Lack of a historical sense is the hereditary defect of philosophers. … So what is needed from now on is historical philosophizing, and with it the virtue of modesty.

Ratio, Volume 34, Issue 4, Page 303-311, December 2021.

This paper presents a new model for pricing OTC derivatives subject to collateralization. It allows for collateral posting adhering to bankruptcy laws. As such, the model can back out the market price of a collateralized contract. This framework is very useful for valuing outstanding derivatives. Using a unique dataset, we find empirical evidence that credit risk alone is not overly important in determining credit-related spreads. Only accounting for both collateral arrangement 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 derivatives. We also empirically gauge the impact of collateral agreements on risk measurements. Our findings indicate that there are important interactions between market and credit risk. (shrink)

Hans Kelsen's thorough critique of Eric Voegelin's "New Science of Politcs" is - in my oppinion - the best commentary on Voegelin that has been written so far.

Both motivational internalism and externalism need to explain why sometimes moral judgments tend to motivate us. In this paper, I argue that Dreier’ second-order desire model cannot be a plausible externalist alternative to explain the connection between moral judgments and motivation. I explain that the relevant second-order desire is merely a constitutive requirement of rationality because that desire makes a set of desires more unified and coherent. As a rational agent with the relevant second-order desire is disposed towards coherence, she (...) will have some motivation to act in accordance with her moral judgments. Dreier’s second-order desire model thus collapses into a form of internalism and cannot be a plausible externalist option to explain the connection between moral judgments and motivation. (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)

In this thesis, I explore motivational internalism and externalism, which concern the relationship between moral judgments and motivation. I first introduce the basic terms and different forms of internalism and externalism, including the externalist objections to internalism based on the famous counterexamples. I then argue against externalism by defending and developing Michael Smith’s fetishism argument. I not only respond to the externalist objections to the fetishism argument but also further argue against different externalist explanations of moral motivation that intend to (...) avoid the fetishism charge. Finally, I re-examine different forms of internalism in order to argue for a new form of internalism that can better preserve our internalist intuitions whilst accommodating the externalist counterexamples. My ultimate conclusion will be that the most plausible form of internalism to accept is constitutional, unconditional, relatively strong, direct internalism that is formulated in terms of dispositional desires. (shrink)

Equity-linked securities with a guaranteed return become popular in a volatile market environment. This paper presents a new model for valuing guaranteed equity-linked notes. We consider a security whose value depends on the performance of a basket of equities averaged over certain points in time, but that is floored by a guaranteed amount. We show that the security’s price is given by the sum of the guaranteed amount plus the price of an Asian style option on the basket above. The (...) model provides analytical formulas for the security’s price as well as for corresponding hedge ratios; these respective formulas appear to be accurate over a wide range of underlying security parameter values, based on numerical testing against a Monte Carlo benchmark, Finally, we apply our method to value a type of segregated fund with a maturity guarantee. (shrink)

Some stories of moral exemplars motivate us to emulate their admirable attitudes and behaviors, but why do some exemplars motivate us more than others? We systematically studied how motivation to emulate is influenced by the similarity between a reader and an exemplar in social or cultural background (Relatability) and how personally costly or demanding the exemplar’s actions are (Attainability). Study 1 found that university students reported more inspiration and related feelings after reading true stories about the good deeds of a (...) recent fellow alum, compared to a famous moral exemplar from decades past. Study 2A developed a battery of short moral exemplar stories that more systematically varied Relatability and Attainability, along with a set of non-moral exemplar stories for comparison. Studies 2B and 2C examined the path from the story type to relatively low stakes altruism (donating to charity and intentions to volunteer) through perceived attainability and relatability, as well as elevation and pleasantness. Together, our studies suggest that it is primarily the relatability of the moral exemplars, not the attainability of their actions, that inspires more prosocial motivation, at least regarding acts that help others at a relatively low cost to oneself. (shrink)

This article presents a new methodology for pricing and hedging commodity derivatives. A generic model calibration is provided. The calibration procedure consists of an offline step where the mean reversion rates, the ratio of the long and short factor volatilities and the correlation between the long and short factors are determined via historical analysis. This offline step is performed relatively infrequently. There’s also an online step of the calibration which happens every time the model is used to price an option (...) or to simulate price paths. Empirical study shows that the model is quite accurate. (shrink)

