Loss aversion can occur in riskless and risky choices. We present novel evidence on both in a non-student sample (660 randomly selected customers of a car manufacturer). We measure loss aversion in riskless choice in endowment effect experiments within and between subjects and find similar levels of average loss aversion in both. The subjects of the within study also participate in a simple lottery choice task which arguably measures loss aversion in risky choices. We find substantial heterogeneity in both measures (...) of loss aversion. Loss aversion in riskless choice and loss aversion in risky choice are strongly positively correlated, but on average riskless loss aversion is higher than risky loss aversion. We find that in both choice tasks, loss aversion increases in age, income, and wealth, and decreases in education. Our results provide novel supportive input to the debate about the reality of loss aversion. (shrink)

Determining the precise nature of the connection between preference, choice, and welfare has arguably been the central project in the field of welfare economics, which aims to offer a proper guide for economists in the making of policy decisions that affect people’s welfare. The two leading approaches here historically – the revealed preference and latent preference approaches – seem equally incapable of so guiding economists. I argue that the deadlock here is due to welfare economists’ failure to recognize a crucial (...) distinction between two senses of “preference.” I analyze and defend these senses of “preference,” and argue that each shares a close connection with just one of choice and welfare. This analysis reveals how economists should conceive of both the connections between “preference,” choice, and welfare, and the proper roles of these concepts in welfare economics. I conclude by showing this analysis to best explain the plausibility of two leading alternative approaches from Hausman and Sugden. (shrink)

An effective method to increase the number of potential cadaveric organ donors is to make people donors by default with the option to opt out. This non-coercive public policy tool to influence people’s choices is often justified on the basis of the as-judged-by-themselves principle: people are nudged into choosing what they themselves truly want. We review three often hypothesized reasons for why defaults work and argue that the as-judged-by-themselves principle may hold only in two of these cases. We specify further (...) conditions for when the principle can hold in these cases and show that whether those conditions are met is often unclear. We recommend ways to expand nationwide surveys to identify the actual reasons for why defaults work and discuss mandated choice policy as a viable solution to many arising conundrums. (shrink)

In this dissertation, I construct scientifically and practically adequate moral analogs of cognitive heuristics and biases. Cognitive heuristics are reasoning “shortcuts” that are efficient but flawed. Such flaws yield systematic judgment errors—i.e., cognitive biases. For example, the availability heuristic infers an event’s probability by seeing how easy it is to recall similar events. Since dramatic events, such as airplane crashes, are disproportionately easy to recall, this heuristic explains systematic overestimations of their probability (availability bias). The research program on cognitive heuristics (...) and biases (e.g., Daniel Kahneman’s work) has been scientifically successful and has yielded useful error-prevention techniques—i.e., cognitive debiasing. I attempt to apply this framework to moral reasoning to yield moral heuristics and biases. For instance, a moral bias of unjustified differences in the treatment of particular animal species might be partially explained by a moral heuristic that dubiously infers animals’ moral status from their aesthetic features. While the basis for identifying judgments as cognitive errors is often unassailable (e.g., per violating laws of logic), identifying moral errors seemingly requires appealing to moral truth, which, I argue, is problematic within science. Such appeals can be avoided by repackaging moral theories as mere “standards-of-interest” (a la non-normative metrics of purportedly right-making features/properties). However, standards-of-interest do not provide authority, which is needed for effective debiasing. Nevertheless, since each person deems their own subjective morality authoritative, subjective morality (qua standard-of-interest and not moral subjectivism) satisfies both scientific and practical concerns. As such, (idealized) subjective morality grounds a moral analog of cognitive biases—namely, subjective moral biases (e.g., committed anti-racists unconsciously discriminating). I also argue that "cognitive heuristic" is defined by its contrast with rationality. Consequently, heuristics explain biases, which are also so defined. However, such contrasting with rationality is causally irrelevant to cognition. This frustrates the presumed usefulness of the kind, heuristic, in causal explanation. As such, in the moral case, I jettison the role of causal explanation and tailor categories solely for contrastive explanation. As such, “moral heuristic” is replaced with "subjective moral fallacy," which is defined by its contrast with subjective morality and explains subjective moral biases. The resultant subjective moral biases and fallacies framework can undergird future empirical research. (shrink)

