This paper investigates the link between the total bivariate risk premium and the sum of partial bivariate risk premia. Whereas in the case of small risks, the non interaction between risks is a sufficient condition to obtain the equality between the total risk premium and the sum of partial risk premia, the paper shows that this condition is not sufficient for large risks. The non interaction between risks occurs in two (...) cases: if risks are independent or if individual's marginal utility of one good is independent of the endowment in the other. Without restriction on the utility function, none of these two conditions is sufficient for large risks. If attention is restricted to preferences that exhibit constant absolute risk aversion, the non variability of the marginal utility of good one with respect to variations in endowment in the other remains a sufficient condition, while the independence between risks does not. (shrink)

This note examines the conditions under which the bivariate risk premium for one risk may be negative even if both risks are positively correlated, using a mean variance setting. The link between the bivariate risk premium and the partial bivariate risk premia is also investigated.

The research purpose is to find out if signs of a real estate bubble are shown at the austrian real estate market right now. Lending rates are composed of different factors: the base rate is the price that the customer is willing to pay. The risk premium is given to compensate the lenders risk of full or partial failure of repayment. The inflation adjustment takes into account the impairment of money over the term of a loan. (...) The liquidity premium increases with extension of the term of the loan. The European Central Bank influences the interest rate policy by varying the interest for money saved there by the banks. At the moment there are used negative interest rates, i.e. penalty interest. The methodology used was that recently the ECB lowered the interest rates which might cause real estate bubbles and, subsequently, banks and economic crises may follow, if interest rates were to be increased again sooner or later. Therefor the author studied the amount of sales and the connection to the interest rates and the interest rate policy of the banks right now. Summarizing it can be seen that in Kittsee, an Austrian area with a lot of real estate sales, as an example, 565 real estate properties were sold in the years 2005 to 2015, the median prices increased in relation to the buyers residence in Austria or non- Austrians at about 375% to 490%, this might indicate signs of change on the market. (shrink)

This study investigates the volatility risk premium on the emerging financial market. We also consider the expected return and ESG sentiment. Based on the SSE 50 ETF 5-minute high-frequency spots and daily options data from 2016 to 2021, we adopt nonparametric model-free approaches to calculate realized and implied volatilities. And the volatility risk premium is constructed by subtracting these volatility series. We examine the relations between the volatility risk premium and future excess returns as (...) well as ESG sentiment through multifactor specifications. We find that the volatility risk premium also exists in the Chinese market and is significantly negative. In addition, the statistically positive correlation between the volatility risk premium and aggregate returns is an outlier compared to the empirically negative pattern in developed markets. At last, ESG sentiment is positively associated with the volatility risk premium, especially the impact of environmental and social. This evidence supports the agency theory, which indicates that investors perceive ESG investments as waste resources in a short term and become potentially risky. (shrink)

The result of two key social developments in recent years are examined here: the partial dismantling of the welfare state and the progress of genetics. Genetic insights are increasingly valuable for risk assessment, and insurers would like to use these insights to help determine premiums. Combined with the fact that social welfare is being curtailed, this could potentially create an uninsured high-risk population. Along with considerations of autonomy and privacy, this is the basis for an ethical critique (...) of insurer's access to information. The result has often been regulation of such information; but the authors argues that due to adverse selection, regulation will not solve these problems, and this may jeopardize the survival of private personal insurance. Instead, we should look towards the resurrection of social insurance, a key component of the welfare state. This will interest academic researchers as well as professionals involved with genetics and insurance. (shrink)

Employers must determine the types of health care plans to offer and also set employee premiums for each plan provided. Depending on the structure of the employee share of premiums across different health insurance plans, the incentives to choose one plan over another are altered. If employees know premiums do not fully reflect the risk differences among workers, such pricing can give rise to a so-called “death spiral” due to adverse selection. This paper uses longitudinal information from a natural (...) experiment in the management of health benefits for a large employer to explore the impact of moving from a fixed-dollar contribution policy to a partially risk-adjusted employer contribution policy. Our results show that implementing a significant risk adjustment had no discernable effect on adverse selection against the most generous indemnity insurance policy. This stands in stark contrast to previous studies, which have tended to estimate large impacts attributed to selection when employers move to a fixed-dollar policy from one with some risk adjustment. Further analysis suggests that previous studies, which appeared to detect plans in the throes of a death spiral, may instead have been reflecting an inexorable movement away from a non-preferred product, one that would have been inefficient for nearly all workers even in the absence of adverse selection. (shrink)