A combinatorial analysis of intrinsicality takes intrinsic properties to be independent of accompaniment: a property is intrinsic only if it is possible for a lonely or an accompanied thing to have it or lack it (I). Cameron argues that the combinatorial analysis in Langton & Lewis (1998) faces an epistemic circularity, which makes (I) suspicious. In this paper, I examine two approaches to free the combinatorial analyses from the circularity and find them all fail. Then I provide an outline of (...) an argument for (I) by appealing to the grounding analyses of intrinsicality, which shows an advantage of the grounding analyses over the combinatorial ones. (shrink)

Introduction: The development of advanced sewage technologies empowers the industry to produce high-quality recycled water, which greatly influences human’s life and health. Thus, this study investigates the mechanism of individuals’ adoption of recycled water from the technology adoption perspective. -/- Methods: Employing the mixed method of structural equation modeling and artificial neural network analysis, we examined a research model developed from the extended Unified Theory of Acceptance and Use of Technology (UTAUT2) framework. To examine the research model, this study employs (...) a leading web-survey company (Sojump) to collect 308 valid samples from the residents in mainland China. -/- Results: The structural equation modeling results verified the associations between the six predictors (performance expectancy, effort expectancy, social influence, facilitating conditions, environmental motivation, and price value), individuals’ cognitive and emotional attitudes, and acceptance intention. The artificial neural network analysis validates and complements the structural equation modeling results by unveiling the importance rank of the significant determinants of the acceptance decisions. -/- Discussion: The study provides theoretical implications for recycled water research and useful insights for practitioners and policymakers to reduce the environmental hazards of water scarcity. (shrink)

Radical democratic thinking is becoming intrigued by the material situatedness of its political agents and by the role of nonhuman participants in political interaction. At stake here is the displacement of narrow anthropocentrism that currently guides democratic theory and practice, and its repositioning into what we call ‘the nonhuman condition’. This Critical Exchange explores the nonhuman condition. It asks: What are the implications of decentering the human subject via a new materialist reading of radical democracy? Does this reading dilute political (...) agency? Or should this be seen, on the contrary, as an invitation for new voices and demands to enter into democratic assemblages? How might engagement with the more-than-human disrupt or extend theories of radical democracy? Hans Asenbaum and Amanda Machin discuss the human democratic subject both through radical democratic and new materialist lenses. They suggest that a new materialist decentred subject does not lose agency but further gains political responsibility in radical democracy. Jean-Paul Gagnon highlights the possibility of becoming through loss. In losing our anthropocentric arrogance—our understanding of being other and better than animal—we become more connected and discover our place in human-nonhuman assemblages. Melissa Orlie agrees that something can be gained through renouncing dominant human fantasies and presents a ‘radical democratic naturalism’. By renouncing land violence and acknowledging nature’s subjectivity, we can further nonexploitative radical democratic politics. This is where the notion of ‘tidalectic’ processes introduced by James L. Smith is helpful. Focusing on water and the Indigenous knowledges around rivers, he considers how democracy and community can be reimagined as plural, cyclical and attentive to the nonhuman with which the human is inevitably entangled. Diana Leong offers a different approach. Considering the nonhuman from the perspective of Black Studies demands an awareness to how blackness has long been constituted as non- or partially human. (shrink)

Plakias has recently argued that there is nothing wrong with publishing defences of philosophical claims which we don't believe and also nothing wrong with concealing our lack of belief, because an author's lack of belief is irrelevant to the merit of a published work. Fleisher has refined this account by limiting the permissibility of publishing without belief to what he calls ‘advocacy role cases’. I argue that such lack of belief is irrelevant only if it is the result of an (...) inexplicable incredulity or the result of a metaphilosophical or epistemic stance that is unrelated to the specific claim. However, in many real-life cases, including Fleisher's advocacy role cases, our doubts regarding the claims we defend arise from reasons that have something to do with the insufficiency of the philosophical evidence supporting the claim, and publishing an unconditional defence of a claim without revealing our doubts is impermissible as it involves withholding philosophically relevant reasons. Plakias has also argued that discouraging philosophers from publishing claims they don't believe would be unfair to junior philosophers with unsettled views. I propose that we should change our academic practices that pressure philosophers to publish articles that pretend to be defences of settled views. (shrink)

This article proposes a term structure model for dual-currency interest rate markets. The model assumes that volatility is a deterministic function of time alone. This volatility structure can reduce the dimension of the required state variables. An important special case is presented, which corresponds essentially to a Vasicek/Hull-White yield curve model in each currency. The model is very useful for pricing cross-currency derivatives.