Chapter 1 of this book argued that moral philosophy should be based on seven principles of theory selection adapted from the sciences. Chapter 2 argued that these principles support basing normative moral philosophy on a particular problem of diachronic instrumental rationality: the ‘problem of possible future selves.’ Chapter 3 argued that a new moral principle, the Categorical-Instrumental Imperative, is the rational solution to this problem. Chapter 4 argued that the Categorical-Instrumental Imperative has three equivalent formulations akin to but superior to (...) Kant’s formulations of the Categorical Imperative. Chapter 5 argued that my principle’s three formulations make it rational to adopt a Moral Original Position to derive moral principles. The present chapter derives Four Principles of Fairness from the Moral Original Position--principles of coercion minimization, mutual assistance, fair negotiation, and virtue—and unifies them into a single principle of rightness: Rightness as Fairness. Finally, this chapter argues that Rightness as Fairness entails a novel approach to applied ethics called ‘principled fair negotiation’, illustrating how the theory provides a plausible new framework for addressing applied cases including lying, suicide, trolleys, torture, distribution of scarce resources, poverty, and the ethical treatment of animals. (shrink)

In recent years, some epistemologists have argued that practical factors can make the difference between knowledge and mere true belief. While proponents of this pragmatic thesis have proposed necessary and sufficient conditions for knowledge, it is striking that they have failed to address Gettier cases. As a result, the proposed analyses of knowledge are either lacking explanatory power or susceptible to counterexamples. Gettier cases are also worth reflecting on because they raise foundational questions for the pragmatist. Underlying these challenges is (...) the fact that pragmatic epistemologies not only rely upon normative theories of rational choice but also require externalist standards to rule out epistemic luck. Unfortunately, we lack adequate externalist theories of rational choice. In response, I address these foundational challenges by offering the outlines of an externalist decision theory. While this task is an ambitious one that I cannot hope to complete, I survey the outlines of a decision-theoretic framework on which a richer pragmatic epistemology can be developed. My hope is that this framework opens up new avenues of exploration for the pragmatic epistemologist. (shrink)

Some recent arguments for paternalist government interventions have been based in empirical results in psychology and behavioral economics that would seem to show that adult human beings are far removed from the ideals of rationality presupposed by much of philosophical and economic theory. In this paper it is argued that we need to move to a different conception of human decision-making competence than the one that lies behind that common line of philosophical and economic thinking, and which actually still lies (...) in the background of some of these recent approaches to paternalist interventions. An alternative picture of human decision-making competence is outlined and four criteria for identifying areas where paternalist interventions have a basic moral and political legitimacy are then identified on the basis of this picture. (shrink)

The trend in environmental management toward more adaptive, community-based, and holistic approaches will require new approaches to environmental valuation. In this paper, we offer a new valuation approach, one that embodies the core principles of adaptive management, which is experimental, multi-scalar, and place-based. In addition, we use hierarchy theory to incorporate spatial and temporal variability of natural systems into a multi-scalar management model. Our approach results in the consideration of multiple values within community-based ecosystem management, rather than an attempt to (...) maximise a single variable such as economic efficiency. We then offer two heuristics – one procedural and one evaluative – to guide a community toward shared goals, and to develop indicators to measure progress toward these goals. We illustrate our approach by application to environmental and developmental decisions in the Southern Appalachians. (shrink)

