The well known Monty Hall-problem has a clear solution if one deals with a long enough series of individual games. However, the situation is different if one switches to probabilities in a single case. This paper presents an argument for Monty Hall situations with two players (not just one, as is usual). It leads to a quite general conclusion: One cannot apply probabilistic considerations (for or against any of the strategies) to isolated single cases. If one does that, one cannot (...) but violate a very plausible non-arbitrariness condition and is led into a Moore-paradoxical incoherence. Even though arguments for switching are correct as applied to series of games, they don’t say anything useful about what rationality demands in a single case. (shrink)

One of the main themes that has emerged from behavioral decision research during the past three decades is the view that people's preferences are often constructed in the process of elicitation. This idea is derived from studies demonstrating that normatively equivalent methods of elicitation (e.g., choice and pricing) give rise to systematically different responses. These preference reversals violate the principle of procedure invariance that is fundamental to all theories of rational choice. If different elicitation procedures produce different orderings of options, (...) how can preferences be defined and in what sense do they exist? This book shows not only the historical roots of preference construction but also the blossoming of the concept within psychology, law, marketing, philosophy, environmental policy, and economics. Decision making is now understood to be a highly contingent form of information processing, sensitive to task complexity, time pressure, response mode, framing, reference points, and other contextual factors. (shrink)

Liberals have often been attracted by contractarian modes of argument— and with good reason. Any system of social organization requires that some constraints be imposed on individuals' freedom of action; it is a central problem for any liberal political theory to show which constraints can be justified, and which cannot. A contractarian justification works by showing that the constraints in question can be understood as if they were the product of an agreement, voluntarily entered into by every member of society. (...) Thus, no one is required to give up his freedom for someone else's benefit, or in the pursuit of someone else's conception of the social good. (shrink)

In this paper we experimentally investigate the disparity between willingness-to-accept (WTA) and willingness-to-pay (WTP) for risky lotteries. The direction of the income effect is reversed by endowing subjects with the highest price of a lottery when asking the WTP question. Our results show that the income effect is too small to be the only source of the disparity. Since the disparity concentrates on a subsample of subjects, parametric and nonparametric tests of the WTA-WTP ratio may lead to contradictory results. The (...) disparity is significantly reduced when background risk is introduced. That is, putting subjects always into a risky position could improve the contingent valuation method, which is often concerned with the assessment of risky situations such as health risks, automobile safety, etc. (shrink)

The ratio bias—according to which individuals prefer to bet on probabilities expressed as a ratio of large numbers to normatively equivalent or superior probabilities expressed as a ratio of small numbers—has recently gained momentum, with researchers especially in health economics emphasizing the policy importance of the phenomenon. Although the bias has been replicated several times, some doubts remain about its economic significance. Our two experiments show that the bias disappears once order effects are excluded, and once salient and dominant incentives (...) are provided. This holds true for both choice and valuation tasks. Also, adding context to the decision problem does not alter this finding. No ratio bias could be found in between-subject tests either, which leads us to the conclusion that the policy relevance of the phenomenon is doubtful at best. (shrink)

A Treatise of Human Nature, David Hume's comprehensive attempt to base philosophy on a new, observationally grounded study of human nature, is one of the most important texts in Western philosophy. It is also the focal point of current attempts to understand 18th-century western philosophy. The Treatise addresses many of the most fundamental philosophical issues: causation, existence, freedom and necessity, and morality. The volume also includes Humes own abstract of the Treatise, a substantial introduction, extensive annotations, a glossary, a comprehensive (...) index, and suggestions for further reading. (shrink)

Problems and choices -- Who shall live? -- The physician : the captain of the team -- The hospital : the house of hope -- Drugs : the key to modern medicine -- Paying for medical care.

The principal findings of experimental economics are that impersonal exchange in markets converges in repeated interaction to the equilibrium states implied by economic theory, under information conditions far weaker than specified in the theory. In personal, social, and economic exchange, as studied in two-person games, cooperation exceeds the prediction of traditional game theory. This book relates these two findings to field studies and applications and integrates them with the main themes of the Scottish Enlightenment and with the thoughts of F. (...) A. Hayek. (shrink)

Unpopular in its day, David Hume's sprawling, three-volume A Treatise of Human Nature (1739-40) has withstood the test of time and had enormous impact on subsequent philosophical thought. Hume's comprehensive effort to form an observationally grounded study of human nature employs John Locke's empiric principles to construct a theory of knowledge from which to evaluate metaphysical ideas. A key to modern studies of eighteenth-century Western philosophy, the Treatise considers numerous classic philosophical issues, including causation, existence, freedom and necessity, and morality. (...) Unabridged republication of the edition originally published by Oxford at the Clarendon Press, London, 1888. Index. Appendix. (shrink)

The ratio bias––according to which individuals prefer to bet on probabilities expressed as a ratio of large numbers to normatively equivalent or superior probabilities expressed as a ratio of small numbers––has recently gained momentum, with researchers especially in health economics emphasizing the policy importance of the phenomenon. Although the bias has been replicated several times, some doubts remain about its economic significance. Our two experiments show that the bias disappears once order effects are excluded, and once salient and dominant incentives (...) are provided. This holds true for both choice and valuation tasks. Also, adding context to the decision problem does not change this outcome. No ratio bias could be found in between-subject tests either, which leads us to the conclusion that the policy relevance of the phenomenon is doubtful at best. (shrink)