Credit risk, also known as default risk, is the likelihood of a corporation losing money if a business partner defaults. If the liabilities are not met under the terms of the contract, the firm may default, resulting in the loss of the company. There is no clear way to distinguish between organizations that will default and those that will not prior to default. We can only make probabilistic estimations of the risk of default at best. (...) There are two types of credit risk default models in this regard: structural and reduced-form models. Structural models are used to calculate the likelihood of a company defaulting based on its assets and liabilities. If the market worth of a company's assets is less than the debt it owes, it will default. Reduced form models often assume an external cause of default, such as a Poisson jump process, which is driven by a stochastic process. They model default as a random event with no regard for the balance sheet of the company. This paper provides a Review of credit risk default models. (shrink)

Credit risk, also known as default risk, is the likelihood of a corporation losing money if a business partner defaults. If the liabilities are not met under the terms of the contract, the firm may default, resulting in the loss of the company. There is no clear way to distinguish between organizations that will default and those that will not prior to default. We can only make probabilistic estimations of the risk of default at best. (...) There are two types of credit risk default models in this regard: structural and reduced form models. Structural models are used to calculate the likelihood of a company defaulting based on its assets and liabilities. If the market worth of a company's assets is less than the debt it owes, it will default. Reduced form models often assume an external cause of default, such as a Poisson jump process, which is driven by a stochastic process. They model default as a random event with no regard for the balance sheet of the company. This paper provides a Review of credit risk default models. (shrink)

Default logic has been a very active research topic in artificial intelligence since the early 1980s, but has not received as much attention in the philosophical literature thus far. This paper shows one way in which the technical tools of artificial intelligence can be applied in contemporary epistemology by modeling a paradigmatic case of deep disagreement using default logic. In §1 model-building viewed as a kind of philosophical progress is briefly motivated, while §2 introduces the case of deep (...) disagreement we aim to model. On the heels of this, §3 defines our formal framework, viz., a refined Horty-style default logic. §4 then uses the framework to model deep disagreement, and finally §5 provides a critical discussion of the result. (shrink)

The human eyes and brain, which have finite boundaries, create a ‘‘virtual’’ space within our central nervous system that interprets and perceives a space that appears boundless and infinite. Using insights from studies on the visual system, we propose a novel fast processing mechanism involving the eyes, visual pathways, and cortex where external vision is imperceptibly processed in our brain in real time creating an internal representation of external space that appears as an external view. We introduce the existence of (...) a three-dimension default space consisting of intrapersonal body space that serves as the framework where visual and non-visual sensory information is sensed and experienced. We propose that the thalamus integrates processed information from corticothalamic feedback loops and fills-in the neural component of 3D default space with an internal visual representation of external space, leading to the experience of visual consciousness. This visual space inherently evades perception so we have introduced three easy clinical tests that can assist in experiencing this visual space. We also review visual neuroanatomical pathways, binocular vision, neurological disorders, and visual phenomenon to elucidate how the representation of external visible space is recreated within the mind. (shrink)

In this article, we examine phantom limb syndrome to gain insights into how the brain functions as the mind and how consciousness arises. We further explore our previously proposed consciousness model in which consciousness and body schema arise when information from throughout the body is processed by corticothalamic feedback loops and integrated by the thalamus. The parietal lobe spatially maps visual and non-visual information and the thalamus integrates and recreates this processed sensory information within a three-dimensional space termed the ‘‘3D (...) default space.’’ We propose that phantom limb syndrome and phantom limb pain arise when the afferent signaling from the amputated limb is lost but the neural circuits remain intact. In addition, integration of conflicting sensory information within the default 3D space and the loss of inhibitory afferent feedback to efferent motor activity from the amputated limb may underlie phantom limb pain. (shrink)

The one-side defaultable financial derivatives valuation problems have been studied extensively, but the valuation of bilateral derivatives with asymmetric credit qualities is still lacking convincing mechanism. This paper presents an analytical model for valuing derivatives subject to default by both counterparties. The default-free interest rates are modeled by the Market Models, while the default time is modeled by the reduced-form model as the first jump of a time-inhomogeneous Poisson process. All quantities modeled are market-observable. The closed-form (...) solution gives us a better understanding of the impact of the credit asymmetry on swap value, credit value adjustment, swap rate and swap spread. (shrink)

In this note, we consider a Merton model for default risk, where the firm’s value is driven by a Brownian motion and a compound Poisson process.

This article presents a new model for valuing a credit default swap (CDS) contract that is affected by multiple credit risks of the buyer, seller and reference entity. We show that default dependency has a significant impact on asset pricing. In fact, correlated default risk is one of the most pervasive threats in financial markets. We also show that a fully collateralized CDS is not equivalent to a risk-free one. In other words, full collateralization cannot eliminate counterparty (...) risk completely in the CDS market. (shrink)

This article presents a comprehensive framework for valuing financial instruments subject to credit risk. In particular, we focus on the impact of default dependence on asset pricing, as correlated default risk is one of the most pervasive threats in financial markets. We analyze how swap rates are affected by bilateral counterparty credit risk, and how CDS spreads depend on the trilateral credit risk of the buyer, seller, and reference entity in a contract. Moreover, we study the effect of (...) collateralization on valuation, since the majority of OTC derivatives are collateralized. The model shows that a fully collateralized swap is risk-free, whereas a fully collateralized CDS is not equivalent to a risk-free one. (shrink)

Philosophers of science and metascientists alike typically model scientists’ behavior as driven by credit maximization. In this article I argue that this modeling assumption cannot account for how scientists have a default level of trust in each other’s assertions. The normative implication of this is that science policy should not focus solely on incentive reform.