When should nudging be deemed as permissible and when should it be deemed as intrusive to individuals’ freedom of choice? Should all types of nudges be judged the same? To date the debate concerning these issues has largely proceeded without much input from the general public. The main objective of this study is to elicit public views on the use of nudges in policy. In particular we investigate attitudes toward two broad categories of nudges that we label pro-self and pro-social (...) nudges. In addition we explore how individual differences in thinking and feeling influence attitudes toward nudges. General population samples in Sweden and the United States were presented with vignettes describing nudge-policies and rated acceptability and intrusiveness on freedom of choice. To test for individual differences, measures on cultural cognition and analytical thinking were included. Results show that the level of acceptance toward nudge-policies was generally high in both countries, but were slightly higher among Swedes than Americans. Somewhat paradoxically a majority of the respondents also perceived the presented nudge-policies as intrusive to freedom of choice. Nudge-polices classified as pro-social had a significantly lower acceptance rate compared to pro-self nudges. Individuals with a more individualistic worldview were less likely to perceive nudges as acceptable, while individuals more prone to analytical thinking were less likely to perceive nudges as intrusive to freedom of choice. To conclude, our findings suggest that the notion of “one-nudge- fits-all” is not tenable. Recognizing this is an important aspect both for successfully implementing nudges as well as nuancing nudge theory. (shrink)

When we ask a decision maker to express her preferences, it is typically assumed that we are eliciting a pre-existing set of preferences. However, empirical research has suggested that our preferences are often constructed on the fly for the decision problem at hand. This paper explores the ramifications of this empirical research for our understanding of instrumental rationality. First, I argue that these results pose serious challenges for the traditional decision-theoretic view of instrumental rationality, which demands global coherence amongst all (...) of one's beliefs and desires. To address these challenges, I first develop a minimal notion of instrumental rationality that issues in localized, goal-relative demands of coherence. This minimal conception of instrumental rationality is then used to offer a more sophisticated account of the global aspects of instrumental rationality. The resulting view abandons all-or-nothing assessments of rationality and allows us to evaluate decision makers as being rational to varying degrees. My aim is to propose a theory that is both psychologically and normatively plausible. (shrink)

I investigate whether degreed beliefs are able to play the predictive, explanatory, and modeling roles that they are frequently taken to play. The investigation focuses on evidence—both from sources familiar in epistemology as well as recent work in behavioral economics and cognitive psychology—of variability in agents' apparent degrees of belief. Although such variability has been noticed before, there has been little philosophical discussion of its breadth or of the psychological mechanisms underlying it. Once these are appreciated, the inadequacy of degrees (...) of belief becomes clear. I offer a theoretical alternative to degrees of belief, what I call the filter theory. (shrink)

Classical (Bayesian) probability (CP) theory has led to an influential research tradition for modeling cognitive processes. Cognitive scientists have been trained to work with CP principles for so long that it is hard even to imagine alternative ways to formalize probabilities. However, in physics, quantum probability (QP) theory has been the dominant probabilistic approach for nearly 100 years. Could QP theory provide us with any advantages in cognitive modeling as well? Note first that both CP and QP theory share the (...) fundamental assumption that it is possible to model cognition on the basis of formal, probabilistic principles. But why consider a QP approach? The answers are that (1) there are many well-established empirical findings (e.g., from the influential Tversky, Kahneman research tradition) that are hard to reconcile with CP principles; and (2) these same findings have natural and straightforward explanations with quantum principles. In QP theory, probabilistic assessment is often strongly context- and order-dependent, individual states can be superposition states (that are impossible to associate with specific values), and composite systems can be entangled (they cannot be decomposed into their subsystems). All these characteristics appear perplexing from a classical perspective. However, our thesis is that they provide a more accurate and powerful account of certain cognitive processes. We first introduce QP theory and illustrate its application with psychological examples. We then review empirical findings that motivate the use of quantum theory in cognitive theory, but also discuss ways in which QP and CP theories converge. Finally, we consider the implications of a QP theory approach to cognition for human rationality. (shrink)

Are risk preferences stable over time? To address this question we elicit risk preferences from the same pool of subjects at two different moments in time. To interpret the results, we use a Fechner stochastic choice model in which the revealed preference of individuals is governed by some underlying preference, together with a random error. We take cumulative prospect theory as the underlying preference model (Kahneman and Tversky, Econometrica 47:263–292, 1979; Tversky and Kahneman, Journal of Risk and Uncertainty 5:297–323, 1992). (...) We observe that the aggregate pattern of preferences is very similar in both sessions, and it matches the results reported in the literature. Most subjects are risk averse for gains, and risk seeking for losses. However, the subjects that jointly agree with the reflection effect of prospect theory are around 50%. The percentage of individuals that change their responses across sessions is quite high, 63%. Estimating the stochastic choice model we find that 72% of the subjects have an underlying preference which agrees with the reflection effect of prospect theory. The remaining 28% are mainly classified as risk averse for both gains and losses. The results reinforce the empirical validity of the reflection effect. Deviations from the reflection effect can be attributed to noise, as well as to the existence of a fraction of risk averse subjects. (shrink)

