Process reliabilism is a theory about ex post justification, the justification of a doxastic attitude one has, such as belief. It says roughly that a justified belief is a belief formed by a reliable process. It is not a theory about ex ante justification, one’s justification for having a particular attitude toward a proposition, an attitude one might lack. But many reliabilists supplement their theory such that it explains ex ante justification in terms of reliable processes. In this (...) paper I argue that the main way reliabilists supplement their theory fails. In the absence of an alternative, reliabilism does not account for ex ante justification. (shrink)

Prioritarianism is a variant of utilitarianism. It differs from utilitarianism in that benefiting individuals matters more the worse off these individuals are. On this view, there are two standard ways of handling risky prospects: Ex-Post Prioritarianism adjusts for prioritizing the worse off in final outcomes and then values prospects by the expectation of the sum total of those adjusted values, whereas Ex-Ante Prioritarianism adjusts for prioritizing the worse off on each individual's expectation and then values prospects by the sum (...) total of those adjusted expectations. A standard objection to Ex-Post Prioritarianism is that it violates Ex-Ante Pareto, that is, it prescribes choices that worsen the expectations for everyone. In this article, I argue that Ex-Ante Prioritarianism suffers from much the same problem: it violates a sequential version of Ex-Ante Pareto, that is, it prescribes sequences of choices that worsen the expectations for everyone. (shrink)

According to contractualist theories in ethics, whether an action is wrong is determined by whether it could be justified to others on grounds no one could reasonably reject. Contractualists then think that reasonable rejectability of principles depends on the strength of the personal objections individuals can make to them. There is, however, a deep disagreement between contractualists concerning from which temporal perspective the relevant objections to different principles are to be made. Are they to be made on the basis of (...) the prospects the principles give to different individuals ex ante or on the basis of the outcomes of the principles ex post? Both answers have been found to be problematic. The ex ante views make irrelevant information about personal identity morally significant and lead to objectionable ex ante rules, whereas ex post views lead to counterintuitive results in the so-called different harm and social risk imposition cases. The aim of this article is to provide a new synthesis of these views that can avoid the problems of the previous alternatives. I call the proposal ‘risk-acknowledging’ ex post contractualism. The crux of the view is to take into account in the comparisons of different objections both the realized harms and the risks under which individuals have to live. (shrink)

The ex ante Pareto principle has an intuitive pull, and it has been a principle of central importance since Harsanyi’s defence of utilitarianism. The principle has been used to criticize and refine a range of positions in welfare economics, including egalitarianism and prioritarianism. But this principle faces a serious problem. I have argued elsewhere :303-323 2017) that the concept of ex ante Pareto superiority is not well defined, because its application in a choice situation concerning a fixed (...) population can depend on how the members of that population are designated. I show in this paper that in almost all cases of policy choice, there will be numerous sets of rival designators for the same fixed population. I explore two ways that we might complete the definition of ex ante Pareto superiority. I call these the ‘supervaluationist’ reading and the ‘subvaluationist’ reading. I reject the subvaluationist reading as uncharitable, and argue that the supervaluationist reading is the most promising interpretation of the ex ante Pareto principle. I end by exploring some of the implications of this principle for prioritarianism and egalitarianism. (shrink)

In this note, I provide an axiomatic characterization of the relative utilitarian bargaining solution to Nash bargaining problems. The solution is obtained when Nash’s independence of irrelevant alternatives axiom is replaced by the weak linearity axiom, while retaining the other three axioms. RU maximizes the sum of proportional gains, or, equivalently, minimizes the sum of proportional losses. RU is scale invariant and compared to the Nash and Kalai and Smorodinsky solutions, it is ex ante efficient when the bargaining (...) class='Hi'>problem is considered as a lottery of future bargaining problems. (shrink)

This paper considers the tension between timelessness and timeboundedness in legal interpretation, examining parallels between sacred texts and secular law. It is argued that familiar dualities such as those between statute and judge-made law, law and equity, written and spoken discourse, dictionary meaning versus intended or contextual meaning, can be examined using this timeless/timebounded framework. Two landmark English cases, DPP v Shaw (1961) and R v R (1991) are analyzed as illustrating contrasting aspects of the socio-legal politics of “reasoning backwards”. (...) The related temporal distinction between ex ante and ex post points of view is examined both within legal theory and as a key issue for linguistic and semiotic systems. The argument is made that this distinction is the key to a wide range of methodological and theoretical problems in relating linguistics and semiotics to law. (shrink)

The last years’ achievements in neuroscience are key for a philosophical analysis focused on the mind-body problem, such as the phenomenological approach.The digital evolution, on the one hand, faces us with the interaction between the world of reality and the world of possibility. This means more than a mere coexistence between these two dimensions. Rather, a concrete feedback occurs among them, and this brings out unprecedented and unavoidable issues with regard to perceptual processes. On the other hand, the digital (...) evolution allows for analyzing data and monitoring environmental systems, thus reasoning in a predictive way, anticipating problems, and checking ex ante their evolution and outcomes.Neuroscience, for its part, with the experiments of Libet and their subsequent interpretations, has highlighted a consciousness of the unconscious made of ballistic and automatic processes, which constitutes the starting phase of our decisions and actions. This further confirmed that sequential and linear thinking is unable to address the brain-environment relationship that is key in understanding any cognitive process.This analysis confirms the relevance of different aspects of Husserl’s phenomenology. There is, however, a “but,” which significantly reduces the extent of adherence to his point of view. Husserl assumed that an implicit horizon precedes or accompanies the acts of conscience. This is the material, impressional, passive, receptive, and, in some way, tacit dimension, strictly connected to the issue of genesis, i.e. the process of constitution of the analyzed entities. Thus, he drew a clear dividing line between this dimension and the phases of the self-controlling, vigilant conscience and its activity. In fact, his approach to the phenomenological problem is mainly oriented toward these phases. (shrink)

