In this work, we consider the problem of the approximate hedging of a contingent claim in the minimum mean square deviation criterion. A theorem on martingaỉe representation in the case of discrete time and an application of obtained result for semi-continous market model are given.

This paper examines the integration of ethical considerations in management accounting (MA) education. Drawing on the work of Alisdair MacIntyre, it is argued that MA instruments such as performance measurement are not morally neutral, but instead bear moral implications. Therefore, this paper contends that MA students should be trained to take these moral implications into consideration alongside MA's technical aspects. A content analysis is carried out to examine the integration of ethical considerations in top-ranked MA textbooks. The findings indicate (...) that these textbooks, particularly the introductory textbooks, marginally integrate ethical considerations. Furthermore, the findings point to the risk of detaching ethical considerations from the discussion of MA's technical aspects, which may weaken the potential of the ethical considerations and turn them into ‘afterthoughts’. Finally, this paper offers practical suggestions for the improvement of the integration of ethical considerations in MA education and concludes with directions for future research. (shrink)

While philosophers hold that it is patently absurd to blame robots or hold them morally responsible [1], a series of recent empirical studies suggest that people do ascribe blame to AI systems and robots in certain contexts [2]. This is disconcerting: Blame might be shifted from the owners, users or designers of AI systems to the systems themselves, leading to the diminished accountability of the responsible human agents [3]. In this paper, we explore one of the potential underlying reasons for (...) robot blame, namely the folk's willingness to ascribe inculpating mental states or "mens rea" to robots. In a vignette-based experiment (N=513), we presented participants with a situation in which an agent knowingly runs the risk of bringing about substantial harm. We manipulated agent type (human v. group agent v. AI-driven robot) and outcome (neutral v. bad), and measured both moral judgment (wrongness of the action and blameworthiness of the agent) and mental states attributed to the agent (recklessness and the desire to inflict harm). We found that (i) judgments of wrongness and blame were relatively similar across agent types, possibly because (ii) attributions of mental states were, as suspected, similar across agent types. This raised the question - also explored in the experiment - whether people attribute knowledge and desire to robots in a merely metaphorical way (e.g., the robot "knew" rather than really knew). However, (iii), according to our data people were unwilling to downgrade to mens rea in a merely metaphorical sense when given the chance. Finally, (iv), we report a surprising and novel finding, which we call the inverse outcome effect on robot blame: People were less willing to blame artificial agents for bad outcomes than for neutral outcomes. This suggests that they are implicitly aware of the dangers of overattributing blame to robots when harm comes to pass, such as inappropriately letting the responsible human agent off the moral hook. (shrink)

Ramsey (1926) sketches a proposal for measuring the subjective probabilities of an agent by their observable preferences, assuming that the agent is an expected utility maximizer. I show how to extend the spirit of Ramsey's method to a strictly wider class of agents: risk-weighted expected utility maximizers (Buchak 2013). In particular, I show how we can measure the risk attitudes of an agent by their observable preferences, assuming that the agent is a risk-weighted expected utility maximizer. (...) Further, we can leverage this method to measure the subjective probabilities of a risk-weighted expected utility maximizer. (shrink)

Drink driving causes great suffering and material destruction. The alcohol interlock promises to eradicate this problem by technological design. Traditional counter-measures to drink driving such as policing and punishment and information campaigns have proven insufficient. Extensive policing is expensive and intrusive. Severe punishment is disproportionate to the risks created in most single cases. If the interlock becomes inexpensive and convenient enough, and if there are no convincing moral objections to the device, it may prove the only feasible as well as (...) the only justifiable solution to the problem of drink driving. A policy of universal alcohol interlocks, in all cars, has been proposed by several political parties in Sweden and is supported by the National Road Administration and the 2006 Alcohol Interlock Commission. This article assesses two possible moral objections to a policy of universal interlocks: (i) that it displaces the responsibility of individual drivers and (ii) that it constitutes a paternalistic interference with drivers. The first objection is found unconvincing, while the second has only limited bite and may be neutralized if paternalism is accepted for the sake of greater net liberty. Given the expected technological development, the proposed policy seems a commendable health promotion measure for the near future. (shrink)

This fifth volume on Advances and Applications of DSmT for Information Fusion collects theoretical and applied contributions of researchers working in different fields of applications and in mathematics, and is available in open-access. The collected contributions of this volume have either been published or presented after disseminating the fourth volume in 2015 in international conferences, seminars, workshops and journals, or they are new. The contributions of each part of this volume are chronologically ordered. First Part of this book presents some (...) theoretical advances on DSmT, dealing mainly with modified Proportional Conflict Redistribution Rules (PCR) of combination with degree of intersection, coarsening techniques, interval calculus for PCR thanks to set inversion via interval analysis (SIVIA), rough set classifiers, canonical decomposition of dichotomous belief functions, fast PCR fusion, fast inter-criteria analysis with PCR, and improved PCR5 and PCR6 rules preserving the (quasi-)neutrality of (quasi-)vacuous belief assignment in the fusion of sources of evidence with their Matlab codes. Because more applications of DSmT have emerged in the past years since the apparition of the fourth book of DSmT in 2015, the second part of this volume is about selected applications of DSmT mainly in building change detection, object recognition, quality of data association in tracking, perception in robotics, risk assessment for torrent protection and multi-criteria decision-making, multi-modal image fusion, coarsening techniques, recommender system, levee characterization and assessment, human heading perception, trust assessment, robotics, biometrics, failure detection, GPS systems, inter-criteria analysis, group decision, human activity recognition, storm prediction, data association for autonomous vehicles, identification of maritime vessels, fusion of support vector machines (SVM), Silx-Furtif RUST code library for information fusion including PCR rules, and network for ship classification. Finally, the third part presents interesting contributions related to belief functions in general published or presented along the years since 2015. These contributions are related with decision-making under uncertainty, belief approximations, probability transformations, new distances between belief functions, non-classical multi-criteria decision-making problems with belief functions, generalization of Bayes theorem, image processing, data association, entropy and cross-entropy measures, fuzzy evidence numbers, negator of belief mass, human activity recognition, information fusion for breast cancer therapy, imbalanced data classification, and hybrid techniques mixing deep learning with belief functions as well. (shrink)

