This work provides an annotated translation, together with a brief commentary, of the “Bao Wei Quan” chapter, the 20th chapter of the Chunqiu fanlu. The Chunqiu fanlu is an important Chinese Confucian text. It is ascribed to a pivotal Former Han (206 BCE – 9 CE) scholar, an exegete of the Gongyang zhuan 公羊傳, Dong Zhongshu 董仲舒 (ca. 195–115 BCE). This text offered to readers an ideal of rulership that remained highly relevant to the development of the ethical and (...) political discourse of Chinese Confucianism. Despite its importance, the Chunqiu fanlu has only very recently been fully translated into a Western language, 1 and is one of the rare major classical Chinese texts which still lacks a full Japanese translation. Thus, the purpose of this work is to contribute to the ongoing Chunqiu fanlu translation project and to present to the reader some of the form and content of this influential work. -/- ⟪春秋繁露⟫第20章〈保位權〉的漢文注譯 -/- 本文是對⟪春秋繁露⟫第二十卷〈保位權〉含有短評的注譯。⟪春秋繁露⟫是中國儒學代表作之一。其作者据考据被認為是以注釋⟪春秋公羊傳⟫而聞名的西漢學者董仲舒（公元前195年—公元前115年）。⟪春秋繁露⟫是 一部被公認為有助於理解中國儒學發展史的最重要的經典著作之一。⟪春秋繁露⟫中所倡導的統治理想以及天人感應的概念兩千年以來一直是倫理政治學中的一個核心問題，這部書對中國儒學的倫理和政治論述的發展起著极為重 要的作用。⟪春秋繁露⟫雖然在中國傳統文化中占据著重要的地位，但它最近才被完整地翻譯成任何歐洲國家的語言，不過完整日語翻譯本中仍然缺少的一部。筆者希望本文可以為正在進行中的⟪春秋繁露⟫翻譯工程做出一點貢 獻，并希望通過本文給廣大讀者介紹一點該著作的基本形式和一小部分內容。. (shrink)

'Bao wei quan' 保位權 (‘Preservation of position and power’) (hereinafter: BWQ) is an essay advising rulers on how to preserve their position of power and maintain control over the bureaucracy. It is a part of one of the most authoritative premodern Chinese texts, the Chunqiu fanlu 春秋繁露 (The Luxuriant Dew of the Spring and Autumn Annals), which is traditionally ascribed to pivotal Han dynasty scholar Dong Zhongshu 董仲舒 (c. 195–115 BCE). This paper argues that the BWQ establishes a type (...) of naturalistic approach to rulership. In this vision, the state and its social and political order is rooted in the constitution of human nature, and is perceived as a place where human tendencies can be followed and fulfilled, but also controlled. In addition, the BWQ’s political discourse and its view of government is built around complementary processes, such as reward/punishment, political power/moral power, non-action/action, actuality/fam etc. The art of rulership thus consists of keeping these opposites in balance. (shrink)

Can we conceive of disorder in a positive sense? We organize our desks, we discipline our children, we govern our polities--all with the aim of reducing disorder, of temporarily reversing the entropy that inevitably asserts itself in our lives. Going all the way back to Hesiod, we see chaos as a cosmogonic state of utter confusion inevitably reigned in by laws of regularity, in a transition from fearful unpredictability to calm stability. In contrast to a similar early Chinese notion of (...) chaotic disorder (luan), early Daoists posit a type of chaos that is to be cultivated rather than feared. This chaos is a primal disorder, akin to Hesiod's, but rather than threatening disruption, it is replete with creative potential and through spontaneous action yields orderly processes that proceed from the concretion of things to their dissolution and back, in a complex web of relations. This processional activity, although taken in one sense as cosmogonic, in a more important sense is immanent at every moment of activity. This article identifies terms of chaos, such as dun dun 沌 沌, hundun 渾 沌, and xingming 涬 溟 in Laozi and Zhuangzi and examines the passages in which they occur. Analyzing these passages brings us to a better understanding of "chaos" in a Chinese sense and to a familiarity with related terms in its semantic field, such as xuan 玄 (dark, mysterious), miao 妙 (subtle/profound), wei 微 (minute/inchoate), xiao 小 (small/minute), and pu 樸 (uncarved block). We see that the Daoist ideal is to return to a chaotic inchoateness by melding with the cosmos and there finding a repository of creative potential. This notion of chaos as the inchoate is used a springboard into understanding the origins of Daoist spontaneity. (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.