Stuart Russell defines the value alignment problem as follows: How can we build autonomous systems with values that “are aligned with those of the human race”? In this article I outline some distinctions that are useful for understanding the value alignment problem and then propose a solution: I argue that the methods currently applied by computer scientists for embedding moral values in autonomous systems can be improved by representing moral principles as conceptual spaces, i.e. as Voronoi tessellations of (...) morally similar choice situations located in a multidimensional geometric space. The advantage of my preferred geometric approach is that it can be implemented without specifying any utility function ex ante. (shrink)

Greaves and MacAskill argue for ​axiological longtermism​, according to which, in a wide class of decision contexts, the option that is ​ex ante best is the option that corresponds to the best lottery over histories from ​t onwards, where ​t ​is some date far in the future. They suggest that a ​stakes-sensitivity argument may be used to derive ​deontic longtermism from axiological longtermism, where deontic longtermism holds that in a wide class of decision contexts, the option one ought to (...) choose is the option that corresponds to the best lottery over histories from ​t onwards, where ​t is some date far in the future. This argument appeals to the ​Stakes Principle​: when the axiological stakes are high, non-consequentialist constraints and prerogatives tend to be insignificant in comparison, so that what one ought to do is simply whichever option is best. I argue that there are strong grounds on which to reject the ​Stakes Principle​. Furthermore, by reflecting on the Non-Identity Problem, I argue that there are plausible grounds for denying the existence of a sound argument from axiological longtermism to deontic longtermism insofar as we are concerned with ways of improving the value of the future of the kind that are focal in Greaves and MacAskill’s presentation. (shrink)

Utilitarianism and prioritarianism make a strong assumption about the uniqueness of measures of how good things are for people, or for short, individual goodness measures. But it is far from obvious that the presupposition is correct. The usual response to this problem assumes that individual goodness measures are determined independently of our discourse about distributive theories. This article suggests reversing this response. What determines the set of individual goodness measures just is the body of platitudes we accept about distributive (...) theories. When prioritarianism is taken to have an ex ante form, this approach vindicates the utilitarian and prioritarian presupposition, and provides an answer to an argument due to Broome that for different reasons to do with measurement, prioritarianism is meaningless. (shrink)

Suppose n Bayesian agents need to make a decision as a group. The groupas a whole is also supposed to be a Bayesian agent whose probabilities andutilities are derived or aggregated in reasonable ways from the probabilitiesand utilities of the group members. The aggregation could beex ante, i.e., interms of expected utilities, or it could be ex post, i.e., in terms of utilitiesonly, or in terms of utilities and probabilities separately. This study exploresthe ex post approach. Using the Bolker/Jeffrey (...) framework, we show thatex post aggregation is subject to an instability phenomenon. That is, it mayhappen that the group preference between actions ``flips back and forth'''' dependingon the level of detail in which the decision problem is described. Structurally verysimilar phenomena also occur elsewhere in social choice theory, in statistics (Simpson''sParadox), and in voting theory (Ostrogorski''s Paradox). (shrink)

Describes the author’s value of choice account of responsibility and examines a response by Stemplowska to an objection to this account, raised by Alex Voorhoeve. Argues that the problem raised by Voorhoeve’s example concerns the way in which risk is taken into account in contractualism rather than the value of choice account of responsibility. Departs from the author’s earlier work in arguing that the risk of harm should sometimes be taken into account on an ex ante rather than (...) an ex post basis. (shrink)

Many political libertarians argue, or assume, that negative moral duties (duties not to harm others) prevail over positive moral duties (duties to aid others), and that the legal system ought to reflect such pre-eminence. I call into question this strategy for defending a libertarian order. I start by arguing that a successful account of the well-known case of a runaway trolley that is about to kill five innocents unless a passer-by diverts it onto one innocent, killing him, should point to (...) (i) the ex ante advantage to all six of being subject to a policy of redirection of runaway trolleys, and (ii) the causal structure of killing vs. letting-die choices. I then argue that this account of the trolley case entails that legal systems reflecting the relative stringency of negative and positive moral duties should uphold redistributive measures at odds with libertarianism. The assumption that the legal system ought to reflect, through non-causal routes, moral principles and their relative weights leads to either an ideal-theory (in Rawls's sense) assessment of libertarianism or a symbolic account of the relationships between morality and law. Libertarians should undermine this assumption if they hope to offer an all-things-considered case for free markets. (shrink)