Can it be rational to be risk-averse? It seems plausible that the answer is yes—that normative decision theory should accommodate risk aversion. But there is a seemingly compelling class of arguments against our most promising methods of doing so. These long-run arguments point out that, in practice, each decision an agent makes is just one in a very long sequence of such decisions. Given this form of dynamic choice situation, and the (Strong) Law of Large Numbers, they conclude (...) that those theories which accommodate risk aversion end up delivering the same verdicts as risk-neutral theories in nearly all practical cases. If so, why not just accept a simpler, risk-neutral theory? The resulting practical verdicts seem to be much the same. In this paper, I show that these arguments do not in fact condemn those risk-aversion-accommodating theories. Risk aversion can indeed survive the long run. (shrink)

In Beyond Neutrality, George Sher criticises the idea that state neutrality between competing conceptions of the good helps protect society from oppression. While he is correct that some governments are non-neutral without being oppressive, I argue that those governments may be neutral at the core of their foundations. The possibility of non-neutrality leading to oppression is further explored; some conceptions of the good would favour oppression while others would not. While it is possible that a non-neutral state (...) may avoid oppression, it is argued that the risks are so great that it is better to bet on government being neutral, thereby minimizing the possibility of oppression. (shrink)

Measuring the effectiveness of medical interventions faces three epistemological challenges: the choice of good measuring instruments, the use of appropriate analytic measures, and the use of a reliable method of extrapolating measures from an experimental context to a more general context. In practice each of these challenges contributes to overestimating the effectiveness of medical interventions. These challenges suggest the need for corrective normative principles. The instruments employed in clinical research should measure patient-relevant and disease-specific parameters, and should not be (...) sensitive to parameters that are only indirectly relevant. Effectiveness always should be measured and reported in absolute terms (using measures such as 'absolute risk reduction'), and only sometimes should effectiveness also be measured and reported in relative terms (using measures such as 'relative risk reduction')-employment of relative measures promotes an informal fallacy akin to the base-rate fallacy, which can be exploited to exaggerate claims of effectiveness. Finally, extrapolating from research settings to clinical settings should more rigorously take into account possible ways in which the intervention in question can fail to be effective in a target population. (shrink)

(Winner of The Res Publica Essay Prize) This article defends a moderate version of state perfectionism by using Gerald Gaus’s argument for liberal neutrality as a starting point of discussion. Many liberal neutralists reject perfectionism on the grounds of respect for persons, but Gaus has explained more clearly than most neutralists how respect for persons justifies neutrality. Against neutralists, I first argue that the state may promote the good life by appealing to what can be called “the qualified judgments about (...) the good life,” which have not been considered by liberal perfectionists including Joseph Chan and Steven Wall. Then I clear up several possible misunderstandings of these judgments, and argue that: (a) moderate perfectionism does not rely on controversial rankings of values and is committed to promoting different valuable ways of life by pluralistic promotion; and (b) moderate perfectionism requires only an indirect form of coercion in using tax money to support certain moderate perfectionist measures, which is justifiable on the grounds of citizens’ welfare. Thus, I maintain that moderate perfectionism does not disrespect citizens, and is not necessarily unfair to any particular group of people. It is, in fact, plausible and morally important. The defence of moderate perfectionism has practical implications for the state’s policies regarding art development, drug abuse, public education, and so on. (shrink)

I defend the idea that a liberal commitment to value neutrality is best honoured by maintaining a pure cardinality component in our rankings of opportunity or liberty sets. I consider two challenges to this idea. The first holds that cardinality rankings are unnecessary for neutrality, because what is valuable about a set of liberties from a liberal point of view is not its size but rather its variety. The second holds that pure cardinality metrics are insufficient for neutrality, because liberties (...) cannot be individuated into countable entities without presupposing some relevantly partisan evaluative perspective. I argue that a clear understanding of the liberal basis for valuing liberty shows the way to satisfying responses to both challenges. (shrink)

How much does rationality constrain what we should believe on the basis of our evidence? According to this book, not very much. For most people and most bodies of evidence, there is a wide range of beliefs that rationality permits them to have in response to that evidence. The argument, which takes inspiration from William James' ideas in 'The Will to Believe', proceeds from two premises. The first is a theory about the basis of epistemic rationality. It's called epistemic utility (...) theory, and it says that what it is epistemically rational for you to believe is what it would be rational for you to choose if you were given the chance to pick your beliefs and, when picking them, you were to care only about their epistemic value. So, to say which beliefs are permitted, we must say how to measure epistemic value, and which decision rule to use when picking your beliefs. The second premise is a claim about attitudes to epistemic risk, and it says that rationality permits many different such attitudes. These attitudes can show up in epistemic utility theory in two ways: in the way you measure epistemic value; and in the decision rule you use to pick beliefs. This book explores the latter. The result is permissivism about epistemic rationality: different attitudes to epistemic risk lead to different choices of prior beliefs; given most bodies of evidence, different priors lead to different posteriors; and even once we fix your attitudes to epistemic risk, if they are at all risk-inclined, there is a range of different priors and therefore different posteriors they permit. (shrink)

Two key questions of normative decision theory are: 1) whether the probabilities relevant to decision theory are evidential or causal; and 2) whether agents should be risk-neutral, and so maximise the expected value of the outcome, or instead risk-averse (or otherwise sensitive to risk). These questions are typically thought to be independent---that our answer to one bears little on our answer to the other. But there is a surprising argument that they are not. In this paper, (...) I show that evidential decision theory implies risk neutrality, at least in moral decision-making and at least on plausible empirical assumptions. Take any risk-aversion-accommodating decision theory, apply it using the probabilities prescribed by evidential decision theory, and every verdict of moral betterness you reach will match those of expected value theory. (shrink)