Faced with the choice between saving one person and saving two others, what should we do? It seems intuitively plausible that we ought to save the two, and many forms of consequentialists offer a straightforward rationale for the intuition by appealing to interpersonal aggregation. But still many other philosophers attempt to provide a justification for the duty to save the greater number without combining utilities or claims of separate individuals. I argue against one such attempt proposed by Iwao Hirose. Despite (...) being consequentialist, his argument is aggregation-free since it relies on a non-aggregative value judgement method, instead of interpersonal aggregation, to establish that (other things being equal) a state of affairs is better when more people survive therein. I do not take issue with its consequentialist element; rather, I claim that there is no good reason to adopt the method in question, and thus no good reason to be moved by his argument overall. What we are in search of is not merely a logically possible method that can produce the conclusion that we already want, but one that we have good reason to adopt. Hirose's argument elegantly demonstrates how it could possibly be true that it is right to save the greater number; but it fails to show that we have reason to believe so - even when we do not combine the interests of different individuals. (shrink)

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

E. Husserl’s reflections in Logical Investigations on “intentional feelings” and “non-intentional feelings” are significant in both his later ethical explorations and M. Scheler’s thought on ethics. Through the incorporation of the views of Husserl and Scheler, we find that the phenomenology of the intentional feeling-acts is not only the foundation of the non-formal ethics of values in Scheler’s phenomenology, but also at least the constitutive foundation of the ethics of Husserl’s first orientation.

Luck egalitarians equalize the outcome enjoyed by people who exemplify the same degree of distributive desert by removing the influence of luck. They also try to calibrate differential rewards according to the pattern of distributive desert. This entails that they have to decide upon, among other things, the rate of reward, i.e., a principled way of distributing rewards to groups exercising different degrees of the relevant desert. However, the problem of the choice of reward principle is a relatively and undeservedly (...) neglected issue among luck egalitarians. The main goal of this paper is to highlight the importance and difficulty of this problem, and to elaborate upon G. A. Cohen's community-oriented response to it. In the last section, I provide a taxonomy of distributive pluralism, contrasting Cohen’s view with other (not so genuine) pluralisms - especially with all-things-considered varieties - while trying to motivate readers to adopt the more robust form of pluralism. (shrink)

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)

[English abstract] In his last metaethical statement, Parfit revisits his earlier arguments for non-metaphysical normative non-naturalism , and points to the possibility of convergence between his view and Railton's non-analytical normative naturalism. I examine the basis of this convergence claim and find it unpersuasive, mainly because if their views converge on the same position, Parfit's non-natural norms exist only as predicates. In order to avoid this consequence, he needs to present a reason for believing in the existence of normative properties (...) . There is an indispensability argument implicit in his text, with concepts of sui generis normative ground and necessity at its centre. I discuss their main features and present problems besetting these concepts. (shrink)

In this paper I argue that there is a structural parallelism between law and physics in Leibniz since his early years, which has significant influence on the formation of his views. I start by examining Leibniz's early physical system and an analogy with juridical laws that he uses to explain the structure of physical laws. Then, I argue that this analogy stems from an envisioned parallelism between law and physics. Finally, I illustrate the significance of this legal-physical parallelism by arguing (...) that it underlies some of Leibniz's mature views. Most importantly, I argue that the parallelism explains the origin of architectonic principles or optimality principles in Leibniz's mature physics. (shrink)