Closure principles loom large in recent internalist critiques of epistemic externalism. Cohen (Philos Phenomenol Res 65:309–329, 2002, Philos Phenomenol Res 70:417–430, 2005), Vogel (J Philos 97:602–623, 2000), and Fumerton (Meta-Epistemology and skepticism. Rowman and Littlefield, Lanham, 1995) argue that, given closure, epistemic externalism is committed to the possibility of implausibly easy knowledge. By contrast, Zalabardo (Philos Rev 114:33–61, 2005) proposes that epistemic closure actually precludes the possibility of easy knowledge, and appeals to closure principles to solve the problem of (...) easy knowledge. In my view, disagreement over closure’s bearing on externalism and the problem of easy knowledge is rooted in a failure to bear in mind the familiar distinction between ex ante and ex post forms of epistemic justification and warrant. When this distinction is kept in focus, the result is clear: epistemic closure provides no relief from the problem of easy knowledge. (shrink)

Ex-ante deontology is an attempt to combine deontological constraints on doing or intending harm with the idea that one should act in everyone’s interest if possible. I argue that ex-ante deontology has serious problems in cases where multiple decisions are to be made over time. I then argue that these problems force us to choose between commonsense deontological morality and a more consequentialist morality. I suggest that we should choose the latter.

This article further studies ex ante efficient auctions in the setting of Stegeman (1996 Participation costs and efficient auctions, Journal of Economic Theory 71, 228–259.), where there exist entry costs for bidders who know their valuations. An alternative method is established to address efficient auctions. This method illustrates the intuition why the ex ante efficient allocation is Bayesian implementable through the Stegeman (1996) auction (a second-price auction with a reserve price equal to seller’s valuation and no entry fee). (...) More importantly, our method leads to an alternative ex ante efficient auction that implements uniquely the efficient entry. Thus, this alternative auction solves the entry indeterminacy problem of the Stegeman (1996) auction, which generally induces inefficient entry equilibria besides the efficient ones. (shrink)

Ex ante contractualism holds that in situations involving risk we ought to act in accordance with principles that license the action that satisfies the strongest individual claim, where those claims are a function of the expected value that a given policy gives each person ex ante. I here challenge ex ante contractualism on contractualist grounds. I argue that adopting ex ante contractualism would have far reaching implications that contractualists, or many nonconsequentialist in general, would find very (...) hard to accept. I conclude that to block these implications, contractualists should adopt an ex post approach to deal with decisions under risk. (shrink)

We study behind-the-scenes investor activism promoting environmental, social, and governance improvements by means of a proprietary dataset of a large international, socially responsible activist fund. We examine the activist’s target selection, forms of engagement, impact on ESG performance, drivers of success, and effects on the targets’ operations and value creation. Target firms are typically large and visible, perform well, and have high liquidity and low ESG performance. Engagement induces ESG rating adjustments: firms with poor ex ante ESG ratings experience (...) a ratings increase after complying with the activist’s demands, whereas firms with high ex ante ESG ratings experience a ratings decrease following the revelation of their ESG problems. Activism that is focused on environmental and social issues is more likely to succeed if targets are ESG-sensitive. Successful engagements boost targets’ sales. Risk-adjusted excess stock returns of successful engagements outperform those of unsuccessful engagements by 2.7%. Results are especially strong for firms with low ex ante ESG scores. Specifically, targeted firms in the lowest ex ante ESG quartile outperform matched peers by 7.5% in the year after the end of the engagement. Our results thus suggest that the activism regarding corporate social responsibility generally improves ESG practices and corporate sales and is profitable to the activist. Taken together, we provide direct evidence that ethical investing and strong financial performance, both from the activist’s and the targeted firm’s perspective, can go hand-in-hand together. (shrink)

At present, peer review is the most common method used by funding agencies to make decisions about resource allocation. But how reliable, efficient, and fair is it in practice? The ex ante evaluation of scientific novelty is a fundamentally uncertain endeavor; bias and chance are embedded in the final outcome. In the current study, I will examine some of the most central problems of peer review and highlight the possible benefits of using a lottery as an alternative decision-making mechanism. (...) Lotteries are driven by chance, not reason. The argument made in the study is that the epistemic landscape could benefit in several respects by using a lottery, thus avoiding all types of bias, disagreement, and other limitations associated with the peer review process. Funding agencies could form a pool of funding applicants who have minimal qualification levels and then select randomly within that pool. The benefits of a lottery would not only be that it saves time and resources, but also that it contributes to a more dynamic selection process and increases the epistemic diversity, fairness, and impartiality within academia. (shrink)

Several authors have argued that contractualism faces a dilemma when it comes to justifying risks generated by socially valuable activities. At the heart of the matter is the question of whether contractualists should adopt an ex post or an ex ante perspective when assessing whether an action or policy is justifiable to each person. In this paper I argue for the modest conclusion that ex post contractualism is a live option notwithstanding recent criticisms raised by proponents of the ex (...) ante perspective. I then consider how an ex post contractualist can best respond to the problem that it seems to prohibit a range of intuitively permissible and socially valuable activities. (shrink)

The concept of ‘pareto superiority’ plays a central role in ethics, economics, and law. Pareto superiority is sometimes taken as a relation between outcomes, and sometimes as a relation between actions—even where the outcomes of the actions are uncertain. Whether one action is classed as (ex ante) pareto superior to another depends on the prospects under the actions for each person concerned. I argue that a person’s prospects (in this context) can depend on how that person is designated. Without (...) any constraints on acceptable designators, then, the concept of pareto superiority is ill defined and gives inconsistent results. I consider various ways of completing the definition and draw out some surprising implications. (shrink)