The orthodox theory of instrumental rationality, expected utility (EU) theory, severely restricts the way in which risk-considerations can figure into a rational individual's preferences. It is argued here that this is because EU theory neglects an important component of instrumental rationality. This paper presents a more general theory of decision-making, risk-weighted expected utility (REU) theory, of which expected utility maximization is a special case. According to REU theory, the weight that each outcome gets in decision-making is not the (...) subjective probability of that outcome; rather, the weight each outcome gets depends on both its subjective probability and its position in the gamble. Furthermore, the individual's utility function, her subjective probability function, and a function that measures her attitude towards risk can be separately derived from her preferences via a Representation Theorem. This theorem illuminates the role that each of these entities plays in preferences, and shows how REU theory explicates the components of instrumental rationality. (shrink)

Trust is a core feature of the physician-patient relationship, and risk is central to trust. Patients take risks when they trust their providers to care for them effectively and appropriately. Not all patients take these risks: some medical relationships are marked by mistrust and suspicion. Empirical evidence suggests that some patients and families of color in the United States may be more likely to mistrust their providers and to be suspicious of specific medical practices and institutions. Given both historical (...) and ongoing oppression and injustice in American medical institutions, such mistrust can be apt. Yet it can also frustrate patient care, leading to family and provider distress. In this paper, I propose one way that providers might work to reestablish trust by taking risks in signaling their own trustworthiness. This interpersonal step is not meant to replace efforts to remedy systemic injustice, but is an immediate measure for addressing mistrust in occurrent cases. (shrink)

In this paper, I examine the decision-theoretic status of risk attitudes. I start by providing evidence showing that the risk attitude concepts do not play a major role in the axiomatic analysis of the classic models of decision-making under risk. This can be interpreted as reflecting the neutrality of these models between the possible risk attitudes. My central claim, however, is that such neutrality needs to be qualified and the axiomatic relevance of risk attitudes needs (...) to be re-evaluated accordingly. Specifically, I highlight the importance of the conditional variation and the strengthening of risk attitudes, and I explain why they establish the axiomatic significance of the risk attitude concepts. I also present several questions for future research regarding the strengthening of risk attitudes. (shrink)

From what norms does the ethics of belief derive its oughts, its attributions of virtues and vices, responsibilities and irresponsibilities, its permissioning and censuring? Since my inductive risk account is inspired by pragmatism, and this method understands epistemology as the theory of inquiry, the paper will try to explain what the aims and tasks are for an ethics of belief, or project of guidance, which best fits with this understanding of epistemology. More specifically, this chapter approaches the ethics of (...) belief from a focus on responsible risk management, where doxastic responsibility is understood in terms of the degree of riskiness of agents’ doxastic strategies, a riskiness which is in turn most objectively measured through accordance or violation of inductive norms. Doxastic responsibility is attributable to agents on the basis of how epistemically risky was the process or strategy of inquiry salient in the etiology of their belief or in their maintenance of what one believes or accepts. (shrink)

As algorithms have become ubiquitous in consequential domains, societal concerns about the potential for discriminatory outcomes have prompted urgent calls to address algorithmic bias. In response, a rich literature across computer science, law, and ethics is rapidly proliferating to advance approaches to designing fair algorithms. Yet computer scientists, legal scholars, and ethicists are often not speaking the same language when using the term ‘bias.’ Debates concerning whether society can or should tackle the problem of algorithmic bias are hampered by conflations (...) of various understandings of bias, ranging from neutral deviations from a standard to morally problematic instances of injustice due to prejudice, discrimination, and disparate treatment. This terminological confusion impedes efforts to address clear cases of discrimination. -/- In this paper, we examine the promises and challenges of different approaches to disambiguating bias and designing for justice. While both approaches aid in understanding and addressing clear algorithmic harms, we argue that they also risk being leveraged in ways that ultimately deflect accountability from those building and deploying these systems. Applying this analysis to recent examples of generative AI, our argument highlights unseen dangers in current methods of evaluating algorithmic bias and points to ways to redirect approaches to addressing bias in generative AI at its early stages in ways that can more robustly meet the demands of justice. (shrink)

Does the content of a physically dangerous job affect the moral permissibility of hiring for that job? To what extent may employers consider costs in choosing workplace safety measures? Drawing on Kantian ethical theory, this article defends two strong ethical standards of workplace safety. First, the content of a hazardous job does indeed affect the moral permissibility of offering it. Unless employees need hazard pay to meet basic needs, it is permissible to offer a dangerous job only if prospective employees (...) have a reason other than hazard pay to choose this job instead of safer alternatives. Second, employers typically cannot justify omitting expensive safety measures by paying employees more, even if employees prefer higher pay to greater safety. Employers offering dangerous jobs must meet these two standards to avoid treating their employees merely as means. (shrink)

Risk assessment is one of the prerequisites for understanding its causes and possible consequences. We base our risk assessment on the principles described in the European standard EN 31000 - Risk Management Process. This standard comprehensively describes the continuous activities that are necessary in managing risks and minimizing their possible adverse effects on the operation of the system under investigation. In this activity, it is necessary to first identify the existing risks, then analyze and evaluate the identified (...) risks. In the analysis of existing risks, it is possible to use both qualitative and quantitative analytical methods, or combine them. We use qualitative methods in cases where we do not have a sufficient amount of input information, these are more subjective. Quantitative methods are more accurate, but also more demanding on input information and time. The choice of a suitable analytical method is a basic prerequisite for knowledge of risks and their evaluation. The values of individual risks obtained in this way are the basis for determining the measures that are ecessary to minimize them, i.e., to adjust them to an acceptable level. The draft measures are always based on the value of the individual components used to calculate the risk number, as well as on the value of the asset , which needs to be protected. Appropriately chosen analytical methods are one of the basic prerequisites for the consistent application of the principles of risk management, as a continuous process aimed at increasing the overall security of the system under study. In the article, the author describes the procedures used in risk assessment, as well as specific analytical methods that can be used in working with risks. The aim of identifying risk factors is to create a list of events that could cause undesirable disruption to ongoing processes. At this stage, we define all the risks that will be subsequently analyzed and evaluated. When identifying, we can use methods such as, e.g. SWOT, PHA (Preliminary Hazard Analysis) or CA (Checklist Analysis). Methods suitable for determining the causes and creating scenarios for the course of a risk event are ETA (Event Tree Analysis) or FTA (Fault Tree Analysis). The basic analysis of the system can be performed using the FMEA method (Failure Mode and Effect Analysis), which provides a numerical risk assessment. By comparison with the numerical value of the risk that we are willing to accept, we obtain 2 groups of risks. Acceptable, which will be given regular attention and unacceptable, which we will focus on in risk management and we will try to minimize its negative affect on the functioning of the system under study. (shrink)