This paper aims both to tackle the technical issue of deciphering Hobbes’s derivation of the sine law of refraction and to throw some light to the broader issue of Hobbes’s mechanical philosophy. I start by recapitulating the polemics between Hobbes and Descartes concerning Descartes’ optics. I argue that, first, Hobbes’s criticisms do expose certain shortcomings of Descartes’ optics which presupposes a twofold distinction between real motion and inclination to motion, and between motion itself and determination of motion; second, Hobbes’s optical (...) theory presented in Tractatus Opticus I constitutes a more economical alternative, which eliminates the twofold distinction and only admits actual local motion, and Hobbes’s derivation of the sine law presented therein, which I call “the early model” and which was retained in Tractatus Opticus II and First Draught, is mathematically consistent and physically meaningful. These two points give Hobbes’s early optics some theoretical advantage over that of Descartes. However, an issue that has baffled commentators is that, in De Corpore Hobbes’s derivation of the sine law seems to be completely different from that presented in his earlier works, furthermore, it does not make any intuitive sense. I argue that the derivation of the sine law in De Corpore does make sense mathematically if we read it as a simplification of the early model, and Hobbes has already hinted toward it in the last proposition of Tractatus Opticus I. But now the question becomes, why does Hobbes take himself to be entitled to present this simplified, seemingly question-begging form without having presented all the previous results? My conjecture is that the switch from the early model to the late model is symptomatic of Hobbes’s changing views on the relation between physics and mathematics. (shrink)

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.

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)

This essay develops an inferential account of model explanation, based on Mauricio Suárez’s inferential conception of scientific representation and Alisa Bokulich’s counterfactual account of model explanation. It is suggested that the fact that a scientific model can explain is essentially linked to how a modeler uses an established model to make various inferences about the target system on the basis of results derived from the model. The inference practice is understood as a two-step activity, with the first step involving making (...) counterfactual statements about the model itself and the second step involving making hypothetical statements transferring over claims derived from the model onto the target. To illustrate how this two-step activity proceeds, an agent-based simulation model is discussed. (shrink)

This paper examines Aristotle’s vocabulary of pain, that is the differences and relations of the concepts of pain expressed by synonyms in the same semantic field. It investigates what is particularly Aristotelian in the selection of the pain-words in comparison with earlier authors and specifies the special semantic scope of each word-cluster. The result not only aims to pin down the exact way these terms converge with and diverge from each other, but also serves as a basis for further understanding (...) Aristotle’s philosophical conception of pain. (shrink)

In this paper, the author will explore the relationship between agency and intentionality of the artificial agent in the following seven ways.

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)

Polger and Shapiro argue that their official recipe, a criterion for judging when the phenomenon of multiple realization exists, renders MR less widespread than its proponents have assumed. I argue that, although Polger and Shapiro’s criterion is a useful contribution, they arrive at their conclusion too hastily. Contrary to Polger and Shapiro, I claim that the phenomenon of multiple realization in the biological world, judged by their criterion, is not as scarce as they suggest. To show this, an updated official (...) recipe, namely a multiple mechanistic realization thesis, integrating Polger and Shapiro’s criterion with a compositional conception of realization, is developed. Then, three examples of varied kinds are examined, showing that cases of MR are not so hard to find in the biological world. (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)

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)

I propose a dynamic causal approach to characterizing the notion of a mechanism. Levy and Bechtel, among others, have pointed out several critical limitations of the new mechanical philosophy, and pointed in a new direction to extend this philosophy. Nevertheless, they have not fully fleshed out what that extended philosophy would look like. Based on a closer look at neuroscientific practice, I propose that a mechanism is a dynamic causal system that involves various components interacting, typically nonlinearly, with one another (...) to produce a phenomenon of interest. (shrink)