In 1992, the Walloon Region modified its investment incentive legislation. The new legislation applies the notion of SME to any business employing up to 250 people and which turnover does not exceed 20 million ECU, and replaces the former interest subsidies and capital premiums by a grant calculated as a percentage of investment. According to the size of the business, the activity sector and the area, the maximum aid may vary from 13 to 21 %. The grant total percentage is (...) calculated by summing up the percentage of aid obtained for five criteria under which job creation is by far the most important. The new legislation gives a partial answer to traditional criticisms against investment incentives. First of all it aims at reducing the risk of accelerated substitution of capital for Labour. Besides, it simplifies adminsitrative procedures and reduces the "sprinkling". It should also reduce the risk of inefficient allocation of resources thatarises when grants go to loss-making entreprises. But the question of whether investment incentives actually increase the level of investment remains largely unanswered. Evidence suggests that investment incentives might have contributed to attract foreign investments hut have little impact on thelevel of domestic investment. Nevertheless, as far as SMEs are concerned, public grants might contribute to increased investment not by reducing the cost or increasing the profitability of the project but rather by increasing the means available in the business. (shrink)

We use a controlled laboratory experiment to study firm’s protection against potential technological damages. The probability of a catastrophic event is known, and the firm’s costly investment in safety reduces it. The firm can also buy an insurance with full or partial refund against the consequences of the catastrophic event, which ultimately reduces the variance of the firm’s investment-in-safety lottery. The firm makes these two choices simultaneously, after observing the insurance contract proposed by an insurer who chooses this contract (...) within a set of premium–deductible combinations. We parametrize the insurer–firm game such that a risk-neutral insurer maximizes his expected profit by offering an actuarially fair contract with full insurance; a risk-neutral firm is indifferent between investing in safety and accepting a fair insurance contract. We aim at understanding whether investment in safety and insurance are substitutes or complements in the firm’s risk management of catastrophic events. In line with our predictions, the experimental results suggest that they are substitutes rather than complements: the firm’s investment in safety measures is affected by the insurer’s proposed contract, the latter usually involving only partial insurance. (shrink)

The background of this paper is the ongoing dismantling of the social insurance systems in favour of commercialisation and privatisation of insurances needed for illness, old age and premature death. This combined with the increased possibility of using genetic testing for differentiating personal insurance premiums has the potentiality of creating a ‘genetic proletariat’ — an uninsurable high-risk population. The common way of handling this problem in Sweden, and many other developed countries around the North Atlantic, has been to regulate (...) insurance companies’ right to ask for and use genetic information in various ways. There is a distinction between partial regulation (that allows insurance companies access to genetic information from genetic tests already made, sometimes only above a specified amount, but not to demand new tests) and total regulation (that forbids insurance companies to ask for or use any genetic information). I will argue that these forms of regulation probably will have adverse consequences given the dismantling of collective social insurance systems. If this is convincing, a better way to solve the problem of an uninsurable high-risk population (and other problems) is to resurrect the collective, obligatory insurance systems in which the individual risk profile does not constitute a basis for premium determination. Both arguments cast in terms of consequences and justice render support for this conclusion. (shrink)

This paper considers the demand for insurance in a model with uncertain indemnity. Uncertain indemnity tends to increase the demand for insurance for precautionary reasons, but it also tends to decrease the demand due to the risk created by indemnity uncertainty. When the coefficient of relative prudence is not too large, uncertain indemnity reduces the demand for insurance and partial coverage is optimal even at actuarially fair premiums. In addition, insurance may be an inferior good or a normal (...) good, depending on the behavior of absolute risk aversion and the magnitude of the coefficient of relative risk aversion. (shrink)

