Much has been written about stakeholder analysis as a process by which to introduce ethical values into management decision-making. This paper takes a critical look at the assumptions behind this idea, in an effort to understand better the meaning of ethical management decisions.A distinction is made between stakeholder analysis and stakeholder synthesis. The two most natural kinds of stakeholder synthesis are then defined and discussed: strategic and multi-fiduciary. Paradoxically, the former appears to yield business without ethics and the latter appears (...) to yield ethics without business. The paper concludes by suggesting that a third approach to stakeholder thinking needs to be developed, one that avoids the paradox just mentioned and that clarifies for managers (and directors) the legitimate role of ethical considerations in decision-making. (shrink)

The proper treatment of correlation in evolutionary game theory has unexpected connections with recent philosophical discussions of the theory of rational decision. The Logic of Decision (Jeffrey 1983) provides the correct framework for correlated evolutionary game theory and a variant of "ratifiability" is the appropriate generalization of "evolutionarily stable strategy". The resulting theory unifies the treatment of correlation due to kin, population viscosity, detection, signaling, reciprocal altruism, and behavior-dependent contexts. It is shown that (1) a strictly dominated strategy may be (...) selected, and (2) under conditions of perfect correlation a strictly efficient strategy must be selected. (shrink)

Game theory has proved a useful tool in the study of simple economic models. However, numerous foundational issues remain unresolved. The situation is particularly confusing in respect of the non-cooperative analysis of games with some dynamic structure in which the choice of one move or another during the play of the game may convey valuable information to the other players. Without pausing for breath, it is easy to name at least 10 rival equilibrium notions for which a serious case can (...) be made that here is the “right” solution concept for such games. (shrink)

Hume is rightly credited with giving a brilliant, and perhaps the best, account of justice as convention. Hume's importance as a forerunner of modern economics has also long been recognized. However, most of Hume's readers have not fully appreciated how closely Hume's analysis of convention foreshadows a particular branch of economic theory, namely, game theory. Starting with the work of Barry, Runciman and Sen and Lewis, there has been a flowering of literature on the informal game-theoretic insights to be found (...) in classics of political philosophy such as Hobbes, Locke, Hume and Rousseau. A number of authors in this tradition, including Lewis, Gauthier, Mackie, and Postema, have identified passages in Hume which they interpret as giving informal examples of specific games. Yet, unlike his predecessors, Hobbes and Locke, Hume does much more than present examples which have a game-theoretic structure. In his account of convention, Hume gives general conditions which characterize the resolution of social interaction problems, and in the examples he uses to illustrate this account, Hume outlines several different methods by which agents can arrive at such a resolution. Hume's general account of convention and his explanations of the origins of particular conventions together constitute a theory of strategic interaction, which is precisely what game theory aspires to be. (shrink)

How is one to act so as to do as well as possible according to one’s ranking of the possible outcomes? How—as it may be put—is one to act rationally? Sometimes the possible outcomes are not under one’s own control: an outcome is a combination of one’s own and another agent’s action. Often, then, one must try to work out what the other agent will do, in order to do as well as possible in one’s own lights. It is situations (...) of this sort—situations of “strategic interaction”—that most concern the game theorist. (shrink)

Sometimes two wrongs do make a right. That is, others' violations of moral rules may make it permissible for one to also violate these rules, to avoid being unfairly disadvantaged. This claim, originally advanced by Hobbes, is applied to three cases in business. It is suggested that the claim is one source of scepticism concerning business ethics. I argue, however, that the conditions under which business competitors' violations of moral rules would render one's own violations permissible are quite restricted. Hence, (...) the observation that two wrongs may make a right does not give people a broad warrant for ignoring moral standards in their business activities. (shrink)