In this paper I argue that Leibniz's ethics is a kind of virtue ethics where virtues of the agent are explanatorily primary. I first examine how Leibniz obtained his conception of justice as a kind of love in an early text, Elements of Natural Law. I show that in this text Leibniz's goal was to find a satisfactory definition of justice that could reconcile egoism with altruism, and that this was achieved through the Aristotelian virtue of friendship where friends treat (...) each other as “other selves.” Following this decisive moment, Leibniz adopted an Aristotle‐inspired ethical framework where the virtuous agent is central for moral evaluations. I then show that, despite certain developments, Leibniz's ethics retained this essential feature throughout his career. In Leibniz's later writings, God constitutes the foundation of the moral realm, and the fundamental moral endeavor of human beings consists in the imitation of God. (shrink)

This paper reexamines Theophrastus’ Metaphysics 11a18–26, an obscure testimony about Speusippus, the second head of the Platonic Academy. As opposed to the traditional interpretation, which takes this passage as Theophrastus’ polemic against Speusippus’ doctrine of value, I argue that he here dialectically takes advantage of, rather than launches an attack on, the Platonist. Based on this new reading, I further propose a revision and a reassessment of the ‘gloomy metaphysics’ of Speusippus which will shed new light on his ethics.

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 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)

Michael Weisberg’s account of scientific models concentrates on the ways in which models are similar to their targets. He intends not merely to explain what similarity consists in, but also to capture similarity judgments made by scientists. In order to scrutinize whether his account fulfills this goal, I outline one common way in which scientists judge whether a model is similar enough to its target, namely maximum likelihood estimation method. Then I consider whether Weisberg’s account could capture the judgments involved (...) in this practice. I argue that his account fails for three reasons. First, his account is simply too abstract to capture what is going on in MLE. Second, it implies an atomistic conception of similarity, while MLE operates in a holistic manner. Third, Weisberg’s atomistic conception of similarity can be traced back to a problematic set-theoretic approach to the structure of models. Finally, I tentatively suggest how these problems might be solved by a holistic approach in which models and targets are compared in a non-set-theoretic fashion. (shrink)

Despite being a milestone in the history of statistical causal inference, Sewall Wright’s 1918 invention of path analysis did not receive much immediate attention from the statistical and scientific community. Through a careful historical analysis, this paper reveals some previously overlooked philosophical issues concerning the history of causal inference. Placing the invention of path analysis in a broader historical and intellectual context, I portray the scientific community’s initial lack of interest in the method as a natural consequence of relevant scientific (...) and philosophical conditions. In addition to Karl Pearson’s positivist refutation of causation, I contend that the acceptance of path analysis faced several other challenges, including the introduction of a new formalism, conceptual barriers to causal inference, and the lack of model-based statistical thinking. The presence of these challenges shows that the delayed progress in causal inference in the early twentieth century was inevitable. (shrink)

Die Disziplin, die als „Juristische Methodenlehre“ bezeichnet wird, ist gegenwärtig chinesischen Juristen nicht fremd, sie stammt aber ursprünglich aus dem deutschen Sprachraum. In der Literatur finden sich auch verwandte Ausdrücke wie „Juristische Methodologie“, „Juristische Methodik“ bzw.„Methodenlehre der Rechtswissenschaft“. Seit Anfang des 21. Jahrhunderts wurde ihre Rezeption in China durch zwei Übersetzungen gekennzeichnet, nämlich die „rechtswissenschaftliche Methodenlehre“ (faxue fangfalun) und die „rechtliche Methodenlehre“ (falü fangfalun). Neben der herkömmlichen Methodenlehre entwickelte sich auch eine jüngere Theorie der juristischen Argumentation, die die weltweite Aufmerksamkeit (...) sogar außerhalb Deutschlands auf sich lenken konnte und deren Bestand in China einen ganz selbständigen Abschnitt verdient. Als Hintergrund dafür soll von vornherein ein Blick auf die Entwicklungen der chinesischen Rechtstheorie und Rechtsphilosophie nach 1978 und demzufolge auf die Entstehung der Methodenfrage in der chinesischen Rechtswissenschaft geworfen werden. (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)