Contextuality and entanglement are valuable resources for quantum computing and quantum information. Bell inequalities are used to certify entanglement; thus, it is important to understand why and how they are violated. Quantum mechanics and behavioural sciences teach us that random variables ‘measuring’ the same content (the answer to the same Yes or No question) may vary, if ‘measured’ jointly with other random variables. Alice’s and Bob’s raw data confirm Einsteinian non-signaling, but setting dependent experimental protocols are used to create samples (...) of coupled pairs of distant ±1 outcomes and to estimate correlations.Marginal expectations, estimated using these final samples, depend on distant settings. Therefore,a system of random variables ‘measured’ in Bell tests is inconsistently connected and it should be analyzed using a Contextuality- by-Default approach, what is done for the first time in this paper.The violation of Bell inequalities and inconsistent connectedness may be explained using a contextual locally causal probabilistic model in which setting dependent variables describing measuring instruments are correctly incorporated. We prove that this model does not restrict experimenters` freedom of choice which is a prerequisite of science. Contextuality seems to be the rule and not an exception; thus, it should be carefully tested. (shrink)

Based on the analysis of the accumulated experimental data and on the informational concepts of the Informational Model of Consciousness (IMC), in this article is presented an informational modeling of the operability of the posterior cingulate cortex (PCC). Examination of the experimental results obtained with the modern non-destructive, high spatial resolution investigation tools to study the functional characteristics of the PCC and associate metabolic processes, shows mainly that this is involved in the large scale default mode network (DMN), composed (...) primarily by PCC, medial prefrontal cortex (MPFC), and the inferior parietal lobe (IPL), displaying an increased activity under passive task conditions (i.e. negative mode). This operability mode is in an opposing balance with attention and task performances mode, acting thus as a disruption process. One of the main conclusions is that the PCC cognitive orientation is primarily focused on the self person or on the “self” (I) projected from others, in “daydreaming” or “mind-wandering" wakeful rest, involved in present or future virtual projects. In spite of these advances, the particular role and specific functions of PCC are not yet fully understood, PCC remaining an enigmatic/contradictory structure of the brain, not included up to date in any brain model, so the PCC informational modeling presented here in terms of IMC covers this lack. IMC assigns to the brain the fundamental role of informational processor, composed by various operating structures according to specific objectives synthetically expressed by seven main cognitive centers of “self" (I) as: Iknow (memory), Iwant (decision), Ilove (emotions), Iam (self-status), Icreate (genetic transmission), Icreated (genetic inheritance), Ibelive (info-selection), assuring the info-connectivity with the body and external/internal world, the adaptability (learning process) and survival. It is deduced in this way that the specific behavior of PCC according to its intermediary architectural position between the vital central region of the brain, connecting the mind with the external/internal reality, is that of a moderator/integrator hub/informational YES/NO switcher from the external/awake captured focusing information to the internal accumulated experience of life, used as a valid reference. Therefore, the specific operability of PCC in terms of cognitive centers is that of an informational switcher, mainly operating with Iknow/Iwant to explore the self-status reflected in Iam, within day-dreaming/imaginary virtual sceneries. (shrink)

In this paper, I examined whether evidence from the neuroscience of morality supports the standard models of phronesis, i.e., Jubilee and Aretai Centre Models. The standard models explain phronesis as a multifaceted construct based on interaction and coordination among functional components. I reviewed recent neuroscience studies focusing on brain networks associated with morality and their connectivity to examine the validity of the models. Simultaneously, I discussed whether the evidence helps the models address challenges, particularly those (...) from the phronesis eliminativism. Neuroscientific evidence supported the importance of brain networks, i.e., the default mode, salience, and central executive functioning networks, in moral functioning in general. The findings favorably supported the multifaceted and integrative nature of phronesis proposed by the standard models. Finally, I considered how the two models could explain the mechanisms of phronesis more integratively based on neuroscientific findings. At the end of this paper, with the evidence, I proposed several practical ideas to promote the cultivation of phronesis, e.g., the consideration of coordination among components for moral functioning and the use of moral exemplars. (shrink)

In this research, an agent-based model was developed to study the propagation of physical climate shocks through supply chain networks. By combining supply chain and financial models, the study examines the effects of climate shocks on firms’ production capacities and their subsequent impacts on firm default risk. A comprehensive mathematical framework is presented for the simulation of physical risks, their subsequent up- and downstream impacts along the supply chain, and the translation of physical impacts into an increased level (...) of default risk. The results highlight the importance of supply chains as a transmission channel for physical climate risks and emphasize the effectiveness of implementing adaptation measures. Practical examples demonstrate the model’s behavior under different hypothetical climate scenarios and identify the sectors most vulnerable to increases in the frequency and intensity of climate events. Overall, this study provides insights into the transmission dynamics of climate shocks and emphasizes the need for resilience against climate events in supply chain networks. (shrink)

The standard model of precedential constraint holds that a court is equally free to modify a precedent of its own and a precedent of a superior court—overruling aside, it does not differentiate horizontal and vertical precedents. This paper shows that no model can capture the U.S. doctrine of precedent without making that distinction. A precise model is then developed that does just that. This requires situating precedent cases in a formal representation of a hierarchical legal structure, and adjusting the constraint (...) that a precedent imposes based on the relationship of the precedent court and the instant court. The paper closes with suggestions for further improvements of the model. (shrink)

This paper argues that the reduced-form jump diffusion model may not be appropriate for credit risk modeling. To correctly value hybrid defaultable financial instruments, e.g., convertible bonds, we present a new framework that relies on the probability distribution of a default jump rather than the default jump itself, as the default jump is usually inaccessible. As such, the model can back out the market prices of convertible bonds. A prevailing belief in the market is that convertible arbitrage (...) is mainly due to convertible underpricing. Empirically, however, we do not find evidence supporting the underpricing hypothesis. Instead, we find that convertibles have relatively large positive gammas. As a typical convertible arbitrage strategy employs delta-neutral hedging, a large positive gamma can make the portfolio highly profitable, especially for a large movement in the underlying stock price. (shrink)