Luck egalitarianism assigns a central role to personal responsibility in egalitarian justice. In the context of healthcare, luck egalitarianism is the view that the distribution of medical and healthcare resources—or common resources in general—should respond to the (im)prudence of individuals. Recently, Joar Björk, Gert Helgesson, and Niklas Juth have argued that it is impractical to use luck egalitarianism as a normative framework in healthcare because it has no reasonable way of dealing with the imprudent. In response to their argument, this (...) paper first suggests that the epistemic problems of applying luck egalitarianism to the healthcare context raised by Björk et al. can be circumvented by using the exemption system as a policy application of luck egalitarian healthcare justice. This paper then shows that an _ex ante_ policy, a tax system with refunds, can reasonably be adopted as a luck egalitarian institutional design of healthcare policy. We argue that the proposed conception of luck egalitarianism can deal with the problem of differential option luck. Finally, we show that the threshold problem for the definition of imprudence does not refute the proposed _ex ante_ policy. (shrink)

In this paper a critique to philosophical approaches that presuppose invariant knowledge for policy purposes is carried out. It is shown that socioeconomic processes do not fit to the logic of stable causal factors, but they are more suited to the logic of "open-ended results". On the basis of this ontological variation it is argued that ex-ante interventions are not appropriate in the socioeconomic realm. On the contrary, they must be understood in a “dynamic” sense. Finally, derivational robustness analysis (...) is proposed as a useful tool for overcoming the problem of “overconstraint”, a typical problem of economic models. (shrink)

Theoretical studies suggest that, when determining the workplace safety level, CEOs face a trade-off between ex ante safety-improving expenditures and the expected losses due to ex post injury and illness occurrences. We examine whether firms with higher CEO inside debt holdings have safer workplaces. Using establishment-level employee workplace injury and illness data, we find that CEOs’ inside debt holdings are negatively associated with employee workplace injury and illness cases. This relationship is more pronounced if workers’ compensation premiums are more (...) sensitive to injury claims and for firms with more government business and less pronounced for firms with higher levels of secured debt. We provide some evidence that our main result stems from CEOs increasing safety investments. Our empirical results are shown to be robust under a batch of robustness tests and when considering potential endogeneity problems. Our findings suggest that CEOs with higher levels of inside debt holdings are more sensitive to wealth loss due to employee injury and illness, leading to a safer workplace. (shrink)

This paper provides a systematic literature review, analysis and discussion of methods that are proposed to practise ethics in research and innovation. Ethical considerations concerning the impacts of R&I are increasingly important, due to the quickening pace of technological innovation and the ubiquitous use of the outcomes of R&I processes in society. For this reason, several methods for practising ethics have been developed in different fields of R&I. The paper first of all presents a systematic search of academic sources that (...) present and discuss such methods. Secondly, it provides a categorisation of these methods according to three main kinds: ex ante methods, dealing with emerging technologies, intra methods, dealing with technology design, and ex post methods, dealing with ethical analysis of existing technologies. Thirdly, it discusses the methods by considering problems in the way they deal with the uncertainty of technological change, ethical technology design, the identification, analysis and resolving of ethical impacts of technologies and stakeholder participation. The results and discussion of our literature review are valuable for gaining an overview of the state of the art and serve as an outline of a future research agenda of methods for practising ethics in R&I. (shrink)

[Andrew Williams] It is difficult for prioritarians to explain the degree to which justice requires redress for misfortune in a way that avoids imposing unreasonably high costs on more advantaged individuals whilst also economising on intuitionist appeals to judgment. An appeal to hypothetical insurance may be able to solve the problems of cost and judgment more successfully, and can also be defended from critics who claim that resource egalitarianism is best understood to favour the ex post elimination of envy over (...) individual endowments. /// [Michael Otsuka] Inequality is intrinsically bad when and because it is unfair. It follows that the ideal of equality is not necessarily realised by a distribution of resources which is envy-free prior to the resolution of risks against which people have an equal opportunity to insure. Even if the upshot of such an ex ante envyfree distribution is just, it is not necessarily fair. (shrink)

Luck egalitarianism, a theory of distributive justice, holds that inequalities which arise due to individuals’ imprudent choices must not, as a matter of justice, be neutralized. This article deals with the possible application of luck egalitarianism to the area of health care. It seeks to investigate whether the ethos of luck egalitarianism can be operationalized to the point of informing health care policy without straying from its own ideals. In the transition from theory to practise, luck egalitarianism encounters several difficulties. (...) We argue that the charge of moral arbitrariness can, at least in part, be countered by our provided definition of “imprudent actions” in the health area. We discuss the choice for luck egalitarianism in health care between ex ante and ex post policy approaches, and show how both approaches are flawed by luck egalitarianism’s own standards. We also examine the problem of threshold setting when luck egalitarianism is set to practise in health care. We argue that wherever policy thresholds are set, luck egalitarianism in health care risks pampering the imprudent, abandoning the prudent or, at worst, both. Furthermore, we claim that moves to mitigate these risks in turn diminish the normative importance of the ethos of luck egalitarianism to policy. All in all, our conclusion is that luck egalitarianism cannot be consistently applied as a convincing and relevant normative principle in health care policy. (shrink)