Plato’s nephew Speusippus has been widely accepted as the historical person behind the mask of the anti-hedonists in Phlb. 42b–44c. This hypothesis is supported by, inter alia, the link between Socrates’ char- acterization of them as δυσχερεῖς and the frequent references of δυσχέρεια as ἀπορία to Speusippus in Aristotle’s Metaphysics MN. This study argues against assigning any privileged status to Speusippus in the assimilation of δυσχέρεια with ἀπορία. Instead, based on a comprehensive survey of how δυσχερ- words were used in (...) classical antiquity, the semantic shift of δυσχέρεια can be explained in an alternative way. (shrink)

While investigating the value of achievements, Dunkle claims that lucky achievements are possible. For instance, if a person does great works, then it is possible that the works have the status of achievements, even if luck plays a crucial role in doing the great works. Rather than examining Dunkle’s claim, this paper proceeds discussion under the assumption that lucky achievements are possible. In particular, based on this assumption, this paper suggests a new approach to the nature of achievement named the (...) Comparative Value Approach. According to the comparative value approach, a product can have the status of an achievement if the product is valuable in an achievement-relevant domain, and in that domain the product is valuable more than most other items which either have been achieved or can be achieved by others. This paper shows that the comparative value approach successfully explains the cases of achievements, including the cases of lucky achievements. Besides this reason, this paper provides three more reasons to show that the comparative value approach is a feasible view of achievements. The comparative value approach can accommodate the fact that there are various kinds of achievements; the approach can explain the relation between the nature of achievement and the achievement-value of a product; and the approach can show why in determining the status of a product it matters that for average people achieving a similar kind of product is sufficiently difficult. Based on these four reasons, this paper concludes that the comparative value approach is a plausible understanding of achievements. (shrink)

The recent resurgence of the language of thought (LOT) hypothesis has drawn much attention. The history of philosophy and cognitive science has provided us with various versions of LOT. From Sellars to Fodor, theorists have offered us considerations on the vehicles, content, and functions of such a representation format. However, it’s been more than 50 years since Fodor’s publication on LOT (1975), and the resurgence suggests that we need a modern iteration of LOT to fit with recent developments in the (...) study on cognition. Therefore, in this paper, I argue that we need a middle ground between Fodor and Sellars’s views on LOT – specifically, we should abandon Fodor’s view on the vehicle and content of LOT, and we should also acknowledge that perception might involve LOT (contrary to what Sellars thought). What we should focus on is LOT representations’ format’s function, that at least some neural processes are analogous to linguistic structures, and how such a function is able to facilitate a modern situational view of cognitive representation. Having this account of LOT, we can make it a more versatile tool fitting with the other cognitive frameworks, such as the free energy principle and Bayesian inference. (shrink)

Simion and Kelp explain the trustworthiness of an AI based on that AI’s disposition to meet its obligations. Roughly speaking, according to Simion and Kelp, an AI is trustworthy regarding its task if and only if that AI is obliged to complete the task and its disposition to complete the task is strong enough. Furthermore, an AI is obliged to complete a task in the case where the task is the AI’s etiological function or design function. This account has a (...) strength in that it can provide a unificatory rationale for the trustworthy-making properties of AIs. According to this account, being explainable, being safe, and being transparent are the trustworthy-making properties of an AI because an AI can fulfill its etiological or design functions in the case where it is explainable, safe, and transparent. This paper shows that though Simion and Kelp’s account has a strength, this account is not satisfactory for two reasons. The first reason is that an AI’s trustworthiness is not determined just by the AI’s disposition to meet obligations, and the second reason is that it is difficult to explain how an AI’s etiological function and design function have to do with that AI’s obligations. To provide a full-fledged account, Simion and Kelp should dismiss these concerns. (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)

