways in which the Open Society might tyrannize our efforts to realize greater justice. (This article is part of a symposium on Gaus's *The Tyranny of the Ideal*.). (shrink)

In an article from 1973, Rittel and Webber distinguished between “tame” or “benign” problems on the one hand and “wicked” problems on the other. The authors argued that wicked problems occur in nearly all public policy issues. Since different groups adhere to different value-sets, solutions can only be expressed as better or worse. By no means can they be viewed as definitive or objective. In this paper we shall consider, from this very angle, the theory of social choice which is (...) about the aggregation of individual preferences with the aim to derive a consistent social preference. We shall show that collective choice offers wicked problems of various types which differ in their degree of severity. We shall hereby concentrate on welfare functions and voting schemes of different kinds and shall discuss these in the light of various criteria such as Arrow’s independence condition, Condorcet consistency, monotonicity, manipulability, and other properties. (shrink)

May's theorem famously shows that, in social decisions between two options, simple majority rule uniquely satisfies four appealing conditions. Although this result is often cited in support of majority rule, it has never been extended beyond decisions based on pairwise comparisons of options. We generalize May's theorem to many-option decisions where voters each cast one vote. Surprisingly, plurality rule uniquely satisfies May's conditions. This suggests a conditional defense of plurality rule: If a society's balloting procedure collects only a single vote (...) from each voter, then plurality rule is the uniquely compelling electoral procedure. To illustrate the conditional nature of this claim, we also identify a richer informational environment in which approval voting, not plurality rule, is supported by a May-style argument. (shrink)

Riker (1982) famously argued that Arrow’s impossibility theorem undermined the logical foundations of “populism”, the view that in a democracy, laws and policies ought to express “the will of the people”. In response, his critics have questioned the use of Arrow’s theorem on the grounds that not all configurations of preferences are likely to occur in practice; the critics allege, in particular, that majority preference cycles, whose possibility the theorem exploits, rarely happen. In this essay, I argue that the critics’ (...) rejoinder to Riker misses the mark even if its factual claim about preferences is correct: Arrow’s theorem and related results threaten the populist’s principle of democratic legitimacy even if majority preference cycles never occur. In this particular context, the assumption of an unrestricted domain is justified irrespective of the preferences citizens are likely to have. (shrink)

Policy-makers face an uncertain world. One way of getting a handle on decision-making in such an environment is to rely on evidence. Despite the recent increase in post-fact figures in politics, evidence-based policymaking takes centre stage in policy-setting institutions. Often, however, policy-makers face large volumes of evidence from different sources. Robustness analysis can, prima facie, handle this evidential diversity. Roughly, a hypothesis is supported by robust evidence if the different evidential sources are in agreement. In this thesis, I strengthen the (...) case for the use of robustness analysis in evidence-based policymaking by answering open research questions about this inference technique. First, I argue that existing taxonomies miss a fruitful category of robustness reasoning, that is predictive stability. Second, I claim that derivational robustness analysis – the investigation of whether the results of different models are in agreement – can yield interesting insights even if not the entire relevant model space is covered by available models or if the model results are only partially in agreement. Third, I claim that expert knowledge is necessary to address questions that arise when one applies measurement robustness analysis – the investigation into whether multiple means of measurement yield the same result. Finally, I argue that, in situations where evidence from different measurements is not in agreement, it can be advisable to no longer take all of the evidence into account. This can be done in a rationally defensible way by choosing the most adequate theory or model underlying parts of the evidence set. I discuss examples from climate, medical, and economic policy-making to establish my claims. (shrink)

Can collectives be wise? The thesis that they can has recently received a lot of attention. It has been argued that, in many judgmental or decision-making tasks, suitably organized groups can outperform their individual members. In this paper, I discuss the lessons we can learn about collective wisdom from the emerging theory of judgment aggregation, as distinct from the literature on Condorcet’s jury theorem.

I model sequential decisions over multiple interconnected propositions and investigate path-dependence in such decisions. The propositions and their interconnections are represented in propositional logic. A sequential decision process is path-dependent if its outcome depends on the order in which the propositions are considered. Assuming that earlier decisions constrain later ones, I prove three main results: First, certain rationality violations by the decision-making agent—individual or group—are necessary and sufficient for path-dependence. Second, under some conditions, path-dependence is unavoidable in decisions made by (...) groups. Third, path-dependence makes decisions vulnerable to strategic agenda setting and strategic voting. I also discuss escape routes from path-dependence. My results are relevant to discussions on collective consistency and reason-based decision-making, focusing not only on outcomes, but also on underlying reasons, beliefs, and constraints. (shrink)

My dissertation titled Two Models of Consensus is based on five arguments. 1. Consensus is asymmetrical. 2. Consensus is partial or limited unanimity. 3. Consensus and democracy do have a concomitant relation. 4. Consensus is not organic to political systems. 5. Consensus depends upon civil society, subsidiarity, and the dominant cultural paradigm of society. In the first chapter titled "Historical Specificity of the Western Conception of Civil Society" I argue that concept of civil society evolved under certain conditions in a (...) liberal democratic tradition such as shared social imaginaries. As an example of how diversity could lead to hypostatization of cultural differences, I exposit the concept of Indian caste system. In the second chapter, "Intersubjectivity and the Problem of Cultural Identities", I compare the ideas of Hans Georg Gadamer and George Herbert Mead about self- interested action and mutual cooperative action. Gadamer and Mead emphasize intersubjective communication, I Thou relationships. I explain the importance of the I Thou relationship for a consensual activity. The third chapter, "Consensus in the Realm of Science", discusses the impact of science as the context of justification in advanced liberal democracies and its effect on consensus. Charles Sanders Peirces attempt to apply his scientific method to arrive at a consensus in the social sphere is also discussed in this chapter. In the fourth chapter, "Kwasi Wiredu The Akan Conception of Communitarian Consensus", I discuss Kwasi Wiredus emphasis on achieving a consensus on the basis of what is and not what ought to be, in the social realm. Wiredu differentiates between a government by consent and a government by consensus. I elaborate Wiredu's abakysis of the process of consensus that was in vogue in the Akan community of Ghana. In the final chapter, "Political Consensus - Intra-cultural and Extra-cultural," I argue that consensus is asymmetrical. It is imperative to compromise in social, political, economic, and religious beliefs on the basis of weak deontological and weak consequential approaches. Consensus necessitates a synthesis of different kinds of social actions such as purposive-instrumental, traditional, value-laden, and communicative action into what I call the Cooperative Action. Only such an action can speak across cultures and facilitate genuine cross-cultural interaction. (shrink)