Here is a puzzle about aesthetic education. In a variety of contexts, we commit significant time, energy, and resources to aesthetic education. We teach (and in many cases publicly subsidize) university courses and degrees that have aesthetic education as their primary aim; we also invest public resources into museums, including enrichment programs that are also designed to afford aesthetic education. It would seem that if our commitment to aesthetic education is rational, then aesthetic appreciation is something that can be done (...) better or worse. However, we also, in a variety of contexts (oddly enough, some of them being the same sorts of contexts that are designed to abet aesthetic education), act as if it is true that there is no disputing taste. We may try to persuade students to come around to particular judgments, but we do not penalize students for judging one way or another. The aim of this paper is to dissolve the apparent puzzle of aesthetic education by clarifying its aims and advancing a conception of it that deemphasizes the role of taste. I claim that, pace “the default view of aesthetic education” (as I shall call it), the primary purpose of aesthetic education is not to educate taste. It is, rather, to facilitate the development of certain perceptual-cognitive capacities so as to enhance aesthetic experience and improve aesthetic appreciation. Thus, I call the view of aesthetic education advanced here “a perceptual-cognitive model”. (shrink)

A standard art-ontological position is to construe repeatable artworks as abstract objects that admit multiple concrete instances. Since photographic artworks are putatively repeatable, the ontology of photographic art is by default modelled after standard repeatable-work ontology. I argue, however, that the construal of photographic artworks as abstracta mistakenly ignores photography’s printmaking genealogy, specifically its ontological inheritance. More precisely, I claim that the products of printmaking media (prints) minimally must be construed in a manner consistent with basic print ontology, the (...) most plausible model of which looks decidedly nominalist (what I call the relevant similarity model) and that as such, photographic artworks must be likewise construed, not as abstracta but as individual and distinct concreta. That is, the correct ontological account of photographic art must be one according to which photographic artworks are individual and distinct concrete artworks. In the end, I show that the ontology of photographic art resists the standard repeatable-work model because the putative repeatability of photographic artworks is upon closer inspection nothing more than the relevant similarity relation between individual and distinct photographic prints. (shrink)

In this dissertation I develop a pluralist theory of actual causation. I argue that we need to distinguish between total, path-changing, and contributing actual causation. The pluralist theory accounts for a set of example cases that have raised problems for extant unified theories and it is supported by considerations about the various functions of causal concepts. The dissertation also analyses the context-sensitivity of actual causation. I show that principled accounts of causal reasoning in legal inquiry face limitations and I argue (...) that the context-sensitivity of actual causation is best represented by a distinction between default and deviant states in causal models. (shrink)

Human embryo models formed from stem cells—known as embryoids—allow scientists to study the elusive first stages of human development without having to experiment on actual human embryos. But clear ethical guidelines for research involving embryoids are still lacking. Previously, a handful of researchers put forward new recommendations for embryoids, which they hope will be included in the next set of International Society for Stem Cell Research guidelines. Although these recommendations are an improvement over the default approach, they are (...) nonetheless unworkable, because they rely on a poorly conceived notion of an embryoid’s ‘potential’ to trigger stringent research regulations. (shrink)

Our experiences with the external world are possible mainly through vision, hearing, taste, touch, and smell providing us a sense of reality. How the brain is able to seamlessly integrate stimuli from our external and internal world into our sense of reality has yet to be adequately explained in the literature. We have previously proposed a three-dimensional unified model of consciousness that partly explains the dynamic mechanism. Here we further expand our model and include illustrations to provide a better conception (...) of the ill-defined space within the self, providing insight into a unified mind-body concept. In this article, we propose that our senses “super-impose” on an existing dynamic space within us after a slight, imperceptible delay. The existing space includes the entire intrapersonal space and can also be called the “the body’s internal 3D default space”. We provide examples from meditation experiences to help explain how the sense of ‘self’ can be experienced through meditation practice associated with underlying physiological processes that take place through cardio-respiratory synchronization and coherence that is developed among areas of the brain. Meditation practice can help keep the body in a parasympathetic dominant state during meditation, allowing an experience of inner ‘self’. Understanding this physical and functional space could help unlock the mysteries of the function of memory and cognition, allowing clinicians to better recognize and treat disorders of the mind by recommending proven techniques to reduce stress as an adjunct to medication treatment. (shrink)

AI companies are racing to create artificial general intelligence, or “AGI.” If they succeed, the result will be human-level AI systems that can independently pursue high-level goals by formulating and executing long-term plans in the real world. Leading AI researchers agree that some of these systems will likely be “misaligned”–pursuing goals that humans do not desire. This goal mismatch will put misaligned AIs and humans into strategic competition with one another. As with present-day strategic competition between nations with incompatible goals, (...) the result could be violent and catastrophic conflict. Existing legal institutions are unprepared for the AGI world. New foundations for AGI governance are needed, and the time to begin laying them is now, before the critical moment arrives. -/- This Article begins to lay those new legal foundations. It is the first to think systematically about the dynamics of strategic competition between humans and misaligned AGI. The Article begins by showing, using formal game-theoretic models, that, by default, humans and AIs will be trapped in a prisoner’s dilemma. Both parties’ dominant strategy will be to permanently disempower or destroy the other, even though the costs of such conflict would be high. -/- The Article then argues that a surprising legal intervention could transform the game theoretic equilibrium and avoid conflict: AI rights. Not just any AI rights would promote human safety. Granting AIs the right not to be needlessly harmed–as humans have granted to certain non-human animals–would, for example, have little effect. Instead, to promote human safety, AIs should be given those basic private law rights–to make contracts, hold property, and bring tort claims–that law already extends to non-human corporations. Granting AIs these economic rights would enable long-run, small-scale, mutually-beneficial transactions between humans and AIs. This would, we show, facilitate a peaceful strategic equilibrium between humans and AIs for the same reasons economic interdependence tends to promote peace in international relations. Namely, the gains from trade far exceed those from war. Throughout, we argue that human safety, rather than AI welfare, provides the right framework for developing AI rights. This Article explores both the promise and the limits of AI rights as a legal tool for promoting human safety in an AGI world. (shrink)