This study aims to provide a coherent new interpretation of the notorious anti-hedonism of Speusippus, Plato’s nephew and the second scholarch of the Academy, by reconsidering all the relevant sources concerning his attitude toward pleasure—sources that seem to be in tension or even incompatible with each other. By reassessing Speusippus’ anti-hedonism and Aristotle’s response, it also sheds new light on the Academic debate over pleasure in which he and Aristotle participated: This debate is not merely concerned with the truth and (...) credibility of the arguments for or against hedonism; there are also notable differences among the participants in their understanding of the practical significance of evaluating hedonic experiences. This new interpretation allows us to better understand Aristotle’s selective representation of the intra-school debate and some neglected features of his responses to different interlocutors. (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.

The debate over the value of pleasure among Eudoxus, Speusippus, and Aristotle is dramatically documented by the Nicomachean Ethics, particularly in the dialectical pros-and-cons concerning the so-called argument from contraries. Two similar versions of this argument are preserved at EN VII. 13, 1153b1–4, and X. 2, 1172b18–20. Many scholars believe that the argument at EN VII is either a report or an appropriation of the Eudoxean argument in EN X. This essay aims to revise this received view. It will explain (...) why these two arguments differ in premises, contents and purposes, and why these distinctions matter for a proper assessment of Aristotle’s understanding of pleasure and pain in general and his dialectical art in particular. (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)

Nearly thirty years ago, Robert Alexy in his book The Concept and Validity of Law as well as in other early articles raised non-positivistic arguments in the Continental European tradition against legal positivism in general, which was assumed to be held by, among others, John Austin, Hans Kelsen and H.L.A. Hart. The core thesis of legal positivism that was being discussed among contemporary German jurists, just as with their Anglo- American counterparts, is the claim that there is no necessary connection (...) between law and morality. Robert Alexy has argued, however, that the law, besides consisting conceptually of elements of authoritative issuance and social efficacy, necessarily lays a claim to substantial correctness, which is derived from analytical arguments. Furthermore, if this claim to substantial correctness necessarily requires the incorporation of moral elements into law, then the ‘necessary connection thesis’, as defended by non-positivism, can be justified. Some of the most significant objections to this sort of claim, stemming from the Anglo-American world, are those introduced by Joseph Raz. In his ‘Reply’ to Robert Alexy, Raz raises at least three interesting criticisms, including, first, the ambiguity of ‘legal theory in the positivistic tradition’, second, the indeterminate formulations of the ‘separation thesis’, and, third, the necessary claim of law to legitimate authority as a moral claim. As a point of departure, I will argue that Raz’s three criticisms are misleading. For they do not enhance our understanding of the genuine compatibility or incompatibility between legal positivism and non-positivism. Despite the frequently reformulated theses of legal positivism and the various kinds of opponents responding thereto, the essential divergence between legal positivism and non-positivism was and remains the answer to the question of the relation between law and morality. Furthermore, I will clarify that in the strictest sense there can be three and only three logically possible positions concerning the relation between law and morality: the connection between them is either necessary, or impossible (i. e. they are necessarily separate), or contingent (i. e. they are neither necessarily connected nor necessarily separate). The first position is non-positivistic, while the latter two positions are, indeed, both positivistic, but in different forms: one may be called ‘exclusive’ legal positivism, the other ‘inclusive’ legal positivism. I will continue by showing that these three positions stand to one another in the relation of contraries, not contradictories, and that, taken together, they exhaust the logically possible positions concerning the relation between law and morality, never mind the tradition or authority from which these positions are derived. Raz mentions, however, many changeable formulations of the separation thesis, which even leads him to acknowledge ‘necessary connections between law and morality’. One who is trying to understand legal positivism would no doubt be puzzled by this claim. Nevertheless, I will argue that this is an alternative strategy of legal positivism, and it points to naturalistically oriented view. Although this necessary separation between law and morality, understood naturalistically, strikes one as strengthening the separation, in the end it leads to a weakened notion of necessity. This weakened necessary separation thesis, however, cannot be justified through the so-called claim of the law to legitimate authority, defended by Raz, for it is difficult to answer the question of whether a normally justified but factual authority can gain legitimate authority. Finally, the necessary connection between law and morality in a strong sense can still be justified by the claim of law to correctness, as per Alexy’s argument. (shrink)