Objective To determine whether presenting delivery room management options as defaults influences decisions to resuscitate extremely premature infants. Materials and methods Adult volunteers recruited from the world wide web were randomised to receive either resuscitation or comfort care as the delivery room management default option for a hypothetical delivery of a 23-week gestation infant. Participants were required to check a box to opt out of the default. The primary outcome measure was the proportion of respondents electing resuscitation. Data were analysed (...) using χ2 tests and multivariate logistic regression. Results Participants who were told the delivery room management default option was resuscitation were more likely to opt for resuscitation (OR 6.54 95% CI 3.85 to 11.11, p<0.001). This effect persisted on multivariate regression analysis (OR 7.00, 95% CI 3.97 to 12.36, p<0.001). Female gender, being married or in a committed relationship, being highly religious, experiences with prematurity, and favouring sanctity of life were significantly associated with decisions to resuscitate. Discussion Presenting delivery room options for extremely premature infants as defaults exert a significant effect on decision makers. The information structure of the choice task may act as a subtle form of manipulation. Further, this effect may operate in ways that a decision maker is not aware of and this raises questions of patient autonomy. Conclusion Presenting delivery room options for extremely premature infants as defaults may compromise autonomous decision-making. (shrink)

We present a theory of decision by sampling (DbS) in which, in contrast with traditional models, there are no underlying psychoeconomic scales. Instead, we assume that an attribute’s subjective value is constructed from a series of binary, ordinal comparisons to a sample of attribute values drawn from memory and is its rank within the sample. We assume that the sample reflects both the immediate distribution of attribute values from the current decision’s context and also the background, real-world distribution of attribute (...) values. DbS accounts for concave utility functions; losses looming larger than gains; hyperbolic temporal discounting; and the overestimation of small probabilities and the underestimation of large probabilities. Ó 2005 Elsevier Inc. All rights reserved. (shrink)

Psychological studies have long demonstrated effects of expectations on judgment, whereby the provision of information, either implicitly or explicitly, prior to an experience or decision can exert a substantial influence on the observed behavior. This study extended these expectation effects to the domain of interactive economic decision-making. Prior to playing a commonly-used bargaining task, the Ultimatum Game, participants were primed to expect offers that would be either relatively fair or unfair. A third group played the Game without receiving any prior (...) information about expected offers. As predicted, these expectations had a large effect on decisions made by participants in the Ultimatum Game, with those with expectations of fairness rejecting significantly more unfair offers than those participants who expected low offers. Implications for models of fairness and equity are discussed. (shrink)

It is commonly recognized that not all actions are candidates for moral evaluation. For instance, morality is silent on the issue whether to tie one's right shoe before one's left shoe or the other way around. This shoe-tying action is not a candidate for moral appraisal. The matter is amoral, for neither alternative is morally required nor forbidden, and both are permissible. It is not commonly recognized that not all actions are candidates for prudential evaluation. I shall argue, however, that (...) there are cases of individual action over time, as well, that are aprudent in the sense that none of the alternatives under consideration are required or forbidden by prudence, but all of them are permissible. These are cases in which there is no fact of the matter as to what is the best choice for one. There are at least two such cases: first, cases in which the alternative courses of action open to one are incommensurable; and second, cases in which one's values are not yet determined and one is deciding what values to adopt, what sort of person to become, or what ideals to pursue. In these cases, prudence is silent on the question of what one ought to do. Indeed, I go on to argue prudence can even be silent on the question whether to act according to the values one currently holds or to pursue an entirely different course that will result in changes to one's values, which is the third case of aprudent choice. (shrink)

