For more than 10 years, Ulrich Beck has dominated discussion of risk issues in the social sciences. We argue that Beck's criticisms of the theory and practise of risk analysis are groundless. His understanding of what risk is is badly flawed. His attempt to identify risk and risk perception fails. He misunderstands and distorts the use of probability in risk analysis. His comments about the insurance industry show that he does not understand some of the basics of that industry. And (...) his assertions about the wrongness of allowing acceptable levels of exposure to toxic chemicals do not stand up to scrutiny. Key Words: Beck • risk analysis • risk perception • probability • insurance. (shrink)

The basic axioms or formal conditions of decision theory, especially the ordering condition put on preferences and the axioms underlying the expected utility formula, are subject to a number of counter-examples, some of which can be endowed with normative value and thus fall within the ambit of a philosophical reflection on practical rationality. Against such counter-examples, a defensive strategy has been developed which consists in redescribing the outcomes of the available options in such a way that the threatened axioms or (...) conditions continue to hold. We examine how this strategy performs in three major cases: Sen's counterexamples to the binariness property of preferences, the Allais paradox of EU theory under risk, and the Ellsberg paradox of EU theory under uncertainty. We find that the strategy typically proves to be lacking in several major respects, suffering from logical triviality, incompleteness, and theoretical insularity. To give the strategy more structure, philosophers have developed “principles of individuation”; but we observe that these do not address the aforementioned defects. Instead, we propose the method of checking whether the strategy can overcome its typical defects once it is given a proper theoretical expansion. We find that the strategy passes the test imperfectly in Sen's case and not at all in Allais's. In Ellsberg's case, however, it comes close to meeting our requirement. But even the analysis of this more promising application suggests that the strategy ought to address the decision problem as a whole, rather than just the outcomes, and that it should extend its revision process to the very statements it is meant to protect. Thus, by and large, the same cautionary tale against redescription practices runs through the analysis of all three cases. A more general lesson, simply put, is that there is no easy way out from the paradoxes of decision theory. (shrink)

This paper investigates the relation between consequentialism, as conceived of in moral theory, and standard expected utility theory. I argue that there is a close connection between the two. I show furthermore that consequentialism is not neutral with regard to the values of the agent. Consequentialism, as well as standard expected utility theory, is incompatible with the recognition of considerations that depend on what could have been the case, such as regret and disappointment. I conclude that consequentialism should be rejected (...) as a principle of rational choice and that there are reasons to doubt its plausibility in the realm of moral theory. Moreover, this is a reason to doubt whether standard expected utility theory is a plausible theory of rational choice. (shrink)

We propose a neural model of multiattribute-decision processes, based on an attractor neural network with dynamic thresholds. The model may be viewed as a generalization of the elimination by aspects model, whereby simultaneous selection of several aspects is allowed. Depending on the amount of synaptic inhibition, various kinds of scanning strategies may be performed, leading in some cases to vacillations among the alternatives. The model predicts that decisions of a longer time duration exhibit a lower violation of the simple scalability (...) law, as opposed to shorter decisions. Furthermore, the model is suggested as a general attribute-based decision module. Accordingly, various decision strategies are manifested depending on the module's parameters. (shrink)

(2013). Why humans are (sometimes) less rational than other animals: Cognitive complexity and the axioms of rational choice. Thinking & Reasoning: Vol. 19, No. 1, pp. 1-26. doi: 10.1080/13546783.2012.713178.

The paper builds on the basically Humean idea that A is a cause of B iff A and B both occur, A precedes B, and A raises the metaphysical or epistemic status of B given the obtaining circumstances. It argues that in pursuit of a theory of deterministic causation this ‘status raising’ is best explicated not in regularity or counterfactual terms, but in terms of ranking functions. On this basis, it constructs a rigorous theory of deterministic causation that successfully deals (...) with cases of overdetermination and pre-emption. It finally indicates how the account's profound epistemic relativization induced by ranking theory can be undone. Introduction Variables, propositions, time Induction first Causation Redundant causation Objectivization. (shrink)

I want in this paper to do two things. First, I want to respond to some studies that argue that people are often not rational: that people regularly and systematically depart from rationality. The conclusion itself does not worry me. I pressed for the same in a recent book. But the arguments seem to me wrong, and wrong in an interesting way. There may be something to be learned from seeing how and why they fail.

An explicitly frame related interpretation of a very general more for less result is used to establish a correspondingly general class of frame related switching results. These are used in turn to show how preference reversals of kinds found by Allais and others may not only be essentially non-paradoxical in character, but can be expected to be frequently observed, even under conditions of certainty and of complete information.

Knowledge-first epistemology includes a knowledge norm of action: roughly, act only on what you know. This norm has been criticized, especially from the perspective of so-called standard decision theory. Mueller and Ross provide example decision problems which seem to show that acting properly cannot require knowledge. I argue that this conclusion depends on applying a particular decision theory which is ill-motivated in this context. Agents’ knowledge is often most plausibly formalized as an ambiguous epistemic state, and the theory of decision (...) under ambiguity is then the appropriate modeling tool. I show how to model agents as acting rationally on the basis of their knowledge according to such a theory. I conclude that the tension between the knowledge norm of action and formal decision theory is illusory; the knowledge-first paradigm should be used to actively select the decision-theoretical tools that can best capture the knowledge-based decisions in any given situation. (shrink)

In this paper I analyse different justifications for the claim that the minor premise of the libertarian argument is true, namely, intuition, van Inwagen’s argument from moral responsibility and an argument from rationality. I claim none of these is satisfactory. I conclude by suggesting a possible way of interpreting the meaning of the free will intuition libertarians claim we have.