Existential risks threaten the future of humanity, but they are difficult to measure. However, to communicate, prioritize and mitigate such risks it is important to estimate their relative significance. Risk probabilities are typically used, but for existential risks they are problematic due to ambiguity, and because quantitative probabilities do not represent some aspects of these risks. Thus, a standardized and easily comprehensible instrument is called for, to communicate dangers from various global catastrophic and existential risks. In this article, (...) inspired by the Torino scale of asteroid danger, we suggest a color coded scale to communicate the magnitude of global catastrophic and existential risks. The scale is based on the probability intervals of risks in the next century if they are available. The risks’ estimations could be adjusted based on their severities and other factors. The scale covers not only existential risks, but smaller size global catastrophic risks. It consists of six color levels, which correspond to previously suggested levels of prevention activity. We estimate artificial intelligence risks as “red”, while “orange” risks include nanotechnology, synthetic biology, full scale nuclear war and a large global agricultural shortfall (caused by regional nuclear war, coincident extreme weather, etc.) The risks of natural pandemic, supervolcanic eruption and global warming are marked as “yellow” and the danger from asteroids is “green”. -/- Keywords: global catastrophic risks; existential risks; Torino scale; policy; risk probability . (shrink)

I argue that prioritarianism cannot be assessed in abstraction from an account of the measure of utility. Rather, the soundness of this view crucially depends on what counts as a greater, lesser, or equal increase in a person’s utility. In particular, prioritarianism cannot accommodate a normatively compelling measure of utility that is captured by the axioms of John von Neumann and Oskar Morgenstern’s expected utility theory. Nor can it accommodate a plausible and elegant generalization of this theory that (...) has been offered in response to challenges to von Neumann and Morgenstern. This is, I think, a theoretically interesting and unexpected source of difficulty for prioritarianism, which I explore in this article. (shrink)

When we compare the influences of two causes on an outcome, if the conclusion from every group is against that from the conflation, we think there is Simpson’s Paradox. The Existing Causal Inference Theory (ECIT) can make the overall conclusion consistent with the grouping conclusion by removing the confounder’s influence to eliminate the paradox. The ECIT uses relative risk difference Pd = max(0, (R − 1)/R) (R denotes the risk ratio) as the probability of causation. In contrast, Philosopher (...) Fitelson uses confirmation measure D (posterior probability minus prior probability) to measure the strength of causation. Fitelson concludes that from the perspective of Bayesian confirmation, we should directly accept the overall conclusion without considering the paradox. The author proposed a Bayesian confirmation measure b* similar to Pd before. To overcome the contradiction between the ECIT and Bayesian confirmation, the author uses the semantic information method with the minimum cross-entropy criterion to deduce causal confirmation measure Cc = (R − 1)/max(R, 1). Cc is like Pd but has normalizing property (between −1 and 1) and cause symmetry. It especially fits cases where a cause restrains an outcome, such as the COVID-19 vaccine controlling the infection. Some examples (about kidney stone treatments and COVID-19) reveal that Pd and Cc are more reasonable than D; Cc is more useful than Pd. (shrink)

When we compare the influences of two causes on an outcome, if the conclusion from every group is against that from the conflation, we think there is Simpson’s Paradox. The Existing Causal Inference Theory (ECIT) can make the overall conclusion consistent with the grouping conclusion by removing the confounder’s influence to eliminate the paradox. The ECIT uses relative risk difference Pd = max(0, (R − 1)/R) (R denotes the risk ratio) as the probability of causation. In contrast, Philosopher (...) Fitelson uses confirmation measure D (posterior probability minus prior probability) to measure the strength of causation. Fitelson concludes that from the perspective of Bayesian confirmation, we should directly accept the overall conclusion without considering the paradox. The author proposed a Bayesian confirmation measure b* similar to Pd before. To overcome the contradiction between the ECIT and Bayesian confirmation, the author uses the semantic information method with the minimum cross-entropy criterion to deduce causal confirmation measure Cc = (R − 1)/max(R, 1). Cc is like Pd but has normalizing property (between −1 and 1) and cause symmetry. It especially fits cases where a cause restrains an outcome, such as the COVID-19 vaccine controlling the infection. Some examples (about kidney stone treatments and COVID-19) reveal that Pd and Cc are more reasonable than D; Cc is more useful than Pd. (shrink)

It is generally recognised that the potential positive and negative impacts of geoengineering will be distributed unevenly both geographically and temporally. The question of distributive justice in geoengineering thus is one of the major ethical issues associated with geoengineering. Currently, the question of distributive justice in geoengineering is framed in terms of who gets what (potential) benefits and harms from geoengineering, i.e. it is about the distribution of the outcomes of geoengineering. In this paper, I argue that the discussions on (...) distributive justice in geoengineering should not be outcome-based. Instead, it should be risk-based. I identify two problems for framing the question of distributive justice in geoengineering in terms of the distribution of its outcomes, i.e. the ‘if and then’ syndrome and the limited applicability of distributive principles in geoengineering policy, and suggest risk is a more proper object of distribution in the case of geoengineering. Following Hayenhjelm, I argue that the object of distribution in the case of fair distribution of risk should be (i) sources of risks and (ii) precautionary measures. I shall then demonstrate how it can be applied to the question of distributive justice in geoengineering. Finally, I end this paper by exploring the possible responses to the question of distributive justice in geoengineering by three major accounts of distributive justice, i.e. egalitarianism, prioritarianism, and sufficientarianism. (shrink)

Is it possible to compare civilizations one with another? Is it possible, in other words, to construct some neutral and objective framework in terms of which we could establish in what respects one civilization might deserve to be ranked more highly than its competitors? Morality will surely provide one axis of such a framework (and we note in passing that believers in Islam might quite reasonably claim that their fellow-believers are characteristically more moral than are many in the West). (...) Criteria such as material well-being will need to play a role, too, as also will happiness or pleasure (and again we note that it is not clear a priori that there is more happiness in the West than there is in other civilizations). But even happiness (pace some proponents of the utilitarian philosophy) comes in different types, and to count in the civilization stakes the happiness involved would presumably need to be of the right kind. We explore what this might mean in terms of the idea of a self-chosen life plan. (shrink)