Virtue theories can plausibly be argued to have important advantages over normative ethical theories which prescribe a strict impartialism in moral judgment, or which neglect people’s special roles and relationships. However, there are clear examples of both virtuous and vicious partiality in people’s moral judgments, and virtue theorists may struggle to adequately distinguish them, much as proponents of other normative ethical theories do. This paper first adapts the “expanding moral circle” concept and some literary examples to illustrate the difficulty of (...) adequately distinguishing virtuous from vicious partiality. Later sections aim to show how an adequate philosophical ethics will be able to both a) attribute virtue (and hence praiseworthiness) to agents whose actions may directly serve only their special interests, roles, or special relationships; and b) attribute vice (and hence censure) where an agent’s attitudes and/or actions mirror known personal biases (for instance, an egoistic attitude) or social biases (for instance, and ethnocentric attitude). This dual ability leaves space for much virtuous partiality, while also reflecting a “risk-aware” approach, recognizing the deleterious consequences of our human penchant for constructing and imbuing moral significance to oftentimes factitious us/them dichotomies. (shrink)

In reliability engineering and lifetime analysis, many units of the product fail with different causes of failure, and some tests require stress higher than normal stress. Also, we need to design the life experiments which present methodology for formulating scientific and engineering problems using statistical models. So, in this paper, we adopted a partially constant stress accelerated life test model to present times to failure in a small period of time for Gompertz life products. Also, considering that, units are failing (...) with the only two independent causes of failure and tested under type-I generalized hybrid censoring scheme the data built. Obtained data are analyzed with two methods of estimations, maximum likelihood and Bayes methods. These two methods are used to construct the point and interval estimators with the help of the MCMC method. The developed results are measured and compared under Monte Carlo studying. Also, a data set is analyzed for illustration purposes. Finally, some comments are presented to describe the numerical results. (shrink)

Insufficient attention has been paid to the ethics of distributing costs of insurance risk. Seven approaches are articulated: the egalitarian model, the needs/ability model, the loss history model, the statistical model, the causality model, the moral fault model (avoidability interpretation and worldview interpretation), and eclectic models. The ethical dimensions of each model are explored. Although some reasons are given for preferring the eclectic model, the main purpose of the paper is to provide an ethical framework for further discussion of (...) an oft-neglected issue. (shrink)

Downside risk aversion (downside RA) and decreasing absolute risk aversion (DARA) are different concepts that describe preferences for which the harm from bearing risk is lessened by an increase in wealth. This note presents some intuitive explanations of the difference between the two concepts using simple lotteries and graphical analysis. All risk-averse utility functions exhibit downside risk aversion, except those that exhibit sufficiently strong increasing absolute risk aversion. In a sense, downside RA is to (...) be expected: adding downside risk to a baseline lottery is analogous to increasing risk while adding upside risk is analogous to decreasing risk. The difference between the two concepts can be attributed to the use of different measures of the harm from risk bearing: downside RA measures harm using the utility premium and DARA measures harm using the risk premium. The two premia can change at different rates and even in different directions as wealth increases. (shrink)

Often in insurance decision making, there are risk factors on which the insurer has an informational advantage over the consumer. But when the insurer sets and posts a premium for the consumer to consider, the consumer can potentially use the premium as an informational cue for the loss probability, and thereby to reduce the insurer’s informational advantage. We study, by means of a behavioral model, how consumers would use the premium as an informational cue in such (...) contexts. The belief formation process in our model assumes that both prior knowledge and the premium might have an impact on the consumer’s estimate of the loss probability. Moreover, the premium impacts the estimate through an anchoring-and-adjustment process. The model potentially leads to violations of rational expectations, with which the consumer overestimates the loss probability beyond what could be inferred from the premium, given the premise that the insurer must seek to break even or earn an expected profit. Our model analysis moreover implies that the frequency of such violations is non-increasing as the premium increases. Last, the model implies a generally inverted-U relationship between insurance demand and the premium so that the demand is upward sloping at low premium levels and downward sloping at high premium levels. A pilot field study and a laboratory experiment provide robust evidence for our model implications and calibrations for its parameters. (shrink)