Do we love for reasons? It can seem as if we do, since most cases of non‐familial love seem *selective*: coming to love a non‐family‐member often begins with our being drawn to them for what they are like. I argue, however, that we can vindicate love's selectivity, even if we maintain that there are no reasons for love; indeed, that gives us a simpler, and hence better, explanation of love's selectivity. We don't, in short, come to love *for* reasons. That (...) which seemed like evidence for thinking that there are reasons for love, then, turns out to militate against that view: how can these purported reasons be reasons for love, if they don't engender (in virtue of rationalizing) it? (shrink)

We explored the relationship between 24 character strengths measured by the Global Assessment of Character Strengths (GACS), which was revised from the original VIA instrument, and moral functioning comprising postconventional moral reasoning, empathic traits and moral identity. Bayesian Model Averaging (BMA) was employed to explore the best models, which were more parsimonious than full regression models estimated through frequentist regression, predicting moral functioning indicators with the 24 candidate character strength predictors. Our exploration was conducted with a dataset collected from 666 (...) college students at a public university in the Southern United States. Results showed that character strengths as measured by GACS partially predicted relevant moral functioning indicators. Performance evaluation results demonstrated that the best models identified by BMA performed significantly better than the full models estimated by frequentist regression in terms of AIC, BIC, and cross-validation accuracy. We discuss theoretical and methodological implications of the findings for future studies addressing character strengths and moral functioning. (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)

The LIBOR Market Model has become one of the most popular models for pricing interest rate products. It is commonly believed that Monte-Carlo simulation is the only viable method available for the LIBOR Market Model. In this article, however, we propose a lattice approach to price interest rate products within the LIBOR Market Model by introducing a shifted forward measure and several novel fast drift approximation methods. This model should achieve the best performance without losing much accuracy. Moreover, the calibration (...) is almost automatic and it is simple and easy to implement. Adding this model to the valuation toolkit is actually quite useful; especially for risk management or in the case there is a need for a quick turnaround. (shrink)

The present study aimed to develop effective moral educational interventions based on social psychology by using stories of moral exemplars. We tested whether motivation to engage in voluntary service as a form of moral behavior was better promoted by attainable and relevant exemplars or by unattainable and irrelevant exemplars. First, experiment 1, conducted in a lab, showed that stories of attainable exemplars more effectively promoted voluntary service activity engagement among undergraduate students compared with stories of unattainable exemplars and non-moral stories. (...) Second, experiment 2, a middle school classroom-level experiment with a quasi-experimental design, demonstrated that peer exemplars, who are perceived to be attainable and relevant to students, better promoted service engagement compared with historic figures in moral education classes. (shrink)

Although some previous studies have investigated the relationship between moral foundations and moral judgment development, the methods used have not been able to fully explore the relationship. In the present study, we used Bayesian Model Averaging (BMA) in order to address the limitations in traditional regression methods that have been used previously. Results showed consistency with previous findings that binding foundations are negatively correlated with post-conventional moral reasoning and positively correlated with maintaining norms and personal interest schemas. In addition to (...) previous studies, our results showed a positive correlation for individualizing foundations and post-conventional moral reasoning. Implications are discussed as well as a detailed explanation of the novel BMA method in order to allow others in the field of moral education to be able to use it in their own studies. (shrink)