Systemic risks are risks produced through interconnected non-wrongful actions of individuals, in the sense that an individual's action is a negligible cause of the risk. Due to scale effects of interaction, their consequences can be serious but they are also difficult to predict and assess via a risk assessment. Since we can have good reason to engage in the interconnected activities giving rise to systemic risk, we incur a concurrent collective responsibility to ensure that the risks are fairly distributed and (...) well regulated. James argues that fairness in this context requires taking reasonably available precautions ensuring for each risk-bearer a favourable ratio of expected benefits over expected losses. In sections 2 and 3 we argue that such a conception of fairness applies but only on the condition that the systemic risks created are irreversible risks and that the general background conditions of justice are imperfectly fair. When risks are reversible, compensatory justice can correct for unfairness in risk imposition. Where risks are irreversible, compensatory justice necessarily fails, giving rise to a collective responsibility to regulate fairly ex ante. Additionally, where background conditions of justice are fully fair and the systemic risk is well understood, risk bearers can be said to have consented to the systemic risk. If they are not fair, we argue that the primary political obligation should lie in fixing the fairness of the backgrounds of justice. A related reason for addressing the general background conditions of fairness is that James’ account of fairness in systemic risk imposition encounters a baseline problem. If expected risks and benefits are calculated again an unfair historic background condition, systemic risk imposition would not be fully fair. Section 4 shows why differences in evidentiary uncertainty as to probability and levels of harm and effective responses require a normatively appropriate response in the form of additional precautions. We show that the evidentiary standards set for risk-based cost-benefit analysis have a connection with deontology because they express a postulate of equal treatment in formal terms. Systemic risks can have different possible degrees of epistemological certainty due to factors of social and natural origin, such as more available research funding or higher degrees of complexity for some systemic risks but not others. These differences have to be mitigated by taking even greater precautions in difficult-to-research systemic risks. (shrink)

Frances Kamm distinguishes between changes or enhancements that are made before a child exists (ex ante changes) and those that are made once a child exists (ex post changes), and she argues that ex ante changes do not show disrespect or, as Michael Sandel would put it, lack of love, for a person, since the person does not yet exist. In this paper, I argue that it is important to distinguish between ex ante enhancements that are morally (...) neutral and those that are morally dubious, and that the latter ones are morally objectionable even if the persons do not yet exist. (shrink)

Private law and regulation are constantly involved in the evaluation of conflicts of interest, judging some of them salutary, with others requiring adjustment. Focusing on the question of conflicts of interest allows us to clarify our vision of when such adjustment is appropriate and, more specifically, when the law should supply an infrastructure for cooperative behavior. Thus, the prism of conflicts of interest provides a lens through which to view basic legal problems that turn on whether individual actors will be (...) deemed responsible to some joint interest or whether they will be at liberty to pursue their individual interests despite the adverse effects of such activity on others. This article proposes a conflicts of interest perspective for examining contract law and its immediate surroundings. It suggests a map of conflicts of interest along three axes: the remedial axis; the axis of positive duties to avoid conflicts; and the axis of the transition from independence to loyalty. Applying the map to contract doctrine, the article examines a number of contract doctrines including: remedies for breach of contract; modification; conditions; good faith in performance; and formation. The article goes on to apply the map of conflicts to two complex fact situations: corporate acquisitions and corporate bankruptcies. The analysis underscores the fact that conflicts of interest rules do not simply protect existing interests, but also contribute to the very constitution of those interests. Recognizing the constitutive role of legal rules raises questions about our ability to determine interests ex ante and thus calls for a more nuanced approach to gauging the incentive effects of a legal regime. (shrink)

Consider an agent who faces choice problems and learns information about an objective state of the world through a technology of sequential experiments. We consider two cases of learning costs. In the first, the agent discounts future payoffs geometrically. In the second, she incurs a constant flow cost of time. If the observable data consist only of the joint distributions over chosen actions and decision times, an analyst can uniquely identify the discount factor in the first case and the flow (...) cost of time in the second case. Moreover, we show how an analyst can recover the agent’s ex ante welfare in both cases, besides identifying her prior belief. Our approach does not rely on any knowledge about the underlying sequential experiment. (shrink)

We propose a construct, the Trust Triangle, that highlights three primary mechanisms that provide ex post accountability for opportunistic behavior and motivate ex ante trust in economic relationships. The mechanisms are a society’s legal and regulatory framework, market-based discipline and reputational capital, and culture, including individual ethics and social norms. The Trust Triangle provides a framework to conceptualize the relationships between trust, corporate accountability, legal liability, reputation, and culture. We use the Trust Triangle to summarize recent developments in the (...) empirical finance literature that examine how trust is formed and how trust, or its absence, affects financial markets, firm performance, and the incidence of financial fraud. To date, most studies examine only one leg of the Trust Triangle in isolation. The evidence, however, indicates that all three legs of the Trust Triangle have first-order effects on a wide range of financial outcomes and that they are interrelated. Attempts to model trust and trustworthiness that do not incorporate all three aspects of the Trust Triangle will therefore miss essential aspects of the basic economic problem of how counterparties overcome the risks of moral hazard, asymmetric information, and opportunism to engage in mutually beneficial exchange and production activities. We focus especially on culture-related mechanisms, a recently developed area in empirical finance research that has potential to influence the more established research on laws and reputation. (shrink)