Contrary to popular belief, population-wide preventive measures are rarely cost-reducing. Yet they can still be cost-effective, and indeed more cost-effective than treatment. This is often true of preventive measures that work by slightly reducing the already low risks of death faced by many people. This raises a difficult moral question: when we must choose between life-saving treatment, on the one hand, and preventive measures that avert even more deaths, on the other, is the case for prevention weakened when it works (...) by reducing many healthy people’s already low risks by a further tiny amount? I argue the answer is no. (shrink)

For aggregative theories of moral value, it is a challenge to rank worlds that each contain infinitely many valuable events. And, although there are several existing proposals for doing so, few provide a cardinal measure of each world's value. This raises the even greater challenge of ranking lotteries over such worlds—without a cardinal value for each world, we cannot apply expected value theory. How then can we compare such lotteries? To date, we have just one method for doing so (...) (proposed separately by Arntzenius, Bostrom, and Meacham), which is to compare the prospects for value at each individual location, and to then represent and compare lotteries by their expected values at each of those locations. But, as I show here, this approach violates several key principles of decision theory and generates some implausible verdicts. I propose an alternative—one which delivers plausible rankings of lotteries, which is implied by a plausible collection of axioms, and which can be applied alongside almost any ranking of infinite worlds. (shrink)

Looks into evaluation of information provision probability from different sources, based on use of linguistic variables. Formation of functions appurtenant for its unclear variables provides for adoption of decisions by the decision maker, in conditions of nonprobabilistic equivocation. The development of market relations in Ukraine increases the independence and responsibility of enterprises in justifying and making management decisions that ensure their effective, competitive activities. As a result of the analysis, it is determined that the condition of economic facilities can be (...) described and determined by the decision-maker, in the presence of the necessary information. The confidence of the decision-maker in the information received is different and the decisions made have a correspondingly different level of information risk. It is important to substantiate the procedure for assessing the numerical extent of information risk in decision-making based on the information obtained in conditions of uncertainty. The use of a linguistic variable in the processing of expert data presented in the form of a matrix of binary relations of values of the membership function, which allowed to move to further processing of knowledge to support decision-making in the management of industrial, commercial, financial and other activities. As a mathematical model for estimating the numerical measure of information risk when making decisions based on the information obtained in conditions of non-stochastic uncertainty, a model has been developed to model natural language uncertainties, which differs from existing ones by formalizing knowledge taking into account uncertainty of input information. Making such a clear decision in a fuzzy environment has appropriate values of effectiveness and risk. The paper proposes all the functions and accessories of indicators of both quantitative nature and qualitative nature to bring their values in the field of definition to one scale. Then the indicator of the effectiveness of decision-making will be a measure of the clarity of the cross-section of fuzzy subsets, which correspond to the introduced indicators of information risk. The condition of economic facilities can be described and determined by the decision-maker, if the necessary information is available. Decision-making on thenumerical measure of information risk must be determined by a set of basic indicators, which can be both quantitative and qualitative in nature. Predictive values of indicators should be determined in conditions of nonstochastic uncertainty. In this case, the indicators of a quantitative nature can be determined by fuzzy triangular numbers, which implement a high level of confidence in the subjective judgments of experts. Indicators of qualitative nature should be presented in linguistic variables. The values of the indicators of qualitative nature that are predicted must be considered for all fuzzy variable terms-sets of linguistic variables introduced into consideration. For any fuzzy variable, the introduction to the consideration of a clear set of values as carriers of the α-level of its membership function allows to reduce to a single interpretation of the predicted values of indicators of quantitative and qualitative nature in terms of non-stochastic uncertainty. (shrink)

During times of emergency like the pandemic itself, governments are often seen as exercising “exceptional power”. Given the state of growing urgency in responding to the pandemic, there is a worry that governments may resort to exercising their exceptional power arbitrarily—either willingly, unintentionally or perhaps even negligently. When power is exercised by states or even by non-state actors arbitrarily over a person or group, that is, at their own will in the absence of appropriate institutional checks and balances, republican theorists (...) argue that we are confronted with a threat to our freedom as non- domination. In this chapter, I explore whether, and in what ways, worries about domination could surface in the context of government’s enforcement of risk- containment measures in response to the pandemic. While imposition of these measures is deemed necessary and important for reducing risks in response to the pandemic, their imposition is prima facie problematic if it constitutes or entails wrongful exercise of arbitrary power, thereby risking domination of citizens. I motivate this claim by examining India’s initial response to the Covid-19 pandemic, particularly focussing on the public health emergency legislature (or lack thereof) authorising the implementation of emergency risk-containment measures. (shrink)

Humans often unconsciously perceive social robots involved in their lives as partners rather than mere tools, imbuing them with qualities of companionship. This anthropomorphization can lead to a spectrum of emotional risks, such as deception, disappointment, and reverse manipulation, that existing approaches struggle to address effectively. In this paper, we argue that a Virtual Interactive Environment (VIE) exists between humans and social robots, which plays a crucial role and demands necessary consideration and clarification in order to mitigate potential emotional risks. (...) By analyzing the relational nature of human-social robot interaction, we discuss the connotation of such a virtual interactive environment that is similar to the emotional states aroused when reading novels. Building on this comprehension, we further demonstrate that manufacturers should carry out comprehensive Virtual Interactive Environment Indication (VIEI) measures during human-social robot interaction with a stricter sense of responsibility when applying social robots. Finally, we contemplate the potential contributions of virtual interactive environment indication to existing robot ethics guidelines. (shrink)

Investigation of neural and cognitive processes underlying individual variation in moral preferences is underway, with notable similarities emerging between moral- and risk-based decision-making. Here we specifically assessed moral distributive justice preferences and non-moral financial gambling preferences in the same individuals, and report an association between these seemingly disparate forms of decision-making. Moreover, we find this association between distributive justice and risky decision-making exists primarily when the latter is assessed with the Iowa Gambling Task. These findings are consistent with neuroimaging (...) studies of brain function during moral and risky decision-making. This research also constitutes the first replication of a novel experimental measure of distributive justice decision-making, for which individual variation in performance was found. Further examination of decision-making processes across different contexts may lead to an improved understanding of the factors affecting moral behaviour. (shrink)