To desire is to be in a particular state of mind. It is a state of mind familiar to everyone who has ever wanted to drink water or desired to know what has happened to an old friend, but its familiarity does not make it easy to give a theory of desire. Controversy immediately breaks out when asking whether wanting water and desiring knowledge are, at bottom, the same state of mind as others that seem somewhat similar: wishing never to (...) have been born, preferring mangoes to peaches, craving gin, having world conquest as one's goal, having a purpose in sneaking out to the shed, or being inclined to provoke just for the sake of provocation. These varied states of mind have all been grouped together under the heading of ‘pro attitudes’, but whether the pro attitudes are fundamentally one mental state or many is disputed. (shrink)

This article examines methodological individualism in terms of the theory that invariance under intervention is the signal feature of generalizations that serve as a basis for causal explanation. This theory supports the holist contention that macro-level generalizations can explain, but it also suggests a defense of methodological individualism on the grounds that greater range of invariance under intervention entails deeper explanation. Although this individualist position is not threatened by multiple-realizability, an argument for it based on rational choice theory is called (...) into question by experimental results concerning preference reversals. Key Words: methodological individualism • mechanisms • explanation • invariance • preference reversal. (shrink)

In this response, we clarify several misunderstandings of the understanding/acceptance principle and defend our specific operationalization of that principle. We reiterate the importance of addressing the problem of rational task construal and we elaborate the notion of computational limitations contained in our target article. Our concept of thinking dispositions as variable intentional-level styles of epistemic and behavioral regulation is explained, as is its relation to the rationality debate. Many of the suggestions of the commentators for elaborating two-process models are easily (...) integrated into our generic dual-process account. We further explicate how we view the relation between System 1 and System 2 and evolutionary and normative rationality. We clarify our attempt to fuse the contributions of the cognitive ecologists with the insights of the original heuristics and biases researchers. (shrink)

The various behavioral disciplines model human behavior in distinct and incompatible ways. Yet, recent theoretical and empirical developments have created the conditions for rendering coherent the areas of overlap of the various behavioral disciplines. The analytical tools deployed in this task incorporate core principles from several behavioral disciplines. The proposed framework recognizes evolutionary theory, covering both genetic and cultural evolution, as the integrating principle of behavioral science. Moreover, if decision theory and game theory are broadened to encompass other-regarding preferences, they (...) become capable of modeling all aspects of decision making, including those normally considered “psychological,” “sociological,” or “anthropological.” The mind as a decision-making organ then becomes the organizing principle of psychology. (Published Online April 27 2007) Key Words: behavioral game theory; behavioral science; evolutionary theory; experimental psychology; gene-culture coevolution; rational actor model; socialization. (shrink)

This is a comprehensive anthology of works concerning the nature of economics as a science, including classic texts and essays exploring specific branches and schools of economics. Apart from the classics, most of the selections in the third edition are new, as are the introduction and bibliography. No other anthology spans the whole field and offers a comprehensive introduction to questions about economic methodology.

Behavioral economics and existentialism both present informative perspectives on human choice. We argue in this article that the dialogue between the two approaches can enrich the current debate about the normative implications of behavioral economics. While behavioral economics suggests that our capacity to choose is constrained by cognitive biases and environmental influences, existentialism emphasizes that we can treat ourselves as free and ‘becoming’ beings in spite of the many constraints we face. Acknowledging these two perspectives in the form of a (...) theoretical synthesis—which we propose to call existentialist behavioral economics—provides us with reasons why we should protect our choices ‘as our own’ and how doing so may be more difficult than we anticipate. It also provides a framework to analyze the threat of identity-shaping social and technological developments, such as preference-altering nudges and artificially intelligent prediction algorithms. (shrink)