Anna Mahtani describes a puzzle meant to show that the Ex-Ante Pareto Principle is incomplete as it stands and, since it cannot be completed in a satisfactory manner, decades of debate in welfare economics and ethics are undermined. In this paper, we provide a better solution to the puzzle which saves the Ex-Ante Pareto Principle from this challenge. We also explain how the plausibility of our solution is reinforced by its similarity to a standard solution to an analogous (...) puzzle in quantified epistemic logic. We also show that even if the puzzle were to remain unsolved, its impact on welfare economics and ethics would be limited. (shrink)

Dans «A Society of Individuals», j’esquisse une société qui n’a pas de bien propre, pas de fin sociale, mais qui existe plutôt pour permettre à chacun de ses membres de mieux poursuivre son propre bien, facilitant la coopération et résolvant le problème d’interaction de base, à savoir le fait que la maximisation de l’utilité et l’optimisation Pareto sont parfois incompatibles. Le point de vue orthodoxe défend la rationalité de la maximisation; je défends l’optimisation Pareto. Je soutiens que si nous pouvions (...) fixer les caractéristiques de notre société par un accord préalable, nous nous entendrions sur une société d’individus, et que le fait que nous nous entendions ex ante sur une certaine pratique sociale ou institution est la meilleure justification possible qu’elle constitue pour nous une norme.J’esquisse ensuite quelques-unes des caractéristiques principales de cette société. En faisant cela, je suppose que les membres de la société ne sont pas tous adeptes du contractarianisme, mais qu’ils peuvent soutenir différentes conceptions raisonnables que la société doit chercher à accommoder. Je considère la façon dont plusieurs prétendus droits, comme un droit à certaines ressources, seraient vus dans la société. Et je conclus avec l’idée que le contractarianisme, en faisant valoir que chaque membre adulte de la société doit bénéficier d’une citoyenneté égale, doit permettre à chacun de participer au choix et à la destitution des gouvernements. On peut alors penser que l’émergence d’une société d’individus constitue l’accomplissement de l’idéal démocratique. (shrink)

Purpose ‐ The purpose of this paper is to explore the "resource curse" problem as a counter-example of creative performance and innovation by examining reliance on capital and physical resources, showing the gap between expectations and ex-post actual performance that became clearer under conditions of economic turmoil. Design/methodology/approach ‐ The analysis uses logistic regressions with dichotomous response and predictor variables on structured tables of count data, representing firm performance as an outcome of capital resources, physical resources and innovation where (...) appropriate. Findings ‐ Key findings relevant to economic and business practice follow. First, a typical characteristic of successful Vietnamese firms in the transition period is their reliance on either capital resources or physical asset endowments. Second, poor performers exhibit evidence of over-reliance on both capital and physical assets. Third, firms that relied on both types of resources tended to downplay creative performance. Some evidence suggests that firms face more acute problem caused by the law of diminishing returns in troubled times. Fourth, the "innovation factor" has not been tapped as a source of economic growth. Research limitations/implications ‐ This study has some limitations. The size of the survey sample is approximately 150 firms, while the potential sample of > 300 should be possible in the future. When the size increases, the research could be expanded to include further variables that will help investigate more deeply into the related issues and business implications. With regard to the implications of the study, the absence of innovations has made the notion of "resource curse" identical to "destructive creation" implemented by ex-ante resource-rich firms, and worsened the problem of resource misallocation in transition turmoil. The Vietnamese corporate sector's addiction to resources may contribute to economic deterioration, through a downward spiral of lower efficiency leading to consumption of more resources. Practical implications ‐ Insights obtained from this study could save transition economies' resources which have almost always been considered sine qua non before any critical major policymaking, while this is not necessarily true, and in many cases, even counterproductive. Originality/value ‐ Original data set on Vietnam stock market are collected, processed, prepared and used by the authors. Original design by the authors for regression equations with dichotomous predictor variables: dependence on endowed physical assets, reliance on capital resources and significant signs of creative performance/innovations. Original idea of viewing "resource curse" as absence of innovation and due to uncreative "destructive creation" of poor-performing commercial operations by resource-rich firms is used in the paper. We have searched the literature in business research and found that the empirical results have not been previously reported. (shrink)

At lunch one day a colleague and I had a friendly argument over occupational licensing. I attacked it for being anticompetitive, arguing that licensing boards raise occupational incomes by restricting entry, advertising, and commercialization. My colleague, while acknowledging anticompetitive aspects, affirmed the need for licensing on the grounds of protecting the consumer from frauds and quacks. In many areas of infrequent and specialized dealing, consumers are not able, ex ante or even ex post, to evaluate competence. I countered by (...) suggesting voluntary means by which reputational problems might be handled and by returning to the offensive. I said that in fact the impetus for licensing usually comes from the practitioners, not their customers, and that licensing boards seldom devote their time to ferreting out incompetence but rather simply to prosecuting unlicensed practitioners. I mentioned cross-sectional findings, such as those on state licensure, prices, and occupational incomes. Overall, I characterized the professional establishment as a group of dastardly operators, who set the standards, write the codes, and enforce behavior to enhance their own material wellbeing - in brief, as venal rent-seekers. (shrink)