One challenge in providing an adequate definition of physical disability is unifying the heterogeneous bodily conditions that count as disabilities. We examine recent proposals by Elizabeth Barnes (2016), and Dana Howard and Sean Aas (2018), and show how this debate has reached an impasse. Barnes’ account struggles to deliver principled unification of the category of disability, whilst Howard and Aas’ account risks inappropriately sidelining the body. We argue that this impasse can be broken using a novel concept: marginalised functioning. Marginalised (...) functioning concerns the relationship between a person’s bodily capacities and their social world: specifically, their ability to function in line with the default norms about how people can typically physically function that influence the structuring of social space. We argue that attending to marginalised functioning allows us to develop, not one, but three different models of disability, all of which—whilst having different strengths and weaknesses—unify the category of disability without sidelining the body. (shrink)

Families play an essential role in deceased organ procurement. As the person cannot directly communicate his or her wishes regarding donation, the family is often the only source of information regarding consent or refusal. We provide a systematic description and analysis of the different roles the family can play, and actions the family can take, in the organ procurement process across different jurisdictions and consent systems. First, families can inform or update healthcare professionals about a person’s donation wishes. Second, families (...) can authorize organ procurement in the absence of deceased’s preferences and the default is not to remove organs, and oppose donation where there is no evidence of preference but the default is to presume consent; in both cases, the decision could be based on their own wishes or what they think the deceased would have wanted. Finally, families can overrule the known wishes of the deceased, which can mean preventing donation, or permitting donation when the deceased refused it. We propose a schema of 4 levels on which to map these possible family roles: no role, witness, surrogate, and full decisional authority. We conclude by mapping different jurisdictions onto this schema to provide a more comprehensive understanding of the consent system for organ donation and some important nuances about the role of families. This classificatory model aims to account for the majority of the world’s consent systems. It provides conceptual and methodological guidance that can be useful to researchers, professionals, and policymakers involved in organ procurement. (shrink)

Wars are large-scale conflicts between organized groups of belligerents, which involve suffering, devastation, and brutality unlike almost anything else in human experience. Whatever one’s other beliefs about morality, all should agree that the horrors of war are all but unconscionable, and that warfare can be justified only if we have some compel- ling account of what is worth fighting for, which can justify contributing, as individu- als and as groups, to this calamitous endeavour. Although this question should obviously be central (...) to both philosophical and politi- cal discussion about war, it is at the forefront of neither. In recent years, philosophical discussion of warfare has bloomed, but the debate has focused on whom we may kill, on the assumption that our aims are justified.1 Political debate, meanwhile, is more concerned with matters of prudence, international law, and public justification, than with reassessing what is worth fighting for. For wars of intervention to halt or prevent massive humanitarian crises, this gap is not so troubling. When warfare is the only means to prevent the mass killing or enslavement of the innocent, the purposes of military force are clear enough (though undoubtedly many other problems remain). The problem is more pressing, how- ever, for the justification of national defence.3 Although common-sense morality and international law view national defence as the paradigm case of justified warfare, grounding this consensus is surprisingly difficult.4 We typically believe that any state is justified in using lethal force to protect its territory against any form of uninvited military incursion by any other state. And yet we lack a good argument to explain why this should be so. In this chapter, I explain why one familiar and otherwise plausible approach to the justification of killing in war cannot adequately ground common-sense views of permissible national defence.5 Reductionists believe that justified warfare reduces to an aggregation of acts that are justified under ordinary principles of interpersonal morality.6 The standard form of reductionism focuses on the principles governing killing in ordinary life, specifically those that justify intentional killing in self- and other-defence, and unintended but foreseen (for short, collateral) killing as a lesser evil. Justified warfare, on this view, is no more than the coextension of multiple acts justified under these two principles. Reductionism is the default philosophical approach to thinking through the ethics of killing in war. It makes perfect sense to ask what principles govern permissible kill- ing in general, before applying them to the particular context of war. If it cannot deliver a plausible set of conclusions about when national defence is permitted, then we must either revise our beliefs about which conclusions count as plausible, or else face the significant challenge of developing a different theoretical model for justifying war- fare—an exceptionalist model, which views war as an exception to the regular moral landscape, to which principles apply which apply to nothing else but war.7 We must show, in other words, that there is something worth fighting for in wars of national defence, which is not engaged when we use force in any other context. The chapter proceeds as follows. Section 2.2 sets out the argument against reduc- tionism.8 Section 2.3 considers and rebuts one common response to the argument, which has often been thought sufficient grounds to disregard its conclusion. Section 2.4 then asks whether a modified reductionism would survive unscathed by the argu- ment. Finally, section 2.5 sets out some desiderata on a plausible exceptionalist alterna- tive. Section 2.6 concludes. (shrink)

This article presents a new argument for incorporating a distinction between default and deviant values into the formalism of causal models. The argument is based on considerations about how causal reasoners should represent disagreement over causes, and it is defended against an objection that has been raised against earlier arguments for defaults.