Interactions between an intelligent software agent and a human user are ubiquitous in everyday situations such as access to information, entertainment, and purchases. In such interactions, the ISA mediates the user’s access to the content, or controls some other aspect of the user experience, and is not designed to be neutral about outcomes of user choices. Like human users, ISAs are driven by goals, make autonomous decisions, and can learn from experience. Using ideas from bounded rationality, we frame these interactions (...) as instances of an ISA whose reward depends on actions performed by the user. Such agents benefit by steering the user’s behaviour towards outcomes that maximise the ISA’s utility, which may or may not be aligned with that of the user. Video games, news recommendation aggregation engines, and fitness trackers can all be instances of this general case. Our analysis facilitates distinguishing various subcases of interaction, as well as second-order effects that might include the possibility for adaptive interfaces to induce behavioural addiction, and/or change in user belief. We present these types of interaction within a conceptual framework, and review current examples of persuasive technologies and the issues that arise from their use. We argue that the nature of the feedback commonly used by learning agents to update their models and subsequent decisions could steer the behaviour of human users away from what benefits them, and in a direction that can undermine autonomy and cause further disparity between actions and goals as exemplified by addictive and compulsive behaviour. We discuss some of the ethical, social and legal implications of this technology and argue that it can sometimes exploit and reinforce weaknesses in human beings. (shrink)

This volume presents research that integrates decision making and creativity within the social contexts in which these processes occur. The volume is an essential addition to and expansion of recent approaches to decision making. Such approaches attempt to incorporate more of the psychological and socio-cultural context in which human decision making takes place. The authors come from different disciplines and also belong to a broad spectrum of research traditions. They present innovative chapters dealing with both theoretical and empirical aspects of (...) decision making in different personal and organizational contexts. All chapters are written from the perspective that human decision making is inherently social and more or less creative. The volume addresses fundamental questions about the nature of human decision making as it occurs in different social contexts. Thereby, it becomes essential reading for researchers in decision making and for advanced students in psychology, management science, informatics, and related disciplines. (shrink)

Social scientists are often interested in understanding how the dynamics of social systems are driven by the behavior of individuals that make up those systems. However, this process is hindered by the difficulty of experimentally studying how individual behavioral tendencies lead to collective social dynamics in large groups of people interacting over time. In this study, we investigate the role of social influence, a process well studied at the individual level, on the puzzling nature of success for cultural products such (...) as books, movies, and music. Using a “multiple‐worlds” experimental design, we are able to isolate the causal effect of an individual‐level mechanism on collective social outcomes. We employ this design in a Web‐based experiment in which 2,930 participants listened to, rated, and downloaded 48 songs by up‐and‐coming bands. Surprisingly, despite relatively large differences in the demographics, behavior, and preferences of participants, the experimental results at both the individual and collective levels were similar to those found in Salganik, Dodds, and Watts (2006). Further, by comparing results from two distinct pools of participants, we are able to gain new insights into the role of individual behavior on collective outcomes. We conclude with a discussion of the strengths and weaknesses of Web‐based experiments to address questions of collective social dynamics. (shrink)

A central question for psychologists, economists, and philosophers is how human lives should be valued. Whereas egalitarian considerations give rise to models emphasizing that every life should be valued equally, empirical research has demonstrated that valuations of lives depend on a variety of factors that often do not conform to specific normative expectations. Such factors include emotional reactions to the victims and cognitive considerations leading to biased perceptions of lives at risk (e.g., attention, mental imagery, pseudo-inefficacy, and scope neglect). They (...) can lead to a valuation function with decreasing marginal value and sometimes even decreasing absolute value as the number of victims increases. As a result, people spend more money to save an individual while at the same time being insensitive and apathetic to large losses of life, despite endorsing egalitarian norms. In this conceptual paper, we propose a descriptive model highlighting the role of different motivations and the conditions under which cognitions and emotions result in deviations from egalitarian normative valuations of human lives. (shrink)

Most philosophical decision theorists and philosophers of the social sciences believe that decision theory is and should be in the business of providing folk psychological explanations of choice behaviour, and that it can only do so if we understand the preferences, utilities and probabilities that feature in decision-theoretic models as ascriptions of mental states not reducible to choice. The behavioural interpretation of preference and related concepts, still common in economics, is consequently cast as misguided. This paper argues that even those (...) who strive to provide folk psychological explanations should side with the economists, and adopt a behavioural interpretation of the preferences featuring in decision-theoretic models. Under a mentalistic interpretation of preference, decision-theoretic models do not straightforwardly provide ordinary folk psychological explanations. Instead, they involve controversial enough commitments about the mental causes of choice to not only fail to adequately capture much unreflective decision-making, but also many intentional, reason-based and instrumentally rational choices. Satisfactory folk psychological explanation in fact only comes indirectly from inferring more fundamental conative attitudes from a pattern of decision-theoretic preferences. And the behavioural interpretation does a better job at facilitating such inferences. My argument extends to the related concepts of utility and probability. (shrink)