How should UNOS deal with the presence of scientific controversies on the risk factors for organ rejection when designing its allocation policies? The answer I defend in this paper is that the more undesirable the consequences of making a mistake in accepting a scientific hypothesis, the higher the degree of confirmation required for its acceptance. I argue that the application of this principle should lead to the rejection of the hypothesis that ‘less than perfect’ Human Leucocyte Antigen (HLA) matches (...) are an important determinant of kidney graft survival. The scientific community has been divided all along on the significance of partial antigen matches. Yet reliance on partial matches has emerged as one of the primary factors leading blacks to spend a much longer time than whites on the waiting list for kidneys, thereby potentially impacting the justice of the kidney allocation policy. My case study illustrates one of the legitimate roles non-epistemic values can play in science and calls into question the ideal of a value-free science. (shrink)

Limits to paternalism are, in the liberal democracies, partially defined by the concepts of decision-making capacity/incapacity (mental competence/incompetence). The paper is a response to Ian Wilkss (1997) recent attempt to defend the idea that the standards for decisional capacity ought to vary with the degree of risk incurred by certain choices. Wilkss defense is based on a direct appeal to the logical features of examples and analogies, thus attempting to by-pass earlier criticisms (e.g., Culver Gert, 1990) of risk-based (...) standards. Wilkss argument is found wanting on the grounds that he misconstrues the logic of such capacity, especially in accounting for conceptual and pragmatic ties with issues of decisional authority. A diagnosis is offered as to the source of Wilkss error (the assumption that mental competence is a species of wider genus of competence), and an alternative way of accounting for risk within the predominant contemporary legal framework is sketched. (shrink)

By means of minimal assumptions on the individual preferences, I show that the Willingness To Pay (WTP) for both a FSD and SSD reduction of risk is the sum of a mean effect, a pure risk effect and a wealth effect. As a result, the WTP of a risk-averse decision maker may be lower than the WTP of a risk-neutral one, for a large class of individual preferences’ representation and a large class of risks.

Theoretical arguments regarding the effect of corporate social responsibility (CSR) on firm liability risk are abundant; however, empirical evidence about this relationship is scarce. We investigate the relationship between CSR and the personal liability risk of a firm’s directors and officers. We argue that companies with better CSR performance represent a better underwriting risk for directors’ and officers’ (D&O) insurance providers and, therefore, have a lower cost of insurance. Our results show that firms with better CSR performance (...) are more likely to purchase D&O insurance and have a lower premium-to-coverage ratio, known as the insurance rate-on-line. We also show that this risk-reduction effect is stronger for firms that operate in a high-risk environment and have higher sales growth. These results provide evidence that CSR can be used as a risk management tool to mitigate liability risk and suggest which firms benefit most from this effect. (shrink)

Is there any number of people you should save from paralysis rather than saving one person from death? Is there any number of people you should save from a migraine rather than saving one person from death? Many people answer “yes” and “no,” respectively. The aim of partially aggregative moral views is to capture and justify combinations of intuitions like these. In this article, I develop a risk-based reductio argument that shows that there can be no adequate partially aggregative (...) view. I then argue that the only plausible response to this reductio is to accept a fully aggregative view. (shrink)

Current and past pandemics have several aspects in common. It is expected that all members of society contribute to beat it. But it is also clear that the risks associated with the pandemic are different for different groups. This makes that appeals to solidarity based on technocratic risk calculations are only partially successful. Objective ‘risks of transmission’ may, for example, be trumped by risks of letting down people in need of help or by missing out certain opportunities in life. (...) In this paper we argue that a rapprochement of the insights of standpoint epistemology with pandemic science and pandemic policy making may be an important step toward making pandemic science more accurate and pandemic calls for solidarity more effective. (shrink)