Semantic information is usually supposed to satisfy the veridicality thesis: p qualifies as semantic information only if p is true. However, what it means for semantic information to be true is often left implicit, with correspondentist interpretations representing the most popular, default option. The article develops an alternative approach, namely a correctness theory of truth (CTT) for semantic information. This is meant as a contribution not only to the philosophy of information but also to the philosophical debate on the (...) nature of truth. After the introduction, in Sect. 2, semantic information is shown to be translatable into propositional semantic information (i). In Sect. 3, i is polarised into a query (Q) and a result (R), qualified by a specific context, a level of abstraction and a purpose. This polarization is normalised in Sect. 4, where [Q + R] is transformed into a Boolean question and its relative yes/no answer [Q + A]. This completes the reduction of the truth of i to the correctness of A. In Sects. 5 and 6, it is argued that (1) A is the correct answer to Q if and only if (2) A correctly saturates Q by verifying and validating it (in the computer science’s sense of verification and validation ); that (2) is the case if and only if (3) [Q + A] generates an adequate model (m) of the relevant system (s) identified by Q; that (3) is the case if and only if (4) m is a proxy of s (in the computer science’s sense of proxy ) and (5) proximal access to m commutes with the distal access to s (in the category theory’s sense of commutation ); and that (5) is the case if and only if (6) reading/writing (accessing, in the computer science’s technical sense of the term) m enables one to read/write (access) s. Sect. 7 provides some further clarifications about CTT, in the light of semantic paradoxes. Section 8 draws a general conclusion about the nature of CTT as a theory for systems designers not just systems users. In the course of the article all technical expressions from computer science are explained. (shrink)

While the epistemic significance of disagreement has been a popular topic in epistemology for at least a decade, little attention has been paid to logical disagreement. This monograph is meant as a remedy. The text starts with an extensive literature review of the epistemology of (peer) disagreement and sets the stage for an epistemological study of logical disagreement. The guiding thread for the rest of the work is then three distinct readings of the ambiguous term ‘logical disagreement’. Chapters 1 and (...) 2 focus on the Ad Hoc Reading according to which logical disagreements occur when two subjects take incompatible doxastic attitudes toward a specific proposition in or about logic. Chapter 2 presents a new counterexample to the widely discussed Uniqueness Thesis. Chapters 3 and 4 focus on the Theory Choice Reading of ‘logical disagreement’. According to this interpretation, logical disagreements occur at the level of entire logical theories rather than individual entailment-claims. Chapter 4 concerns a key question from the philosophy of logic, viz., how we have epistemic justification for claims about logical consequence. In Chapters 5 and 6 we turn to the Akrasia Reading. On this reading, logical disagreements occur when there is a mismatch between the deductive strength of one’s background logic and the logical theory one prefers (officially). Chapter 6 introduces logical akrasia by analogy to epistemic akrasia and presents a novel dilemma. Chapter 7 revisits the epistemology of peer disagreement and argues that the epistemic significance of central principles from the literature are at best deflated in the context of logical disagreement. The chapter also develops a simple formal model of deep disagreement in Default Logic, relating this to our general discussion of logical disagreement. The monograph ends in an epilogue with some reflections on the potential epistemic significance of convergence in logical theorizing. (shrink)

I argue that moral principles involve the same sort of generalization as ordinary yet elusive generic generalizations in natural language such as ‘Tigers are striped’ or ‘Peppers are spicy’. A notable advantage of the generic view is that it simultaneously allows for pessimism and optimism about the role and status of moral principles in our lives. It provides a new perspective on the nature of moral principles on which principles are not apt for determining the moral status of particular actions (...) while they may be apt, and even fundamental, to our acquisition of moral knowledge. A natural consequence of the view is variation among moral principles, with some regularly warranting exceptions and some appearing arguably exceptionless. I will also argue that this generic conception of moral principles has significant advantages, as a normative model of moral reasoning, over the view of moral principles as defaults advanced in recent years. (shrink)

We propose a typology of representational artifacts for health care and life sciences domains and associate this typology with different kinds of formal ontology and logic, drawing conclusions as to the strengths and limitations for ontology in a description logics framework. The four types of domain representation we consider are: (i) lexico-semantic representation, (ii) representation of types of entities, (iii) representations of background knowledge, and (iv) representation of individuals. We advocate a clear distinction of the four kinds of representation in (...) order to provide a more rational basis for using ontologies and related artifacts to advance integration of data and enhance interoperability of associated reasoning systems. We highlight the fact that only a minor portion of scientifically relevant facts in a domain such as biomedicine can be adequately represented by formal ontologies as long as the latter are conceived as representations of entity types. In particular, the attempt to encode default or probabilistic knowledge using ontologies so conceived is prone to produce unintended, erroneous models. (shrink)

This paper presents a Least Square Monte Carlo approach for accurately calculating credit value adjustment (CVA). In contrast to previous studies, the model relies on the probability distribution of a default time/jump rather than the default time itself, as the default time is usually inaccessible. As such, the model can achieve a high order of accuracy with a relatively easy implementation. We find that the valuation of a defaultable derivative is normally determined via backward induction when their (...) payoffs could be positive or negative. Moreover, the model can naturally capture wrong or right way risk. (shrink)

Synthetic biology is described as a new field of biotechnology that models itself on engineering sciences. However, this view of synthetic biology as an engineering field has received criticism, and both biologists and philosophers have argued for a more nuanced and heterogeneous understanding of the field. This paper elaborates the heterogeneity of synthetic biology by clarifying the role of design and the variability of design methodologies in synthetic biology. I focus on two prominent design methodologies: rational design and directed (...) evolution. Rational design resembles the design methodology of traditional engineering sciences. However, it is often replaced and complemented by the more biologically-inspired method of directed evolution, which models itself on natural evolution. These two approaches take philosophically different stances to the design of biological systems. Rational design aims to make biological systems more machine-like, whereas directed evolution utilizes variation and emergent features of living systems. I provide an analysis of the methodological basis of these design approaches, and highlight important methodological differences between them. By analyzing the respective benefits and limitations of these approaches, I argue against the engineering-dominated conception of synthetic biology and its “methodological monism”, where the rational design approach is taken as the default design methodology. Alternative design methodologies, like directed evolution, should be considered as complementary, not competitive, to rational design. (shrink)

This article presents a generic model for pricing financial derivatives subject to counterparty credit risk. Both unilateral and bilateral types of credit risks are considered. Our study shows that credit risk should be modeled as American style options in most cases, which require a backward induction valuation. To correct a common mistake in the literature, we emphasize that the market value of a defaultable derivative is actually a risky value rather than a risk-free value. Credit value adjustment (CVA) is also (...) elaborated. A practical framework is developed for pricing defaultable derivatives and calculating their CVAs at a portfolio level. (shrink)