In this paper, findings from research in neuroscience of morality will be reviewed to consider the purposes of moral education. Particularly, I will focus on two main themes in neuroscience, novel neuroimaging and experimental investigations, and Bayesian learning mechanism. First, I will examine how neuroimaging and experimental studies contributed to our understanding of psychological mechanisms associated with moral functioning while addressing methodological concerns. Second, Bayesian learning mechanism will be introduced to acquire insights about how moral learning occurs in human brains. (...) Based on the reviewed neuroscientific research on morality, I will examine how evidence can support the model of moral education proposed by virtue ethics, Neo-Aristotelian moral philosophy in particular. Particularly, two main aims of virtue ethics-based moral education, the habituation of virtues and the cultivation of phronesis, will be discussed as the important purposes of moral education based on neuroscientific evidence. (shrink)

Chinese international students who studied in the United States received “double stigmatization” from American and Chinese authorities because of the “political othering” tactic during COVID-19. The research used a phenomenological approach to examine why and how specifically the transnational identity of Chinese international students in the United States shifted during the double stigmatization. The researcher conducted a total of three rounds of interviews with 15 Chinese international students who studied in the United States and returned to China between 2018 and (...) 2020, which culminated in 45 interviews through a longitudinal study to probe the transnational identities of this population before and during the double stigmatization; the study also examined how the mindsponge mechanism worked during the identity shifts and the interplay among stigmatization, transnational identity shifts, and the mindsponge mechanism. The study concluded that before COVID-19, Chinese international students had been stigmatized in both China and the United States. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Spinoza and the Theory of Organism HANS JONAS I CARTESIANDUALISMlanded speculation on the nature of life in an impasse: intelligible as, on principles of mechanics, the correlation of structure and function became within the res extensa, that of structure-plus-function with feeling or experience (modes of the res cogitans) was lost in the bifurcation, and thereby the fact of life itself became unintelligible at the same time that the explanation (...) of its bodily performance seemed to be assured. The impasse became manifest in Occasionalism : its tour de force of an extraneous, divine "synchronization" of the outer and the inner world (the latter denied to animals) not only suffered from its extreme artificiality, the common failing of such ad hoc constructions, but even at so high a cost failed to accomplish its theoretical purpose by its own terms. For the animal machine, like any machine, raises beyond the question of the "how" that of the "what for" of its functioning---of the purpose for which it had thus been constructed by its maker.1 Its performance, however devoid of immanent teleology, must serve an end, and that end must be someone's end. This end may (directly) be itself, as indeed Descartes had implied when declaring self-preservation to be the effect of the functioning of the organic automaton. In that case the existence as such of the machine would be its end--either terminally, or in turn to benefit something else. In the former case, the machine would have to be more than a machine, for a mere machine cannot enioy its existence. But since, by the rigorous conception of the res extensa, it cannot be more than a machine, its function and/or existence must serve something other than itself. Automata in Descartes ' time were mainly for entertainment (rather than work). But the raison d'etre of the living kingdom could not well be seen in God's indulging his mechanical abilities or in the amusement of celestial spectators--especially since mere complexity of arrangement does not create new quality and thus add something to the unrelieved sameness of the simple substratum that might enrich the spectrum of being. For quality, beyond the primitive determinations of the extended per se, is the subjective creature of sensation, the confused representation of quantity in a mind; and thus organisms cannot harbor it because as mere machines they lack mentality, and pure spirits cannot because they lack sensuality, or the privilege of confusion and thereby of illusion with its possible enjoyment. And as to their intellectual enjoyment, even that, deprived of the thrill of discovery by the same token, would pale in the contemplation of what to sufficiently large The concept of "machine," adopted for its strict confinementto efficientcause, is still a finalisticconcept,even thoughthe final cause is no longer internal to the entity, as a mode of its own operation,but external to it as antecedent design. [43] 44 HISTORY OF PHILOSOPHY intellects is nothing but the ever-repeated exemplification of the same few, elementary (and ultimately trivial) truths. There remained, then, the time-honored--Stoic as well as Christian--idea that plants and animals are for the benefit of Man. Indeed, since the existence of a living world is the necessary condition for the existence of any of its members, the self-justifying nature of at least one such member (= species) would justify the existence of the whole. In Stoicism, Man provided this end by his possession of reason, which makes him the culmination of a terrestrial scale of being that is also self-justifying throughout all its grades (the end as the best of many that are good in degrees) ; in Christianity, by his possession of an immortal soul, which makes him the sole imago Dei in creation (the end as the sole issue at stake) ; and Cartesian dualism radicalized this latter position by making man even the sole possessor of inwardness or "soul" of any kind, thus the only one of whom "end" can meaningfully be predicated as he alone can entertain ends. All other life then, the product of physical necessity, can be considered his means. However, this traditional idea, in its anthropocentric vanity never a... (shrink)