The concept of human dignity has been criticized as either too thick or too thin. However, according to the non-positivistic standpoint, the legal normativity of human dignity can be justified and thus strengthened by means of its moral correctness. From the individual perspective, Mencius’ understanding of human dignity as an intrinsic value and Kant’s formula of ‘man as an end in itself’ can be adequately understood based on the differentiation of, as well as the connection between, principium diiudicationis and principium (...) executionis, between will and choice, and between homo phaenomenon and homo noumenon (that is, ‘humanity in the personality’). From the social perspective, since the dual dimensions of the individual and the social person are both fictive constructions, even Radbruch, once as a supporter of social law, has not replaced the concept of ‘legal person’ and, in the post-War period, acknowledges individualistic human dignity as the criterion for applying the famous ‘disavowal formula’. On the one hand, human dignity shows at least a weak normative character, which requires, firstly, balancing between the exercise of state powers and the constitutional review under the guidance of the dual dimensions of man and, secondly, optimization of the principle of human dignity in individual cases. On the other hand, through the necessary connection between the concept of dignity and that of personality, human dignity can exhibit a strong normative character, which unavoidably requires a metaphysical justification. (shrink)

This paper aims to clarify Plato’s notions of the natural and the neutral state in relation to hedonic properties. Contra two extreme trends among scholars—people either conflate one state with the other, or keep them apart as to establish an unsurmount- able gap between both states, I argue that neither view accurately reflects Plato’s position because the natural state is real and can coincide with the neutral state in part, whereas the latter, as an umbrella term, can also be realized (...) in a non-natural condition. The clarification of the relation between the two states will shed light on the degree to which Plato admits and constrains the hedonic value for a good human life; further, this will call attention to some (not well explored) parallel thoughts in the medical tradition to which Plato is indebted. (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)

Imagine that only the state can meet the need for housing but decides not to do so. Unsurprisingly, participants in a vignette experiment deem this scenario unjust. Hence, justice ratings increase when the living situation improves. To a lesser extent, this also holds beyond the need threshold, understood as the minimum amount necessary for a decent life. Surprisingly, however, the justice evaluation function is highly convex below this point. The resulting S-shaped curve is akin to the value function in prospect (...) theory, with the need threshold providing the point of reference and inflection. A control treatment without needs-information supports this interpretation. Needs-information furthermore compresses the perceived injustice of arbitrary inequality. As in prospect theory, such reference dependency suggests biases in judgment and decision making. A consequence may be that the lot of the poorest in society does not receive the attention it would otherwise get. (shrink)

Based on the dispute between Protagoras and Socrates on the origin of ethics, one can ask the question of whether the principle of ethics is reason orfeeling/emotion, or whether ethics is grounded on reason or feeling/emotion. The development of Kant’s thoughts on ethics shows the tension between reason and feeling/emotion. In Kant’s final critical ethics, he held to a principle of “rational a priori.” On the one hand, this is presented as the rational a priori principle being the binding principle (...) of judgment. On the other hand, it is presented as the doctrine of “rational fact” as the ultimate argument of his ethics. Husserl believed that Kant’s doctrine of a rational a priori totally disregarded the a priori essential laws of feeling. Like Husserl, Scheler criticized Kant’s doctrine of a rational a priori, and therefore developed his own theory of an “emotional a priori”. Both of them focused their critiques on the grounding level of ethics. Scheler, however, did not follow Husserl all the way, but criticized him and reflected on his thoughts. At last, he revealed the primary status of a phenomenological material ethics of value. (shrink)