Addressing concerns about the treatment of psychopaths, Grant Gillett and Flora Huang (2013) argue that we ought to accept a relational or holistic view of psychopathy and APSD rather than the default biomedical-deficit model since the latter “obscures moral truths about the psychopath”. This change in approach to the psychopath will both mitigate at least some of their moral responsibility for the harms they cause, and force communities to incur special obligations, so they claim, because the harms endured by (...) psychopaths will be understood as part of the cause for the harms they are guilty of committing. However, as I will argue, even if we accept that a relational or holistic approach is better suited to understand psychopathy (which is itself contentious), it does not follow that their responsibility is mitigated in a way that causes communities to have special obligations to them as Gillett and Huang suggest. A diagnosis of APSD or psychopathy does not, prima facie, exculpate an agent or suggest a different way of treating them. My discussion will focus on the widely accepted excusing conditions one must meet for responsibility to me mitigated and conclude, contra Gillett and Huang, that psychopaths are no different from you or I with regards to having a causal history that leads to action. Outside forces play a role in all of our behavior. If the psychopath is owed anything because of the way they have come to understand the world then we all are owed that same debt. (shrink)

This article presents a new model for valuing financial contracts subject to credit risk and collateralization. Examples include the valuation of a credit default swap (CDS) contract that is affected by the trilateral credit risk of the buyer, seller and reference entity. We show that default dependency has a significant impact on asset pricing. In fact, correlated default risk is one of the most pervasive threats in financial markets. We also show that a fully collateralized CDS is (...) not equivalent to a risk-free one. In other words, full collateralization cannot eliminate counterparty risk completely in the CDS market. (shrink)

The incremental risk charge (IRC) is a new regulatory requirement from the Basel Committee in response to the recent financial crisis. Notably few models for IRC have been developed in the literature. This paper proposes a methodology consisting of two Monte Carlo simulations. The first Monte Carlo simulation simulates default, migration, and concentration in an integrated way. Combining with full re-valuation, the loss distribution at the first liquidity horizon for a subportfolio can be generated. The second Monte Carlo (...) simulation is the random draws based on the constant level of risk assumption. It convolutes the copies of the single loss distribution to produce one year loss distribution. The aggregation of different subportfolios with different liquidity horizons is addressed. Moreover, the methodology for equity is also included, even though it is optional in IRC. (shrink)

This paper presents an analytical model for valuing interest rate swaps, subject to bilateral counterparty credit risk. The counterparty defaults are modeled by the reduced-form model as the first jump of a time-inhomogeneous Poisson process. All quantities modeled are market-observable. The closed-form solution gives us a better understanding of the impact of the credit asymmetry on swap value, credit value adjustment, swap rate and swap spread.

Objectives To increase postmortem organ donation rates, several countries are adopting an opt-out (presumed consent) policy, meaning that individuals are deemed donors unless they expressly refused so. Although opt-out countries tend to have higher donation rates, there is no conclusive evidence that this is caused by the policy itself. The main objective of this study is to better assess the direct impact of consent policy defaults per se on deceased organ recovery rates when considering the role of the family in (...) the decision-making process. This study does not take into account any indirect effects of defaults, such as potential psychological and behavioural effects on individuals and their relatives. -/- Design Based on previous work regarding consent policies, we created a conceptual model of the decision-making process for deceased organ recovery that included any scenario that could be directly influenced by opt-in or opt-out policies. We then applied this model to internationally published data of the consent process to determine how frequently policy defaults could apply. -/- Main outcome measures We measure the direct impact that opt-in and opt-out policies have per se on deceased organ recovery. -/- Results Our analysis shows that opt-in and opt-out have strictly identical outcomes in eight out of nine situations. They only differ when neither the deceased nor the family have expressed a preference and defaults therefore apply. The direct impact of consent policy defaults is typically circumscribed to a range of 0%–5% of all opportunities for organ recovery. Our study also shows that the intervention of the family improves organ retrieval under opt-in but hinders it under opt-out. -/- Conclusions This study may warn policy makers that, by emphasising the need to introduce presumed consent to increase organ recovery rates, they might be overestimating the influence of the default and underestimating the power granted to families. (shrink)

Universal Basic Income (UBI) has been proposed as a potential way in which welfare states could be made more responsive to the ever-shifting evolutionary challenges of institutional adaptation in a dynamic environment. It has been proposed as a tool of “real freedom” (Van Parijs) and as a tool of making the welfare state more efficient. (Friedman) From the point of view of complexity theory and evolutionary economics, I argue that only a welfare state model that is “polycentrically” (Polanyi, Hayek) organized (...) as an evolving network of distributed decision-making can respond to the challenges of complexity in an adaptively efficient manner. UBI has the theoretical possibility to facilitate flexible, bottom-up innovation, since a) it embodies the “rule of law” principles of generality, nondiscrimination, simplicity, and transparency, and b) it grants people widespread freedom to experiment, innovate, and deviate from established practices and norms; but whether it can be made to work as intended depends on a number of variables in its design. I situate my research in the contemporary UBI debate around automation and technological development, which I interpret creatively through the lens of contemporary evolutionary political economy. I advance a syncretic model of institutional design based upon the shared insights of the Santa Fe, Neo-Hayekian, and Neo-Schumpeterian schools of evolutionary economics that, following Adam Thierer and Michael Munger, I call the framework of Permissionless Innovation (PI). Under the PI framework, which is a development of the tradition of evolutionary liberalism (Hume, Smith, Mandeville, Mill, Hayek, Polanyi, Schumpeter, Hodgson), individuals are granted the default right to innovate without having to ask for permission, and the right to basic income, which they can use to support their right to innovate, mutate, and experiment. This framework is a liberal framework to the extent it relies on widespread human freedom as a means of fostering innovation and social learning. And it is an evolutionary framework to the extent that it seeks to facilitate evolutionary socioeconomic processes for the sake of social progress and welfare advancement. I proceed to show, through an analysis of how innovation operates in both the economy and the cultural domain, that UBI can be used as an important cornerstone of an evolutionary liberal model of “ecostructural” governance that treats the socioeconomic order as an ecological garden of spontaneous growths, adaptations, and innovations. I call this the Permissionless Innovation Universal Basic Income (PIUBI) framework. In it, the right to innovate, deviate, and mutate is upheld as the “gold standard” of institutional design whereby individuals are granted widespread freedoms combined with the provision of UBI and other innovation-fostering (carefully bound) services and regulations. In the coming decades, UBI may even enable poor people to take better advantage of Human Enhancement Technologies (HETs) and other experimental innovations. Such a framework is compatible with a fast pace of evolutionary development, but the regulatory model accompanying such a framework must be capable of responding to evolutionary lock-ins, maladaptive innovations, self-destructive behaviour on the part of UBI recipients, and the management of catastrophic and existential risks. In the end, I will have shown that the PIUBI framework can be justified as a plausible default institutional mechanism for responding to radical uncertainty, but it needs to be experimentally adapted to changing circumstances with the help of various situation-specific, polycentric, multi-level, approaches. (shrink)