ABSTRACT In the present study, we examined how the perceived attainability and relatability of moral exemplars predicted moral elevation and pleasantness among both adult and college student participants. Data collected from two experiments were analyzed with Bayesian multilevel modeling to explore which factors significantly predicted outcome variables at the story level. The analysis results demonstrated that the main effect of perceived relatability and the interaction effect between attainability and relatability shall be included in the best prediction model, and thus, were (...) deemed to predict the outcome variables significantly. The main effect of relatability as well as its interaction with attainability positively predicted elevation and pleasantness. We discussed educational implications of the findings in terms of how relatability may be the first point of emphasis for moral educators to focus on and attainability can then bolster the effectiveness. These relatable and attainable moral exemplars can be sources for moral elevation and pleasantness, which promote motivation to emulate moral behavior presented by the exemplars. (shrink)

In the present study, we tested whether civic identity consisting of moral and political identity via the bifactor model of civic identity with the Stanford Civic Purpose dataset. Previous research in youth development proposed that civic identity consists of two closely related identity constructs, i.e., moral and political identity. Given the bifactor model in factor analysis assumes the presence of both the general and specific factors, we hypothesized that the bifactor model would better fit the data than conventional alternative models. (...) Thus, we compared the candidate models, including the bifactor model, with confirmatory factor analysis. To address the concern about the potential overfitting of the bifactor model, we additionally conducted cross-validation and measurement invariance tests across different gender groups and time points. The analysis results supported our hypothesis that the bifactor model better fitted the data. Both the cross-validation and measurement invariance test results suggested that the overfitting issue was not a significant concern. In the present study, we empirically demonstrated that the bifactor model of civic identity consisting of moral and political identity, which was supposed to be more consistent with the theoretical and conceptual framework of civic identity, better fitted the data than conventional alternative models. (shrink)

Current radical democratic politics is characterized by new participatory spaces for citizens’ engagement, which aim at facilitating the democratic ideals of freedom and equality. These spaces are, however, situated in the context of deep societal inequalities. Modes of discrimination are carried over into participatory interaction. The democratic subject is judged by its physically embodied appearance, which replicates external hierarchies and impedes the freedom of self-expression. To tackle this problem, this article seeks to identify ways to increase the freedom of the (...) subject to explore its multiple self. Understanding the self as inherently fugitive, the article investigates participatory, deliberative and agonistic concepts of self-transformation. As all of them appear limited, it introduces a transformative perspective in democratic thought. Enriching the transformative perspective with queer and gender theory, the article generates the concept of a politics of becoming, which, through radical democratic practices of disidentification, advances the freedom of the subject to change. (shrink)

Herman Philipse considers “religious beliefs, faith and religion [to be] incompatible with science or reason”; he defines religion scientifically and specifically rejects religious doctrine. He describes reason “… as the whole of methods of empirical scientific research and critical discursive thinking as they have evolved in the scientific tradition and will continue to develop in the future” and he defines “… the phenomenon of conscience as a mental organ that can be scientifically explained and that makes the religious explanation superfluous (...) …”. Herman Philipse classifies science as the highest in rank, discards religion and sees philosophy, a rational view of the world, as based solely on the sciences. For his subject, Hans Achterhuis “… primarily cites biologists, ethologists and evolutionary psychologists with a philosophical interest” because “they presently have more to offer [him] than do his immediate colleagues”. Furthermore, “… it will be clear that ethologists and sociobiologists are of the opinion that the violent behaviour of human beings must be understood in part from the point of view of the evolutionary history of the sort ….. most philosophers and anthropologists are not aware of this. Their considerations suggest that violence only entered our world together with humankind”. Achterhuis’s choice is a “historic concept of violence”. (shrink)

During the lifetime of a structured product, payment events and cancellation events mainly affect the value of the option. This article presents a model for pricing generic cancellable option. The model is used to build most common kinds of cancellation schedules and compute the cancellation probability.