We thank the authors of the five commentaries for their careful and highly constructive consideration of our paper,1 which has enabled us to develop our proposal. Participation in research has traditionally been viewed as altruistic. Over time, payments for inconvenience and lost wages have been allowed, as have small incentives, usually in kind. The problem, particularly with controlled human infection model (CHIM) research or ‘challenge studies’, is that they are unpleasant and time-consuming. Researchers want to offer carrots to incentivise (...) participation (as Fernandez Lynch and Largent suggest2). We are proposing that research participation be viewed as a job with the full suite of financial entitlements of fairly remunerated work, including payment for risk and labour law protections. This would be a significant shift from current practice and standards. Ambuehl, Ockenfels and Roth have grasped this basic point and have beautifully elaborated how a fair price could be arrived at using economic theory. They build on our proposal helpfully and suggest ‘(1) salary for time involvement that is adjusted to account for the amount of discomfort experienced during participation, (2) insurance against ex post adverse outcomes and (3) ex ante compensation for risks that cannot be compensated ex post (such as death).’3 This effectively addresses Fernandez Lynch and Largent’s2 concern (echoed by Jamrozik and Selgelid4) that compensation for risk is inappropriate for harms which do not eventuate. However, because death cannot be compensated for, there must be payment for risk of death, as Ambuehl, Ockenfels and Roth convincingly argue.3 Indeed, the three-part model suggested by Ambuehl, Ockenfels and Roth makes us realise that job model would be a better title for our model than a payment for risk model. The alternative to a properly remunerated job model is the original altruistic model. However, this …. (shrink)

Is there anything special about the ethical problems of intracerebral stem-cell transplantation and other forms of cell or tissue transplantation in the brain that provides neuroethics with a distinctive normative profile, setting it apart from other branches of medical ethics? This is examined with reference to some of the ethical problems associated with interventions in the brain such as potential changes in personal identity and potential changes in personality. It is argued that these problems are not sufficiently specific to justify (...) the autonomy of neuroethics as a separate discipline and can be handled by the established principles of medical ethics. The paper concludes with a constructive proposal how to deal with interventions in the brain for which the patient is unable to give valid ex-ante consent. (shrink)

I evaluate two contractualist approaches to the ethics of risk: mutual constraint and the probabilistic, ex ante approach. After explaining how these approaches address problems in earlier interpretations of contractualism, I object that they fail to respond to diverse risk preferences in populations. Some people could reasonably reject the risk thresholds associated with these approaches. A strategy for addressing this objection is considering individual risk preferences, similar to those Buchak discusses concerning expected-utility approaches to risk. I defend the risk-preferences-adjusted (...) contractualist approach, which calculates a population’s average risk preference and permits risk thresholds below that preference, only. (shrink)

The correct solution to complex problems, such as those involved in international relations, can generally be discovered ex post but not predicted ex ante. Economics and game theory attempt to model such complexity, but have difficulty taking into account psychological subtleties, the myriad factors that each agent considers when making a decision, and cultural differences. And understanding that one is dealing with a system—that is, with interacting factors instead of with insulated monads—may not make the questions any more amenable (...) to prediction, particularly because the more unique an event, the less likely it is to be foreseen. Jervis's analysis of complex systems may therefore be more of a contribution to the historical sciences than to predictive social science. (shrink)

Ranking finite subsets of a given set X of elements is the formal object of analysis in this article. This problem has found a wide range of economic interpretations in the literature. The focus of the article is on the family of rankings that are additively representable. Existing characterizations are too complex and hard to grasp in decisional contexts. Furthermore, Fishburn (1996), Journal of Mathematical Psychology 40, 64–77 showed that the number of sufficient and necessary conditions that are needed (...) to characterize such a family has no upper bound as the cardinality of X increases. In turn, this article proposes a way to overcome these difficulties and allows for the characterization of a meaningful (sub)family of additively representable rankings of sets by means of a few simple axioms. Pattanaik and Xu’s (1990), Recherches Economiques de Louvain 56, 383–390) characterization of the cardinality-based rule will be derived from our main result, and other new rules that stem from our general proposal are discussed and characterized in even simpler terms. In particular, we analyze restricted-cardinality based rules, where the set of “focal” elements is not given ex-ante; but brought out by the axioms. (shrink)

This paper is part of an attempt to clarify the relationship between explanatory reasons and justificatory reasons for actions of various kinds. It draws on a distinction between two notions of rationalization, viz., ex ante and ex post rationalization, to recast the akratic case on the one hand and to explicate an adequate sense in which an explanatory but non-justificatory reason for an action rationalizes the latter on the other hand. The explication is helped by analysis of a hypothetical (...) example, and the name "quasi-rational" is legitimated for the type of actions this example represents. Last, but not least, the paper demonstrates that an implication of the argument is the falsity of one well-known principle in Davidson's action theory, i.e., the principle claiming that the (primary) reason for an action is also its cause. (shrink)

This chapter discusses desire theory and how the temporal gap between desires and the states of affairs that satisfy them affects this theory. Satisfaction is not that important in desire theory because even if getting what we want fails to satisfy, we are better off for having got it. The rationale for rejecting hedonistic accounts of well-being in favor of desire theories is the intuition that states of affairs that are not “like” anything for us can harm and benefit us. (...) Sumner, however, suggests that even if we grant the desire theorist’s fundamental assumption that they can make a difference to our well-being, the prospective character of desire, which opens a temporal gap between desires and the states of affairs that satisfy them, undermines the account. (shrink)