In biomedical measurement, biomarkers are used to achieve reliable prediction of, and useful causal information about patient outcomes while minimizing complexity of measurement, resources, and invasiveness. A biomarker is an assayable metric that discloses the status of a biological process of interest, be it normative, pathophysiological, or in response to intervention. The greatest utility from biomarkers comes from their ability to help clinicians (and researchers) make and evaluate clinical decisions. In this paper we discuss a specific methodological use of clinical (...) biomarkers in pharmacological measurement: Some biomarkers, called ‘surrogate markers’, are used to substitute for a clinically meaningful endpoint corresponding to events and their penultimate risk factors. We confront the reliability of clinical biomarkers that are used to gather information about clinically meaningful endpoints. Our aim is to present a systematic methodology for assessing the reliability of multiple surrogate markers (and biomarkers in general). To do this we draw upon the robustness analysis literature in the philosophy of science and the empirical use of clinical biomarkers. After introducing robustness analysis we present two problems with biomarkers in relation to reliability. Next, we propose an intervention-based robustness methodology for organizing the reliability of biomarkers in general. We propose three relevant conditions for a robust methodology for biomarkers: (R1) Intervention-based demonstration of partial independence of modes: In biomarkers partial independence can be demonstrated through exogenous interventions that modify a process some number of “steps” removed from each of the markers. (R2) Comparison of diverging and converging results across biomarkers: By systematically comparing partially-independent biomarkers we can track under what conditions markers fail to converge in results, and under which conditions they successfully converge. (R3) Information within the context of theory: Through a systematic cross-comparison of the markers we can make causal conclusions as well as eliminate competing theories. We apply our robust methodology to currently developing Alzheimer’s research to show its usefulness for making causal conclusions. (shrink)

Generalisation, universal knowledge claims, and recommendations within disaster studies are problematic because they lead to miscommunication and the misapplication of actionable knowledge. The consequences and impacts thereof are not often considered by experts; forgone as irrelevant to the academic division of labour. There is a disconnect between expert assertions for disaster risk reduction (DRR) and their practical suitability for laypersons. Experts currently assert independently of the context within which protective action measures (PAMs) are to be used, measures unconnected to (...) the people for whom they are developed. This has knock-on effects for DRR: much expert-generated science and policy remains unused, unimplemented, and sometimes misapplied. I use philosophical accounts of assertion and epistemic blame to highlight the epistemic relationship between experts and laypersons. This relationship includes responsibilities and agreements between epistemic agents. Since multilevel DRR knowledge still transfers top-down from experts to laypersons, if experts impair the epistemic relationship, they can be held epistemically blameworthy. To address the pervasiveness of top-down systems, I analyse the epistemic framings and narratives currently shaping DRR, and more specifically PAMs and campaigns. I deconstruct universal perspectives that dominate the epistemic processes of generating, disseminating, and implementing DRR knowledge and specifically for co-seismic landslide PAMs for Nepal. I argue for more inclusive, contextual, and epistemically responsible DRR. Co-production of knowledge should begin from the standpoints of marginalised persons who may have an epistemic advantage due to their socio-politically marginalised positions. Often these epistemic contributions are left out of DRR efforts because marginalised persons are rarely afforded equal, if any, epistemic agency, which results in epistemic gaps and a large pool of relevant knowledge remaining unincorporated and unused in DRR research and policy. (shrink)

Research suggests that parents tend to largely underestimate their child’s engagement in risky and/or hurtful behaviours as well as their experiences of harm online. While helpful, the available international evidence is not only limited but also does not reflect the New Zealand context. In addition, understanding parental knowledge of the online experiences of children is important as parents play a critical role in helping their child to prevent or deal with bothering experiences and risky behaviours as well as providing children (...) with emotional support when things go wrong online. To help close the gap of New Zealand-based evidence on the topic, this factsheet presents findings from a quantitative study conducted with New Zealand parents and their children. The objectives of the study are to measure parental knowledge of children’s experiences of risks and harm online, and to compare parents’ level of awareness with their child’s self-reported experiences. The study found a mismatch between parents’, caregivers’ and whānau awareness and their children’s reports of bothering or upsetting experiences online. (shrink)

What meaning does epidemiological evidence have for the individual? In evidence-based medicine, epidemiological evidence measures the patient’s risk of the outcome or the change in risk due to an intervention. The patient’s risk is commonly understood as an individual probability. The problem of understanding epidemiological evidence and risk thus becomes the challenge of interpreting individual patient probabilities. I argue that the patient’s risk is interpreted ontically, as a propensity. After exploring formidable problems with this interpretation (...) in the medical context, I propose an epistemic reinterpretation of individual patient probabilities as credences. On this view, epidemiological evidence informs medical uncertainty. (shrink)

Purpose of the present work is to attempt to give a glance at the problem of existential and anthropological risk caused by the contemporary man-made civilization from the perspective of comparison and confrontation of aesthetics, the substrate of which is emotional and metaphorical interpretation of individual subjective values and politics feeding by objectively rational interests of social groups. In both cases there is some semantic gap present between the represented social reality and its representation in perception of works of (...) art and in the political doctrines as well. Methodology of the research is evolutionary anthropologicalcomparativistics. Originality of the conducted analysis comes to the following: As the antithesis to biological and social reductionism in interpretation of the phenomenon of bio-power it is proposed a co-evolutionary semantic model in accordance with which the described semantic gap is of the substantial nature related to the complex module organization of a consistent and adaptive human strategy consisting of three associated but independently functional modules. Evolutionary trajectory of all anthropogenesis components including civilization cultural and social-political evolution is identified by the proportion between two macro variables – evolutionary effectiveness and evolutionary stability, i.e. preservation in the context of consequential transformations of some invariants of Homo sapiens species specificity organization. It should be noted that inasmuch as in respect to human, some modules of the evolutionary strategy assume self-reflection attributes, it would be more correctly to state about evolutionary correctness, i.e. correspondence to some perfection. As a result, the future of human nature depends not only on the rationalist principles of ethics of Homo species, but also on the holistic and emotionally aesthetic image of «Self». In conclusion it should be noted that there is a causal link between the development of High Hume technologies and the totality of the trend in the anthropological phenomenon of bio-power that permeates all the available human existence in modern civilization. As a result, there is a transformation of a contemporary social risk in the evolutionary civilization risk. (shrink)