This study develops a Science–Technology–Society (STS)-based science ethics education program for high school students majoring in or planning to major in science and engineering. Our education program includes the fields of philosophy, history, sociology and ethics of science and technology, and other STS-related theories. We expected our STS-based science ethics education program to promote students’ epistemological beliefs and moral judgment development. These psychological constructs are needed to properly solve complicated moral and social dilemmas in the fields of science and engineering. (...) We applied this program to a group of Korean high school science students gifted in science and engineering. To measure the effects of this program, we used an essay-based qualitative measurement. The results indicate that there was significant development in both epistemological beliefs and moral judgment. In closing, we briefly discuss the need to develop epistemological beliefs and moral judgment using an STS-based science ethics education program. (shrink)

ABSTRACT In the present study, I explore the relationship between purpose, which was measured by the Claremont Purpose Scale, and moral psychological indicators, moral reasoning, moral identity, and empathy. Purpose was quantified in terms of three subcomponents: meaning, goal, and beyond-the-self motivation. Moral reasoning was assessed in terms of utilization of postconventional moral reasoning. Moral identity was examined with two subscales: moral internalization, and symbolization. Among diverse subscales of empathy, I focused on empathic concern and perspective taking, which have been (...) reported to be strongly related to morality. To explore the best prediction models using the data, I employed Bayesian Model Selection and Bayesian regression analysis. In general, purpose was significantly predicted by most surveyed moral psychological indicators but not by moral symbolization. The best prediction model for beyond-the-self motivation included the most moral psychological indicator predictors including moral reasoning, which did not significantly predict other dependent variables. (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)

Though there is a wide and varied literature on ethical supererogation, there has been almost nothing written about its epistemic counterpart, despite an intuitive analogy between the two fields. This paper seeks to change this state of affairs. I will begin by showing that there are examples which intuitively feature epistemically supererogatory doxastic states. Next, I will present a positive theory of epistemic supererogation that can vindicate our intuitions in these examples, in an explanation that parallels a popular theory of (...) ethical supererogation. Roughly, I will argue that a specific type of epistemic virtue—the ability to creatively think up plausible hypotheses given a body of evidence—is not required of epistemic agents. Thus, certain exercises of this virtue can result in supererogatory doxastic states. In presenting this theory, I will also show how thinking about epistemic supererogation can provide us a new way forward in the debate about the uniqueness thesis for epistemic rationality. (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)

Kierkegaard's Either-Or is a book about the choice between aesthetic, ethical, and religious approaches to life. I show that Either-Or also contains a proposal for philosophy of science, and in particular, about the ideal epistemic state for human beings. Whereas the Cartesian-Hegelian tradition conceived of the ideal state as one of detached deliberation -- i.e. "seeing the world as it is in itself" -- Kierkegaard envisions the ideal state as the achievement of equilibrium between the "spectator" and "actor" aspects of (...) the human being. Kierkegaard's proposal thus sets the stage for Niels Bohr's "epistemological lesson of quantum mechanics". (shrink)

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 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)

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 study compares the neural substrate of moral decision making processes between Korean and American participants. By comparison with Americans, Korean participants showed increased activity in the right putamen associated with socio-intuitive processes and right superior frontal gyrus associated with cognitive control processes under a moral-personal condition, and in the right postcentral sulcus associated with mental calculation in familiar contexts under a moral-impersonal condition. On the other hand, American participants showed a significantly higher degree of activity in the bilateral anterior (...) cingulate cortex (ACC) associated with conflict resolution under the moral-personal condition, and in the right medial frontal gyrus (MFG) associated with simple cognitive branching in non-familiar contexts under the moral-impersonal condition when a more lenient threshold was applied, than Korean participants. These findings support the ideas of the interactions between the cultural background, education, and brain development, proposed in the field of cultural psychology and educational psychology. The study introduces educational implications relevant to moral psychologists and educators. (shrink)