Spousal correlation in risk attitude is estimated using data from the German Socio-Economic Panel over the period 2004–2009. We apply the bivariate panel ordered probit model to the analysis of the simultaneous determination of the male’s and the female’s risk attitude, using the survey question about general willingness to take risk, provided on a 0–10 Likert-scale. The correlations between both the individual-specific effects of the two partners and the two within-individual errors are separately estimated, and found (...) to be +0.285 and +0.310, respectively. We consider the former to be a key parameter, since its positive sign may be interpreted in terms of positive assortative mating on risk attitude: individuals tend to form partnerships with others having a similar risk attitude. We also find evidence that this correlation increases with years of marriage, suggesting either a form of spousal socialization or a selection process in which marriage breakdown is more likely in poorly matched couples. (shrink)

This paper examines fraudulent financial reporting within the context of Jones' (1991) ethical decision making model. It was hypothesized that quantitative materiality would influence judgments of the ethical acceptability of fraud, and that both materiality and financial risk would affect the likelihood of committing fraud. The results, based on a study of CPAs employed as senior executives, provide partial support for the hypotheses. Contrary to expectations, quantitative materiality did not influence ethical judgments. ANCOVA results based on participants' estimates (...) of the likelihood that a "typical CPA" would manipulate reported results indicated that both materiality and risk significantly influenced the likelihood of fraud, but that the perceived morality of the action did not. In contrast, results based on participants' self-reported behavior indicated that materiality and the perceived morality of the action would influence the likelihood of fraud, but that financial risk would not. Regardless of the measure used for the likelihood of fraud, the results indicate that financial executives continue to be influenced by quantitative materiality when misstatements are clearly material on qualitative grounds. (shrink)

Background: Cone Beam Computed Tomography (CBCT), the focus of a number of radiotherapy fundraising campaigns in the mid-2000s, was introduced accompanied by a fanfare of newness and discourses of ‘hope’, ‘inspiring clinical confidence’ and ‘accuracy’. The CBCT system, used in the delivery of Radiotherapy treatment, was incorporated into strategic planning priorities across the United Kingdom based on a rationale of self-evidence. During this time, the way in which the new system was discussed with patients was variable. Research objectives: The purpose (...) of this study was to uncover how experimental practices were embedded and enacted during the use of a new technological system, specifically relating to how patients were enrolled during introductory phases of technology adoption. Research design and context: Drawing on ethnographic work and interviews with staff members in one hospital, the study examines staff discussions prior to the introduction of the Cone-Beam CT imaging system in radiotherapy. It considers how staff views were at odds with practices that occurred during the ‘experimental’ stages of use and how these were shared with patients. Ethical considerations: Approval was obtained from the Local National Health Service Research Ethics Committee and National Health Service Main Research Ethics Committee (REC 07/Q1308/16) for the interview and ethnographic stages, respectively. All names have been changed and participants signed a consent form. Findings: Staff reported a lack of evidence, absence of proof and perturbing doubts with the X-ray volumetric imaging. Both patients’ and practitioners’ partial understanding about the risks and benefits of the system created incommensurable ideas regarding its use and what the patients’ role was during these introductory stages. Conclusion: Maintaining partial truth telling renders patients’ experiences of new treatment at odds with ‘experimental’ practice. This has wide-reaching implications for practice. (shrink)

Algorithmic predictions are promising for insurance companies to develop personalized risk models for determining premiums. In this context, issues of fairness, discrimination, and social injustice might arise: Algorithms for estimating the risk based on personal data may be biased towards specific social groups, leading to systematic disadvantages for those groups. Personalized premiums may thus lead to discrimination and social injustice. It is well known from many application fields that such biases occur frequently and naturally when prediction models are (...) applied to people unless special efforts are made to avoid them. Insurance is no exception. In this paper, we provide a thorough analysis of algorithmic fairness in the case of insurance premiums. We ask what “fairness” might mean in this context and how the fairness of a premium system can be measured. For this, we apply the established fairness frameworks of the fair machine learning literature to the case of insurance premiums and show which of the existing fairness criteria can be applied to assess the fairness of insurance premiums. We argue that two of the often-discussed group fairness criteria, independence (also called statistical parity or demographic parity) and separation (also known as equalized odds), are not normatively appropriate for insurance premiums. Instead, we propose the sufficiency criterion (also known as well-calibration) as a morally defensible alternative that allows us to test for systematic biases in premiums towards certain groups based on the risk they bring to the pool. In addition, we clarify the connection between group fairness and different degrees of personalization. Our findings enable insurers to assess the fairness properties of their risk models, helping them avoid reputation damage resulting from potentially unfair and discriminatory premium systems. (shrink)