Libertarian paternalism's notion of “nudging” refers to steering individual decision making so as to make choosers better off without breaching their free choice. If successful, this may offer an ideal synthesis between the duty to respect patient autonomy and that of beneficence, which at times favors paternalistic influence. A growing body of literature attempts to assess the merits of nudging in health care. However, this literature deals almost exclusively with health policy, while the question of the potential benefit of nudging (...) for the practice of informed consent has escaped systematic analysis. This article focuses on this question. While it concedes that nudging could amount to improper exploitation of cognitive weaknesses, it defends the practice of nudging in a wide range of other conditions. The conclusion is that, when ethically legitimate, nudging offers an important new paradigm for informed consent, with a special potential to overcome the classical dilemma between paternalistic beneficence and respect for autonomy. (shrink)

The cognitive critique of the goals and desires that are input into the implicit calculations that result in instrumental rationality is one aspect of what has been termed broad rationality (Elster, 1983). This cognitive critique involves, among other things, the search for rational integration (Nozick, 1993)—that is, consistency between first-order and second-order preferences. Forming a second-order preference involves metarepresentational abilities made possible by mental decoupling operations. However, these decoupling abilities are separable from the motive that initiates the cognitive critique itself. (...) I argue that Velleman (1992) has identified that motive (“the desire to act in accordance with reasons”), and that it might be operationalisable as a thinking disposition at a very superordinate cognitive level. This thinking disposition, the Master Rationality Motive, is likely to be of particular importance in explaining individual differences in the tendency to seek rational integration. Preliminary research on related constructs suggests that this construct is measurable. (shrink)

This paper discusses Stanovich's appeal to individual differences in reasoning and decision-making to undermine the “adaptive rationality” project put forth by Gigerenzer and his co-workers. I discuss two different arguments based on Stanovich's research. First, heterogeneity in the use of heuristics seems to be at odds with the adaptationist background of the project. Second, the existence of correlations between cognitive ability and susceptibility to cognitive bias suggests that the “standard picture of rationality” (Stein, 1996, 4) is normatively adequate. I argue (...) that, as matters stand, none of the arguments can be seen as fully compelling. Nevertheless, my discussion is not only critical of Stanovich's research, as I also show that (and how) his research can push forward the so-called “rationality debate” by encouraging greater theoretical and experimental work. (shrink)

Inclusivity is widely considered a requirement of defensible environmental risk consultations and is often either mandated or recommended to help ensure attention to stakeholders’ diverse views. Experience suggests the opposite: the emphasis on an inclusive consultation process often makes it impossible for decision makers to listen carefully to stakeholders and for citizens’ views to influence the design and choice of proposed actions. This paper briefly reviews the promise of environmental risk consultations before outlining several of the more serious problems associated (...) with an emphasis on inclusivity: long lists of undifferentiated concerns, facts tainted by stakeholders’ perspectives and worldviews, little access to clarifying dialogue or tests of expertise, few opportunities to scrutinize knowledge quality, avoidance of controversial issues, and an overwhelming abundance of information. As a result, the promotion of inclusivity often serves as a convenient excuse for decision makers to silence citizens by substituting quantity for quality, breadth for depth, and an adversarial approach for dialogue and informed understanding. (shrink)