The present study aimed to examine how to improve the effectiveness of moral exemplar-applied interventions based on the pillars of the Self-Determination Theory (SDT) framework, autonomy, competence, and relatedness. Past research has mainly focused on the relatedness and attainability of moral exemplars for predicting motivation outcomes. The data for this study consisted of synthesized data sets from previous studies examining the motivational impacts of distinct moral exemplars and intervention methods. The main syntheses for these data sets used Multilevel Modeling (MLM) (...) focusing on relatability, attainability, and intervention methods, corresponding to relatedness, competence, and autonomy in the SDT, respectively, as predictors. In general, there was a significant interaction effect between the attainability or relatability, and the intervention method. Autonomous instruction methods, which support autonomy, were demonstrated to boost motivational outcomes. Implications from this study support the employment of SDT to examine the use of moral exemplars in moral education and were consistent with previous exemplar studies. (shrink)

The present study aims to examine the relationship between the cortical midline structures (CMS), which have been regarded to be associated with selfhood, and moral decision making processes at the neural level. Traditional moral psychological studies have suggested the role of moral self as the moderator of moral cognition, so activity of moral self would present at the neural level. The present study examined the interaction between the CMS and other moral-related regions by conducting psycho-physiological interaction analysis of functional images (...) acquired while 16 subjects were solving moral dilemmas. Furthermore, we performed Granger causality analysis to demonstrate the direction of influences between activities in the regions in moral decision-making. We first demonstrate there are significant positive interactions between two central CMS seed regions—i.e., the medial prefrontal cortex (MPFC) and posterior cingulate cortex (PCC)—and brain regions associated with moral functioning including the cerebellum, brainstem, midbrain, dorsolateral prefrontal cortex, orbitofrontal cortex and anterior insula (AI); on the other hand, the posterior insula (PI) showed significant negative interaction with the seed regions. Second, several significant Granger causality was found from CMS to insula regions particularly under the moral-personal condition. Furthermore, significant dominant influence from the AI to PI was reported. Moral psychological implications of these findings are discussed. The present study demonstrated the significant interaction and influence between the CMS and morality-related regions while subject were solving moral dilemmas. Given that, activity in the CMS is significantly involved in human moral functioning. (shrink)

We developed and tested a behavioral version of the Defining Issues Test-1 revised (DIT-1r), which is a measure of the development of moral judgment. We conducted a behavioral experiment using the behavioral Defining Issues Test (bDIT) to examine the relationship between participants’ moral developmental status, moral competence, and reaction time when making moral judgments. We found that when the judgments were made based on the preferred moral schema, the reaction time for moral judgments was significantly moderated by the moral developmental (...) status. In addition, as a participant becomes more confident with moral judgment, the participant differentiates the preferred versus other schemas better particularly when the participant’s abilities for moral judgment are more developed. (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)

ABSTRACTIn this article, we discuss the benefits of Bayesian statistics and how to utilize them in studies of moral education. To demonstrate concrete examples of the applications of Bayesian statistics to studies of moral education, we reanalyzed two data sets previously collected: one small data set collected from a moral educational intervention experiment, and one big data set from a large-scale Defining Issues Test-2 survey. The results suggest that Bayesian analysis of data sets collected from moral educational studies can provide (...) additional useful statistical information, particularly that associated with the strength of evidence supporting alternative hypotheses, which has not been provided by the classical frequentist approach focusing on P-values. Finally, we introduce several practical guidelines pertaining to how to utilize Bayesian statistics, including the utilization of newly developed free statistical software, Jeffrey’s Amazing Statistics Program, and thresholding based on Bayes Factors, to scholars in the field of moral education. (shrink)

In its origins educational neuroscience has started as an endeavor to discuss implications of neuroscience studies for education. However, it is now on its way to become a transdisciplinary field, incorporating findings, theoretical frameworks and methodologies from education, and cognitive and brain sciences. Given the differences and diversity in the originating disciplines, it has been a challenge for educational neuroscience to integrate both theoretical and methodological perspective in education and neuroscience in a coherent way. We present a multi-level framework for (...) educational neuroscience, which argues for integration of multiple levels of analysis, some originating in brain and cognitive sciences, others in education, as a roadmap for the future of educational neuroscience with concrete examples in moral education. (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)

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)