Recent fndings illustrate how changes in consciousness accommodated by neural correlates and plasticity of the brain advance a model of perceptual change as a function of meditative practice. During the mindbody response neural correlates of changing awareness illustrate how the autonomic nervous system shifts from a sympathetic dominant to a parasympathetic dominant state. Expansion of awareness during the practice of meditation techniques can be linked to the Default Mode Network (DMN), a network of brain regions that is active when (...) the one is not focused on the outside world and the brain is restful yet awake (Chen et al., 2008). A model is presented illustrating the dynamic mindbody response before and after mindfulness meditation, and connections are made with prefrontal cortex activity, the cardiac and respiratory center, the thalamus and amygdala, the DMN and cortical function connectivity. The default status of the DMN changes corresponding to autonomic modulation resulting from meditation practice. (shrink)

This dissertation is a contribution to the field of empirically informed metaethics, which combines the rigorous conceptual clarity of traditional metaethics with a careful review of empirical evidence. More specifically, this work stands at the intersection of moral psychology, moral epistemology, and philosophy of action. The study comprises six chapters on three distinct (although related) topics. Each chapter is structured as an independent paper and addresses a specific open question in the literature. The first part concerns the psychological features and (...) cognitive function of moral intuition. Chapter 1 (“Moral intuition, strength, and metacognition”) is focused on the concept of intuitive strength, which is one of the defining features of moral intuition. I provide a metacognitive account of intuitive strength and show why such a view is preferable to emotional or quasi-perceptual accounts. Then, in Chapter 2 (“Dual process reflective equilibrium”), I will discuss the interplay between intuition and reflection in moral reasoning. I will contend that the influential “default-interventionist” model of reasoning, theorized by Greene, is insufficiently supported by the evidence. In light of some recent studies, I outline an account of moral reasoning in which intuition and reflection are not in conflict but cooperate to reach a reflective goal. I call this model dual process reflective equilibrium. The aim of the first part is descriptive, i.e., it argues for an accurate understanding of moral intuition and reasoning in light of the available empirical evidence. In contrast, the second part addresses a normative question: is a subject epistemically justified in forming a belief on the basis of a moral intuition? Skeptics of moral intuition argue that accepting moral intuitions should be the exception rather than the rule to the extent that epistemically defective processes determine the content of moral intuitions. Chapter 3 (“Moral intuitionism and the reliability challenge”) introduces the recent empirical challenges to the reliability of moral intuitions and elaborates a promising strategy for defending intuitionism. In short, I consider whether subjects can track the reliability of their intuitions with their confidence. In Chapter 4 (“The argument from limited cognitive resources”), I evaluate a different strategy to defend moral intuitionism. Specifically, I develop an argument according to which accepting moral intuitions is legitimate because it is the most rational option that a subject has, given her limited resources. The third and final part of the dissertation concerns the role of moral intuitions in action. The influence of automatic processes on moral conduct raises different challenges to moral philosophy. The first challenge is to explain how a subject can be motivated by certain values without the mental effort of deliberation. Chapter 5 (“Caring, moral motivation, and automatic conduct”) tackles this issue. Chapter 6 (“Moral sensitivity as skillful automaticity”) aims to explain how moral agents can be sensitive to good reasons through automatic mental processes. (shrink)

This paper presents a new model for valuing hybrid defaultable financial instruments, such as, convertible bonds. In contrast to previous studies, the model relies on the probability distribution of a default jump rather than the default jump itself, as the default jump is usually inaccessible. As such, the model can back out the market prices of convertible bonds. A prevailing belief in the market is that convertible arbitrage is mainly due to convertible underpricing. Empirically, however, we do (...) not find evidence supporting the underpricing hypothesis. Instead, we find that convertibles have relatively large positive gammas. As a typical convertible arbitrage strategy employs delta-neutral hedging, a large positive gamma can make the portfolio highly profitable, especially for a large movement in the underlying stock price. (shrink)

This paper attempts to assess the economic significance and implications of collateralization in different financial markets, which is essentially a matter of theoretical justification and empirical verification. We present a comprehensive theoretical framework that allows for collateralization adhering to bankruptcy laws. As such, the model can back out differences in asset prices due to collateralized counterparty risk. This framework is very useful for pricing outstanding defaultable financial contracts. By using a unique data set, we are able to achieve a clean (...) decomposition of prices into their credit risk factors. We find empirical evidence that counterparty risk is not overly important in credit-related spreads. Only the joint effects of collateralization and credit risk can sufficiently explain unsecured credit costs. This finding suggests that failure to properly account for collateralization may result in significant mispricing of financial contracts. We also analyze the difference between cleared and OTC markets. (shrink)