Anna Mahtani describes a puzzle meant to show that the Ex Ante Pareto Principle is incomplete as it stands and, since it cannot be completed in a satisfactory manner, decades of debate in welfare economics and ethics are undermined. In this paper, we provide a better solution to the puzzle which saves the Ex Ante Pareto Principle from this challenge. We also explain how the plausibility of our solution is reinforced by its similarity to a standard solution to (...) an analogous puzzle in quantified epistemic logic. We also show that even if the puzzle were to remain unsolved, its impact on welfare economics and ethics would be limited. (shrink)

Incomplete preferences displaying ‘mildly sweetened’ structure are common, yet theoretically problematic. This paper examines the properties of the rankings induced by the set of all coherent completions of the mildly sweetened partial preference structure. Building on these properties, I propose an ensemble-based refinement of Hare’s prospectism criterion for rational choice when preferences are incomplete. Importantly, this ensemble-based refinement is immune to Peterson’s weak money pump argument. Hence, ensemble prospectism ensures outcome rationality. Furthermore, by recognizing the structural isomorphism between mildly sweetened (...) preference structures and Cover’s splitting rule in Blackwell’s Pick the Largest Number problem, ensemble prospectism can be shown to yield better-than-even odds of selecting the ex-post higher utility option—despite the absence of all-things-considered preferences ex ante. (shrink)

There is evidence that bidders fall prey to the winner’s curse because they fail to extract information from hypothetical events—like winning an auction. This paper investigates experimentally whether bidders in a common value auction perform better when the requirements for this cognitive issue—also denoted by contingent reasoning—are relaxed, leaving all other parameters unchanged. For my underlying research question, I used a lab experiment with two stages. In stage I, the subjects participate in a non-standard common value auction, called the wallet (...) game, in which a naïve bidding strategy can lead to both winner’s curse and loser’s curse. In stage II, the subjects in the treatment group learn whether their initial bid was the winning bid or not and they get the opportunity to change this bid. In this sense, the bidders face the same decision problems as in stage I again, but the need for hypothetical thinking is reduced in stage II. The overall pattern of the data suggests that the problem of irrational over- and underbidding can be weakened by giving the subjects ex ante feedback about their bid, but unlike related studies I also find negative effects of additional information. (shrink)

This article discusses the future of quality control in an academic publication system that will be largely based on electronic publishing. Information and communication technologies both challenge traditional ways and open remedies for existent problems of present gate-keeping. New forms of ex-ante and of ex-post quality control may partly replace and partly amend peer review, citation indices and quality filters based on the reputation of the publisher. Open peer review, online commenting, rating, access counts and use tracking are evaluated (...) and put in perspective. Refuting the common argument that e-publishing leads to less quality, this paper puts forward scenarios of the future quality control system. Most likely, we shall see mixed systems, combining old and new elements, of different shapes in the different research fields. (shrink)

Many people hold the constraint against doing harm, the view that the reason against doing harm is stronger than the reason against merely allowing harm, everything else being equal. Mogensen and MacAskill (2021) have recently argued that when considering indirect long-term consequences of our everyday behavior, the constraint against doing harm faces a problem: it has the absurd implication that we should do as little as possible in our lives. In this paper, I explore the view that, for behavior (...) that does not increase anyone’s ex ante risk of suffering harm, the reason against doing harm is not stronger than the reason against merely allowing harm, everything else being equal. I argue that this view is plausible, show how it solves the paralysis problem, and defend it against objections. (shrink)

In “Accepting Moral Responsibility for the Actions of Autonomous Weapons Systems—a Moral Gambit” (2022), Mariarosaria Taddeo and Alexander Blanchard answer one of the most vexing issues in current ethics of technology: how to close the so-called “responsibility gap”? Their solution is to require that autonomous weapons systems (AWSs) may only be used if there is some human being who accepts the ex ante responsibility for those actions of the AWS that could not have been predicted or intended (in such (...) cases, the human being takes what the authors call the “moral gambit”). The authors then propose several institutional safeguards to implement in order to ensure that the moral gambit is taken in a fair and just way. This paper explores this suggestion in the context of the institutional settings within which AWSs are most likely to be deployed. It raises some concerns as to the feasibility of Taddeo and Blanchard’s proposal, in light of the recent empirical work on the incentive structures likely to exist within militaries. It then presents a potential problem that may arise in case the accountability mechanisms are successfully implemented. (shrink)

In some cases where we are faced with a decision of whether to prioritize identified lives over statistical lives, we have no basis for assigning specific probabilities to possible outcomes. Is there any reason to prioritize either statistical or identified lives in such cases? The ‘uncertainty argument’ purports to show that, provided we embrace ex ante contractualism, we should prioritize saving identified lives in such cases. The argument faces two serious problems. First, it relies on the principle of indifference, (...) and as such it leads to inconsistent assignments of epistemic probability to possible outcomes. Moreover, even if the uncertainty argument can be reformulated in order to avoid reliance on the principle of indifference, the uncertainty in such cases still undermines any judgment of which course of action – saving a statistical, or rather an identified life – involves the greater burden. The indeterminacy involved in the statistical group might be thought to undermine the argument that application of the principle of indifference leads to inconsistency in this case, but the thought that it does rests on a misunderstanding of the relationship between indeterminacy and reference. (shrink)