Laboratory experimentation was once considered impossible or irrelevant in economics. Recently, however, economic science has gone through a real ‘laboratory revolution’, and experimental economics is now a most lively subfield of the discipline. The methodological advantages and disadvantages of controlled experimentation constitute the main subject of this thesis. After a survey of the literature on experiments in philosophy and economics, the problem of testing normative theories of rationality is tackled. This philosophical issue was at the centre of a famous controversy (...) in decision theory, during which a methodology of normative falsification was first articulated and used to assess experimental results. In the third chapter, the methodological advantages of controlled experimentation are illustrated and discussed with examples taken from the experiments on the so-called ‘preference reversal’ phenomenon. Laboratory testing allows to establish with a high degree of certainty that certain phenomena lie behind the experimental data, by means of independent testing, elimination of alternative hypotheses, and the use of different instruments of observation. The fourth chapter is devoted to a conceptual analysis of the problem of ‘parallelism’. This is the problem of inferring from the occurrence of a phenomenon in the laboratory, to its instantiation also in non-laboratory environments. Experimental economists have discussed parallelism at length, and their views are presented and criticised. Eventually, it is argued that parallelism is a factual matter and as such can only be established on empirical grounds. The fifth chapter provides an example of how one can argue for parallelism, focusing on the case of experimentation on the ‘winner’s curse’ phenomenon. The role of experiments as ‘mediators’ between theoretical models and their target domain of application is illustrated, and the structure of parallelism arguments analysed in detail. Finally, in the last chapter, economic experiments are compared to simulations, in order to highlight their specific characteristics. (shrink)

Some contemporary paternalists argue in favor of government interventions based on how experimental psychologists and behavioral economists have found that our behavior often diverges from what would be predicted by rational-choice models. In this article it is argued that these findings can, more specifically, be used to identify decisional trouble spots where paternalist interventions may be legitimate. It is further argued that since the epistemic legitimacy of government paternalism ultimately rests on centralized decision-making having a comparative advantage, it also depends (...) on the possibility of such interventions being governed by an ideal of evidence-based policy-making. The article asks how stringently this requirement should be understood, and to what extent government can legitimately engage in what might be called experimental policy-making of a paternalistic character. (shrink)

Elaborating on the notions that humans possess different modalities of decision-making and that these are often influenced by moral considerations, we conducted an experimental investigation of the Trolley Problem. We presented the participants with two standard scenarios (‹lever’ and ‹stranger’) either in the usual or in reversed order. We observe that responses to the lever scenario, which result from (moral) reasoning, are affected by our manipulation; whereas responses to the stranger scenario, triggered by moral emotions, are unaffected. Furthermore, when asked (...) to express general moral opinions on the themes of the Trolley Problem, about half of the participants reveal some inconsistency with the responses they had previously given. (shrink)

Accelerating environmental uncertainty and the need to cope with increasingly complex market and social demands, combine to create high value for the intuitive approach to decision-making at the strategic level. Research on intuition suffers from marked fragmentation, due to the existence of disciplinary silos based on diverse, apparently irreconcilable, ontological and epistemological assumptions. Not surprisingly, there is no integrated interdisciplinary framework suitable for a rich account of intuition, contemplating how affect and cognition intertwine in the intuitive process, and how intuition (...) scales up from the individual to collective decision-making. This study contributes to the construction of a broad conceptual framework, suitable for a multi-level account of intuition and for a fruitful dialogue with distant research areas. It critically discusses two mainstream conceptualizations of intuition which claim to be grounded in a cross-disciplinary consensus. Drawing on the complexity paradigm, it then proposes a conceptualization of intuition as emergence. Finally, it explores the theoretical and practical implications. (shrink)

Individual differences on a variety of framing and conjunction problems were examined in light of Slovic and Tversky's (1974) understanding/acceptance principle-that more reflective and skilled reasoners are more likely to affirm the axioms that define normative reasoning and to endorse the task construals of informed experts. The predictions derived from the principle were confirmed for the much discussed framing effect in the Disease Problem and for the conjunction fallacy on the Linda Problem. Subjects of higher cognitive ability were disproportionately likely (...) to avoid each fallacy. Other framing problems produced much more modest levels of empirical support. It is conjectured that the varying patterns of individual differences are best explained by two-process theories of reasoning (e.g. Evans, 1984, 1996; Sloman, 1996) conjoined with the assumption that the two processes differentially reflect interactional and analytic intelligence. (shrink)