The aim of this article is to introduce the theory of judgment aggregation, a growing interdisciplinary research area. The theory addresses the following question: How can a group of individuals make consistent collective judgments on a given set of propositions on the basis of the group members' individual judgments on them? I begin by explaining the observation that initially sparked the interest in judgment aggregation, the so-called "doctinal" and "discursive paradoxes". I then introduce the basic formal model of judgment aggregation, (...) which allows me to present some illustrative variants of a generic impossibility result. I subsequently turn to the question of how this impossibility result can be avoided, going through several possible escape routes. Finally, I relate the theory of judgment aggregation to other branches of aggregation theory. Rather than offering a comprehensive survey of the theory of judgment aggregation, I hope to introduce the theory in a succinct and pedagogical way, providing an illustrative rather than exhaustive coverage of some of its key ideas and results. (shrink)

Arrow's Independence of Irrelevant Alternatives (IIA) has been under criticism for decades for not taking account of preference intensities. Computer-simulation results by Aki Lehtinen concerning strategic voting under various voting rules show that this intensity argument does not need to rest on mere intuition. Voters may express intensities by voting strategically, and that this has beneficial aggregate-level consequences: utilitarian efficiency is higher if voters engage in strategic behaviour than if they always vote sincerely. Strategic voting is thus unambiguously beneficial under (...) a utilitarian evaluation of outcomes. What has been considered the main argument for IIA turns out to be one against it. This paper assesses the implications of these results for interpretations of Arrow's theorem and the Gibbard-Satterthwaite theorem in a discussion on the methodological and philosophical arguments concerning preference intensities and IIA. (shrink)

How can the propositional attitudes of several individuals be aggregated into overall collective propositional attitudes? Although there are large bodies of work on the aggregation of various special kinds of propositional attitudes, such as preferences, judgments, probabilities and utilities, the aggregation of propositional attitudes is seldom studied in full generality. In this paper, we seek to contribute to filling this gap in the literature. We sketch the ingredients of a general theory of propositional attitude aggregation and prove two new theorems. (...) Our first theorem simultaneously characterizes some prominent aggregation rules in the cases of probability, judgment and preference aggregation, including linear opinion pooling and Arrovian dictatorships. Our second theorem abstracts even further from the specific kinds of attitudes in question and describes the properties of a large class of aggregation rules applicable to a variety of belief-like attitudes. Our approach integrates some previously disconnected areas of investigation. (shrink)

Majority cycling and related social choice paradoxes are often thought to threaten the meaningfulness of democracy. But deliberation can prevent majority cycles – not by inducing unanimity, which is unrealistic, but by bringing preferences closer to single-peakedness. We present the first empirical test of this hypothesis, using data from Deliberative Polls. Comparing preferences before and after deliberation, we find increases in proximity to single-peakedness. The increases are greater for lower versus higher salience issues and for individuals who seem to have (...) deliberated more versus less effectively. They are not merely a byproduct of increased substantive agreement. Our results both refine and support the idea that deliberation, by increasing proximity to single-peakedness, provides an escape from the problem of majority cycling. (shrink)

This paper provides an introductory review of the theory of judgment aggregation. It introduces the paradoxes of majority voting that originally motivated the field, explains several key results on the impossibility of propositionwise judgment aggregation, presents a pedagogical proof of one of those results, discusses escape routes from the impossibility and relates judgment aggregation to some other salient aggregation problems, such as preference aggregation, abstract aggregation and probability aggregation. The present illustrative rather than exhaustive review is intended to give readers (...) new to the field of judgment aggregation a sense of this rapidly growing research area. (shrink)

This paper provides an introductory review of the theory of judgment aggregation. It introduces the paradoxes of majority voting that originally motivated the field, explains several key results on the impossibility of propositionwise judgment aggregation, presents a pedagogical proof of one of those results, discusses escape routes from the impossibility and relates judgment aggregation to some other salient aggregation problems, such as preference aggregation, abstract aggregation and probability aggregation. The present illustrative rather than exhaustive review is intended to give readers (...) new to the field of judgment aggregation a sense of this rapidly growing research area. (shrink)

One of the fundamental tradeoffs underlying society is that between efficiency and equality. The challenge for institutional design is to strike the right balance between these two goals. Game-theoretic models of public-goods provision under ‘meritocratic matching’ succinctly capture this tradeoff: under zero meritocracy, theory predicts maximal inefficiency but perfect equality; higher levels of meritocracy are predicted to improve efficiency but come at the cost of growing inequality. We conduct an experiment to test this tradeoff behaviorally and make the astonishing finding (...) that, notwithstanding theoretical predictions, higher levels of meritocracy increase both efficiency and equality, that is, meritocratic matching dissolves the tradeoff. Fairness considerations can explain the departures from theoretical predictions including the behavioral phenomena that lead to dissolution of the efficiency-equality tradeoff. (shrink)