Abstract. The main current approach to the AI safety is AI alignment, that is, the creation of AI whose preferences are aligned with “human values.” Many AI safety researchers agree that the idea of “human values” as a constant, ordered sets of preferences is at least incomplete. However, the idea that “humans have values” underlies a lot of thinking in the field; it appears again and again, sometimes popping up as an uncritically accepted truth. Thus, it deserves a thorough deconstruction, (...) which I will do by listing and analyzing comprehensively the hidden assumptions of the idea that “humans have values.” This deconstruction of human values will be centered around the following ideas: “Human values” are useful descriptions, but not real objects; “human values” are bad predictors of behavior; the idea of a “human value system” has flaws; “human values” are not good by default; and human values cannot be separated from human minds. The method of analysis is listing hidden assumptions on which the idea of “human values” is built. I recommend that either the idea of “human values” should be replaced with something better for the goal of AI safety, or at least be used very cautiously. The approaches to AI safety which don’t use the idea of human values at all may require more attention, like the use of full brain models, boxing, and capability limiting. (shrink)

The studies of ethics had long been under-dealt although it is the kind of primary in sustaining a civility. It is hardly deniable that the concept of efficiency and productivity has hailed on the mindedness and interest of academic community. The narrative of ethics or social justice would be ridiculed as the kind of Greek juggle on philosophy or put to be on neglect for its lacking or default on the modern disciplinary frame in the academics. A cure, however, (...) seems not to be from a juggernaut of modern capitalistic civilization and its supportive paradigm of understanding so that alternative way for any more realistic solution can be made exploitative from the ethics or similar tools of motivation. Now we talk about noblesse oblige or benevolent capitalism as one important dose for the new paradigm of social promise or reformed capitalism. The ethics studies have increasingly made its way as focused in the discipline of business and public administration. Typically, it is profiled in combination of leadership studies, and the civility tends to accept this narrative, beyond the liberal competition and fairness school, as one of important element when we consider the concept of social justice. The modern professionals, for example, bar members, medical doctors, and many of licensees for their business operation, also clone to carry their responsibility under a specific ethical code. This would be the kind of safety code from the abusive or madly profit-driven capitalism. More importantly, I believe that a sheer understanding of ethics and social justice would be assets and equipment for the ruling class in the contemporary society. In this context, the paper would survey an ethical theory or decision making model, history of Korea as well as a recent episode involving the chief prosecutor of South Korea. Korean leadership, typically for the powerful cores or inner circle princelings, can be revisited in purview of ethics studies, such as Cooper‟s design and ethical decision making model. (shrink)

Coherence and correspondence are classical contenders as theories of truth. In this paper we examine them instead as interacting factors in the dynamics of belief across epistemic networks. We construct an agent-based model of network contact in which agents are characterized not in terms of single beliefs but in terms of internal belief suites. Individuals update elements of their belief suites on input from other agents in order both to maximize internal belief coherence and to incorporate ‘trickled in’ elements of (...) truth as correspondence. Results, though often intuitive, prove more complex than in simpler models (Hegselmann & Krause 2002, 2006; Grim, Singer, Reade & Fisher 2015). The optimistic finding is that pressures toward internal coherence can exploit and expand on small elements of truth as correspondence is introduced into epistemic networks. Less optimistic results show that pressures for coherence can also work directly against the incorporation of truth, particularly when coherence is established first and new data is introduced later. (shrink)

We start with an observation about implicit quantifier domain restriction: certain implicit restrictions (e.g., restricting objects by location and time) appear to be more natural and widely available than others (e.g., restricting objects by color, aesthetic, or historical properties). Our aim is to explain why this is. That is, we aim to explain why some implicit domain restriction possibilities are available by default. We argue that, regardless of their other explanatory virtues, extant pragmatic and metasemantic frameworks leave this question (...) unanswered. We then motivate a partially nativist account of domain restriction that involves a minimal view of joint planning around broad shared goals about navigating and influencing our environments augmented with cognitive heuristics that facilitate these. Finally, we sketch how the view can be extended to account for the ways non-default restriction possibilities become available when conversationalists have shared idiosyncratic goals. (shrink)

Relationship between default semantics and modularity of mind (in particular mind reading through the principle of Relevance).

Default positions, predetermined starting points that aid in complex decision-making, are common in clinical medicine. In this article, we identify and critically examine common default positions in clinical ethics practice. Whether default positions ought to be held is an important normative question, but here we are primarily interested in the descriptive, rather than normative, properties of default positions. We argue that default positions in clinical ethics function to protect and promote important values in medicine—respect for (...) persons, utility, and justice. Further, default positions in clinical ethics may also guard against harm. Where default positions exist, there are epistemic burdens to overturn them. The person wishing to reject the default position, rather than the person endorsing it, bears this burden. The person who bears the burden of meeting the epistemic requirements must provide evidence proportional to the degree of harm the default position protects against. Default positions that protect against significant harm impose significant epistemic requirements to overturn. This asymmetry not only makes medical decision-making more economical but also serves to promote and protect certain values. The identification and analysis of common and recognizable default positions can help to identify other default positions and the conditions under which their associated epistemic requirements are met. The article concludes with considerations of potential problems with the use of default positions in clinical ethics. (shrink)

Does the capacity to think require the capacity to sense? A lively debate on this topic runs throughout the history of philosophy and now animates discussions of artificial intelligence. Many have argued that AI systems such as large language models cannot think and understand if they lack sensory grounding. I argue that thought does not require sensory grounding: there can be pure thinkers who can think without any sensory capacities. As a result, the absence of sensory grounding does not (...) entail that large language models cannot think or understand. I also consider to what extent quasi-sensory grounding can at least boost the performance of a language model. (shrink)