Unlike its friendly cousin the placebo effect, the nocebo effect (the effect of expecting a negative outcome) has been almost ignored. Epistemic and ethical confusions related to its existence have gone all but unnoticed. Contrary to what is often asserted, adverse events following from taking placebo interventions are not necessarily nocebo effects; they could have arisen due to natural history. Meanwhile, ethical informed consent (in clinical trials and clinical practice) has centred almost exclusively on the need to inform patients about (...) intervention risks with patients to preserve their autonomy. Researchers have failed to consider the harm caused by the way in which the information is conveyed. In this paper, I argue that the magnitude of nocebo effects must be measured using control groups consisting of untreated patients. And, because the nocebo effect can produce harm, the principle of non-maleficence must be taken into account alongside autonomy when obtaining (ethical) informed consent and communicating intervention risks with patients. (shrink)

I propose a novel model of the human ego (which I define as the tendency to measure one’s value based on extrinsic success rather than intrinsic aptitude or ability). I further propose the conjecture that ego so defined both is a non-adaptive by-product of evolutionary pressures, and has some evolutionary value as an adaptation (protecting self-interest). I explore ramifications of this model, including how it mediates individuals’ reactions to perceived and actual limits of their power, their ability to cope (...) with risk and uncertainty, and how this model may interpolate between rational choice models and cognitive psychology. I develop numerous examples and applications, including poverty traps, to demonstrate the model’s predictive power to elucidate a broad range of social phenomena. -/- [December 2018: Updated version to submit for publication. Expanded Sections 4 and 5.1, revised Section 5.7] -/- . (shrink)

In biomedical measurement, biomarkers are used to achieve reliable prediction of, and useful causal information about patient outcomes while minimizing complexity of measurement, resources, and invasiveness. A biomarker is an assayable metric that discloses the status of a biological process of interest, be it normative, pathophysiological, or in response to intervention. The greatest utility from biomarkers comes from their ability to help clinicians (and researchers) make and evaluate clinical decisions. In this paper we discuss a specific methodological use of clinical (...) biomarkers in pharmacological measurement: Some biomarkers, called ‘surrogate markers’, are used to substitute for a clinically meaningful endpoint corresponding to events and their penultimate risk factors. We confront the reliability of clinical biomarkers that are used to gather information about clinically meaningful endpoints. Our aim is to present a systematic methodology for assessing the reliability of multiple surrogate markers (and biomarkers in general). To do this we draw upon the robustness analysis literature in the philosophy of science and the empirical use of clinical biomarkers. -/- After introducing robustness analysis we present two problems with biomarkers in relation to reliability. Next, we propose an intervention-based robustness methodology for organizing the reliability of biomarkers in general. We propose three relevant conditions for a robust methodology for biomarkers: (R1) Intervention-based demonstration of partial independence of modes: In biomarkers partial independence can be demonstrated through exogenous interventions that modify a process some number of “steps” removed from each of the markers. (R2) Comparison of diverging and converging results across biomarkers: By systematically comparing partially-independent biomarkers we can track under what conditions markers fail to converge in results, and under which conditions they successfully converge. (R3) Information within the context of theory: Through a systematic cross-comparison of the markers we can make causal conclusions as well as eliminate competing theories. We apply our robust methodology to currently developing Alzheimer’s research to show its usefulness for making causal conclusions. (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)

In the past months, there has been a lively debate about so-called COVID-19 apps developed to deal with the pandemic (Morley et al. 2020b). Some of the best solutions use the Bluetooth connection of mobile phones to determine contacts between people and therefore the probability of contagion, and then suggested related measures. In theory, it may seem simple. In practice, there are several ethical problems (Morley et al. 2020a), not only legal and technical ones. To understand them, it is useful (...) to distinguish between the validation and the verification of a system, remembering that these words are used here only in the design/engineering sense, and certainly not philosophically. The validation of a system answers the following question:“are we building the right system?”. (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)

Most forms of human papillomavirus can create alterations on a woman's cervix that can lead to cervical cancer in the long run, while others can produce genital or epidermal tumors. Cervical cancer is a leading cause of morbidity and mortality among women in low- and middle-income countries. The prediction of cervical cancer still remains an open challenge as there are several risk factors affecting the cervix of the women. By considering the above, the cervical cancer risk factor dataset (...) from KAGGLE data warehouse is executed for predicting the cervical cancer risk classes. The cervical cancer data set is normalised with incomplete data and Pattern Calibration. Secondly, the interpretive data analysis is carried out, and the target feature's dispersion of the cervical cancer risk is visualised. Thirdly, several classifiers are fitted to the unprocessed data set, and the performance is measured with pre and post feature scaling. Fourth, oversampling methodologies are applied to the pre - processed data set. Fifth, the oversampled dataset by differment methods are applied to all the classifiers and the performance is compared with pre and post feature scaling. Sixth, Precision, recall, Fscore, accuracy, and running time are some of the metrics used in performance analysis. The code is written in Python and executed with Anaconda Navigator on the Spyder framework. The findings of the experiments reveal that the Random forest classifier tends to sustain 96% accuracy pre and post scaling for unporocessed dataset. Similarly the same classifier tends to sustain 98% accuracy for all the oversampling techniques. (shrink)

