Insurance is pervasive in many social settings. As a cooperative device based on risk pooling, it serves to attenuate the adverse consequences of various risks by offering policyholders coverage against the losses implied by adverse events in exchange for the payment of premiums. In the insurance industry, the concept of actuarial fairness serves to establish what could be adequate, fair premiums. Accordingly, premiums paid by policyholders should match as closely as possible their risk exposure. Such premiums are the product of (...) the probabilities of losses and the expected losses. This article presents a discussion of the fairness of actuarial fairness through three steps: defining the concept based on its formulation within the insurance industry; determining in which sense it may be about fairness; and raising some objections to the actual fairness of actuarial fairness. The necessity of a normative evaluation of actuarial fairness is justified by the influence of the concept on the current reforms of public insurance systems and the fact that it highlights the question of the repartition of the gains and burdens of social cooperation. (shrink)

The reference class problem arises when we want to assign a probability to a proposition (or sentence, or event) X, which may be classified in various ways, yet its probability can change depending on how it is classified. The problem is usually regarded as one specifically for the frequentist interpretation of probability and is often considered fatal to it. I argue that versions of the classical, logical, propensity and subjectivist interpretations also fall prey to their own variants of the reference (...) class problem. Other versions of these interpretations apparently evade the problem. But I contend that they are all “no-theory” theories of probability - accounts that leave quite obscure why probability should function as a guide to life, a suitable basis for rational inference and action. The reference class problem besets those theories that are genuinely informative and that plausibly constrain our inductive reasonings and decisions. I distinguish a “metaphysical” and an “epistemological” reference class problem. I submit that we can dissolve the former problem by recognizing that probability is fundamentally a two-place notion: conditional probability is the proper primitive of probability theory. However, I concede that the epistemological problem remains. (shrink)

Ian Hacking here presents a philosophical critique of early ideas about probability, induction and statistical inference and the growth of this new family of ...

Historical records show that there was no real concept of probability in Europe before the mid-seventeenth century, although the use of dice and other randomizing objects was commonplace. Ian Hacking presents a philosophical critique of early ideas about probability, induction, and statistical inference and the growth of this new family of ideas in the fifteenth, sixteenth, and seventeenth centuries. Hacking invokes a wide intellectual framework involving the growth of science, economics, and the theology of the period. He argues that the (...) transformations that made it possible for probability concepts to emerge have constrained all subsequent development of probability theory and determine the space within which philosophical debate on the subject is still conducted. First published in 1975, this edition includes an introduction that contextualizes his book in light of developing philosophical trends. Ian Hacking is the winner of the Holberg International Memorial Prize 2009. (shrink)

The common law of England and the United States and the civil law of continental Europe have a similar doctrinal structure, a structure not found in the English cases or Roman legal texts from which they supposedly descend. In this original and unorthodox study of common law and legal philosophy the author throws light on the historical origins of this confusion and in doing so attempts to find answers to many of the philosophical puzzles which contract lawyers face today. Reassessing (...) the impact of modern philosophy upon contract law, the author concludes that modern philosophy having failed to provide a new basis for a coherent doctrinal system in the law of contract, the only hope for devising such a coherent system lies in rediscovering the neglected philosophy of Aristotle and Aquinas. (shrink)

How were reliable predictions made before Pascal and Fermat's discovery of the mathematics of probability in 1654? What methods in law, science, commerce, philosophy, and logic helped us to get at the truth in cases where certainty was not attainable? The book examines how judges, witch inquisitors, and juries evaluated evidence; how scientists weighed reasons for and against scientific theories; and how merchants counted shipwrecks to determine insurance rates. Also included are the problem of induction before Hume, design arguments for (...) the existence of God, and theories on how to evaluate scientific and historical hypotheses. It is explained how Pascal and Fermat's work on chance arose out of legal thought on aleatory contracts. The book interprets pre-Pascalian unquantified probability in a generally objective Bayesian or logical probabilist sense. (shrink)

Historical records show that there was no real concept of probability in Europe before the mid-seventeenth century, although the use of dice and other randomizing objects was commonplace. Ian Hacking presents a philosophical critique of early ideas about probability, induction, and statistical inference and the growth of this new family of ideas in the fifteenth, sixteenth, and seventeenth centuries. Hacking invokes a wide intellectual framework involving the growth of science, economics, and the theology of the period. He argues that the (...) transformations that made it possible for probability concepts to emerge have constrained all subsequent development of probability theory and determine the space within which philosophical debate on the subject is still conducted. First published in 1975, this edition includes an introduction that contextualizes his book in light of developing philosophical trends. Ian Hacking is the winner of the Holberg International Memorial Prize 2009. (shrink)