With characteristic incisiveness Georg Henrik von Wright identifies pro­ haireticIogic (i. e. the logic of preference) as the core of a general theory of value concepts. Essentially, this nucleus involves the logical study of acts from the point of view of their preferability. 1 (italics added) Though the term prohairesis is found in Plato, as well as in Aristotle's treatment of the relations of preference, it is von Wright who introduces this word into contemporary analytical philoso­ phy, and succinctly specifies (...) the philosophical dimensions it encompasses. The above emphasis upon the philosophical study of the formalization of preferences is a matter of utmost importance for understanding the type of in­ quiry this investigation attempts to initiate. Over the past one hundred years the literature on general theories of subjective utility has become massive, where one considers the work done in psychometrics, econometrics, statistical theories, probability theories, etc., etc. Histories in these areas are strong in tracing various evolutions in the development of the concept of preference in decision-making. However, what has not been investigated with sustained at­ tention are the fundamentally philosophical inquiries into the formalization of preference-relations. (shrink)

Whereas many others have scrutinized the Allais paradox from a theoretical angle, we study the paradox from an historical perspective and link our findings to a suggestion as to how decision theory could make use of it today. We emphasize that Allais proposed the paradox as a normative argument, concerned with ‘the rational man’ and not the ‘real man’, to use his words. Moreover, and more subtly, we argue that Allais had an unusual sense of the normative, being concerned not (...) so much with the rationality of choices as with the rationality of the agent as a person. These two claims are buttressed by a detailed investigation – the first of its kind – of the 1952 Paris conference on risk, which set the context for the invention of the paradox, and a detailed reconstruction – also the first of its kind – of Allais’s specific normative argument from his numerous but allusive writings. The paper contrasts these interpretations of what the paradox historically represented, with how it generally came to function within decision theory from the late 1970s onwards: that is, as an empirical refutation of the expected utility hypothesis, and more specifically of the condition of von Neumann–Morgenstern independence that underlies that hypothesis. While not denying that this use of the paradox was fruitful in many ways, we propose another use that turns out also to be compatible with an experimental perspective. Following Allais’s hints on ‘the experimental definition of rationality’, this new use consists in letting the experiment itself speak of the rationality or otherwise of the subjects. In the 1970s, a short sequence of papers inspired by Allais implemented original ways of eliciting the reasons guiding the subjects’ choices, and claimed to be able to draw relevant normative consequences from this information. We end by reviewing this forgotten experimental avenue not simply historically, but with a view to recommending it for possible use by decision theorists today. (shrink)

This article analyses how normative decision theory is understood by economists. The paradigmatic example of normative decision theory, discussed in the article, is the expected utility theory. It...

Rosenberg argues that intentional generalizations in the human sciences cannot be law-like because they are not amenable to significant empirical refinement. This irrefinability is said to result from the principle that supposedly controls in intentional explanation also serving as the standard for successful interpretation. The only credible evidence bearing on such a principle would then need conform to it. I argue that psychological generalizations are refinable and can be nomic. I show how empirical refinement of psychological generalizations is possible by (...) considering concrete cases. A sufficiently detailed view of the role of psychological generalizations in interpretation allows us to find in psychological investigations instances of bootstrap testing. (shrink)

This article introduces and discusses from a philosophical point of view the nascent field of neuroeconomics, which is the study of neural mechanisms involved in decision-making and their economic significance. Following a survey of the ways in which decision-making is usually construed in philosophy, economics and psychology, I review many important findings in neuroeconomics to show that they suggest a revised picture of decision-making and ourselves as choosing agents. Finally, I outline a neuroeconomic account of irrationality.

Expected-utility theory has been a popular and influential theory in philosophy, law, and the social sciences. While its original developers, von Neumann and Morgenstern, presented it as a purely predictive theory useful to the practitioners of economic science, many subsequent theorists, particularly those outside of economics, have come to endorse EU theory as providing us with a representation of reason. But precisely in what sense does EU theory portray reason? And does it do so successfully? There are two strikingly different (...) answers to these questions in the literature. On the one hand, there is the view of people such as David Gauthier that EU theory is an implementation of the idea that reason's only role is instrumental. On the other hand, there is the view suggested by Leonard Savage that the theory is a “formal” and noninstrumental characterization of our reasoning process. (shrink)

The relation between two systems of attitude ascription that capture all the empirically significant aspects of an agents thought and speech may be analogous to that between two systems of magnitude ascription that are equivalent relative to a transformation of scale. If so, just as an objects weighing eight pounds doesnt relate that object to the number eight (for a different but equally good scale would use a different number), similarly an agents believing that P need not relate her to (...) P (for a different but equally adequate interpretive scheme could use a different proposition). In either case the only reality picked out by any system of ascription is what is common to all equivalent rivals. By emphasizing some contrasts between decision theory and belief-desire psychology, it is argued that if attitude ascription is appropriately analogous to measurement then not only is being related to a proposition an artifact of the system of representation chosen, so are belief and desire. (shrink)

SummaryThe central thesis advocated by the author is that the so‐called hermeneutic method is actually the same as the hypothetico‐deductive method applied to materials that are “meaningful” . Five different interpretations of the role of the stranger in Ibsens “Peer Gynt” are discussed and shown to be examples of how interpretation‐hypotheses can be judged by confronting them with the data . The conclusion drawn from the analysis is this: there is no fundamental methodological difference between natural sciences and humanities.

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)

I illustrate the use of decision-theory and game-theory in the social sciences by means of examples from Gauthier, Tversky and Kahneman, and Bouldon.