In this issue of the Journal, Dundas et al. (Am J Epidemiol. 2014;180(2):197–207) apply a hitherto infrequent multilevel analytical approach: multiple membership multiple classification (MMMC) models. Specifically, by adopting a life-course approach, they use a multilevel regression with individuals cross-classified in different contexts (i.e., families, early schools, and neighborhoods) to investigate self-reported health and mental health in adulthood. They provide observational evidence suggesting the relevance of the early family environment for launching public health interventions in childhood in order to improve (...) health in adulthood. In their analyses, the authors distinguish between specific contextual measures (i.e., the association between particular contextual characteristics and individual health) and general contextual measures (i.e., the share of the total interindividual heterogeneity in health that appears at each level). By doing so, they implicitly question the traditional probabilistic risk factor epidemiology including classical “neighborhood effects” studies. In fact, those studies use simple hierarchical structures and disregard the analysis of general contextual measures. The innovative MMMC approach properly responds to the call for a multilevel eco-epidemiology against a widespread probabilistic risk factors epidemiology. The risk factors epidemiology is not only reduced to individual-level analyses, but it also embraces many current “multilevel analyses” that are exclusively focused on analyzing contextual risk factors. (shrink)

While there is an extensive literature on how the precautionary principle should be interpreted and when precautions should be taken, relatively little discussion exists about the fair distribution of costs of taking precautions. We address this issue by proposing a general framework for deciding how costs of precautions should be shared, which consists of a series of default principles that are triggered according to desert, rights, and ability to pay. The framework is developed with close attention to the pragmatics of (...) how distributions will affect actual behaviours. It is intended to help decision-makers think more systematically about distributional consequences of taking precautionary measures, thereby to improve decision-making. Two case studies—one about a ban on turtle fishing in Costa Rica, and one about a deep-sea mining project in Papua New Guinea—are given to show how the framework can be applied. (shrink)

In what respects is Western civilization superior or inferior to its rivals? In raising this question we are addressing a particularly strong form of the problem of relativism. For in order to compare civilizations one with another we would need to be in possession of a framework that is neutral and objective, a framework based on principles of evaluation which would be acceptable, in principle, to all human beings. Morality will surely provide one axis of such a framework (and (...) we note in passing that believers in Islam might quite reasonably claim that their fellow-believers are characteristically more moral than are many in the West). Criteria such as material wellbeing, too, will need to play a role, as also will happiness or pleasure (and again we note that it is not clear a priori that there is more happiness in the West than there is among the citizens of other civilizations). Since, however, these axes of evaluation do not run in tandem, we cannot expect to be able to formulate some single criterion which would enable us to rank civilizations in a simple unilinear order. Even happiness (pace some proponents of the utilitarian philosophy) comes in different types, and to count in the civilization stakes the happiness involved would presumably need to be of the right kind. Thus it is not clear that happiness derived from, say, taking drugs or torturing small animals is going to be able to count in favor of a civilization as much as, say, happiness derived from reading poetry or planting corn. Hence, for these and other reasons, we will have to deal with a multidimensional framework, in which some civilizations may excel along some axes but do badly on others. A further problem turns on the fact that there is no such relation as better than. Rather, when A is better than B then this is always in some respect C. Yet even when we compare one thing with another in some given respect we are not always dealing with a simple linear order. This is because the relation ‘being better than in respect C’ is not in every case transitive.. (shrink)

This chapter sharpens the book’s criticism of exclusivist responsible to religious multiplicity, firstly through close critical attention to arguments which religious exclusivists provide, and secondly through the introduction of several new, formal arguments / dilemmas. Self-described ‘post-liberals’ like Paul Griffiths bid philosophers to accept exclusivist attitudes and beliefs as just one among other aspects of religious identity. They bid us to normalize the discourse Griffiths refers to as “polemical apologetics,” and to view its acceptance as the only viable form of (...) pluralism. This reasoning may seem initially plausible, but on closer examination his and other’s defence of the reasonableness of exclusivist responses to religious multiplicity fall apart. Informed by our study of luck-leaning theological explanations of religious difference and the counter-inductive thinking they exemplify, I argue that exclusivist responses to religious multiplicity are best explained by personal and group bias, and that a discourse between exclusivist authors or sects is beyond the pale of reasonable disagreement. Our study of descriptive (psychological) and prescriptive (religious) fideism in the first sections of Chapter Five suggests that we turn back to formal features of doxastic methods (i.e., of how people process), features that may be straightforwardly tested for in studies utilizing scales of religious orientation. These formal features allow us to better recognize not only the multiplicity of models of faith that religious adherents adhere to, but also that the relationship between forms of fideism is scalar: there is a spectrum of views running from rationalism to fideism, and at the fideistic end from moderate to strong forms of religious fideism. I further explain why developing tests and markers for a high degree of fideistic orientation is important to all those who study religion. The second half of the chapter turns to criticism or censure of exclusivist attitudes to religious multiplicity, in contrast to apologetic defenses of exclusivism. While we have examined the close connections between fideism and fundamentalism, and again between fundamentalism and exclusivism in earlier chapters, a sharper focus reveals an important but little-recognized distinction reflected in the literature: the distinction between religion-specific (or particularist) and mutualist exclusivism. The mutualist doesn’t talk just about the right of adherents of one specific religion to assert exclusivism, but the adherents of any and all “home” religions. I argue that some previously unrecognized problems for the reasonableness of exclusivist responses to religious multiplicity are brought to light when we make the distinction between the two basic ways to understand the claim that exclusivists are making. I put particularist (Barth, Lindbeck, Plantinga) and mutualist (Griffiths, Gellman, Margalit, D’Costa) defenses of exclusivism on the horns of a dilemma, and argue that despite the popularity it presently enjoys among post-liberal theologians, a close examination reveals that the very conceptual coherence of mutualist exclusivism is in serious doubt. (shrink)

Audience segmentation is necessary in health communications to ensure equitable resource distribution. Peer crowds, which are macro-level teen subcultures, are effective psychographic segments for health communications because each crowd has unique mindsets, values, norms, and health behavior profiles. These mindsets affect behaviors, and can be used to develop targeted health communication campaigns to reach those in greatest need. Though peer crowd research is plentiful, no existing peer crowd measurement tool has been formally validated. As such, we developed and validated Virginia's (...) Mindset Lens Survey (V-MLS), a mindset-based teen peer crowd segmentation survey to support health communication efforts. Using an online convenience sample of teens (N = 1,113), we assessed convergent and discriminant validity by comparing the V-MLS against an existing, widely-used peer crowd survey (I-Base Survey®) utilizing a multi-trait multi-method matrix. (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)