ABSTRACT Is it good to form positive beliefs about those you have faith in, such as God or a religious community? Doxastic partialists say that it is. Some hold that it is good, from the viewpoint of faith, to form positive beliefs about the object of your faith even when your evidence favours negative ones. Others try to maintain respect for evidence by appealing to a highly permissive epistemology. I argue against both forms of doxastic partiality, on the grounds that (...) they foster an epistemically problematic noetic entrenchment. I instead defend evidentialism—the view that it is good to strive for true beliefs about the object of your faith, be they positive or negative, given relatively stringent evidential norms. I address the objection that evidentialism fosters disloyalty to the other party, not least because it risks losing your faith altogether. What emerges are not just epistemic norms for beliefs about religious matters, but an evidentialist account of what makes for good faith itself. (shrink)

Rising health insurance costs and the cost of living crisis are likely leading to an increase in unpaid health insurance bills in many countries. In Switzerland, a particularly drastic measure to sanction defaulting insurance payers is employed. Since 2012, Swiss cantons – who have to cover most of the bills of defaulting payers - are allowed by federal law to blacklist them and to restrict their access to medical care to emergencies.In our paper, we briefly describe blacklisting in the context (...) of the Swiss healthcare system before we examine the ethical issues involved in light of what is known about its social and health impacts. We found no evidence that blacklisting serves as an effective way of recovering unpaid health insurance contributions or of strengthening solidarity within the health insurance system. Furthermore, the ambiguous definitions of what constitutes an emergency treatment and the incompatibility of the denial of medical care with the obligation to provide professional assistance complicate the implementation of blacklists and expose care providers to enormous pressure.Therefore, we conclude that blacklists and the (partial) denial of medical care not only pose profound ethical problems but are also unsuitable for fulfilling the purpose for which they were introduced. (shrink)

We are witnessing a certain tendency in epistemology to account for the anti-luck intuition in terms of risk. I.e., instead of the traditional anti-luck diagnosis of Gettier cases and fake barn cases, a new anti-risk diagnosis seems to be preferable by many. My goal in this paper is twofold: first, I contribute to motivate that drift; and second, I defend that we ought to partially resist it. An anti-risk diagnosis is valid and preferable for fake barn cases, (...) but we still need an anti-luck diagnosis for classic Gettier cases. The paper thus defends the Solomon-like result that we need both concepts—epistemic luck and epistemic risk—to deal with all the cases where knowledge is undermined. (shrink)

The relationship between willingness to pay to reduce the probability of an adverse event and the degree of risk aversion is ambiguous. The ambiguity arises because paying for protection worsens the outcome in the event the adverse event occurs, which influences the expected marginal utility of wealth. Using the concept of downside risk aversion or prudence, we characterize the marginal WTP to reduce the probability of the adverse event as the product of WTP in the case of (...) class='Hi'>risk neutrality and an adjustment factor. For the univariate case, the adjustment factor depends on risk aversion and prudence with respect to wealth. For the bivariate case, the adjustment factor depends on risk aversion and cross-prudence in wealth. (shrink)

This article is devoted to the study of the nature of the influence of elections on the risks of revolutionary destabilization. The authors study different approaches to estimating the probability of revolutionary events in an election year. Different types of revolutionary events are distinguished within the framework of the level of political violence. The primary reasons for the activation of the politically active part of the population, both in autocracies and in transitional political regimes, are identified, including the factionalization of (...) elites, the activation of "sleeping" institutions, the growth of political competence among individuals, the consolidation of the prodemocratic opposition and its institutionalization, electoral fraud and other manifestations of unfair political competition, greater emotional involvement of the population in political processes, and so on. The findings support the conclusion that elections promote peaceful revolutionary episodes and reduce the likelihood of armed uprisings. The novelty of the study lies in the fact that the influence of elections on the risks of revolutionary destabilization is considered in the regime context. The authors explore how elections affect violent or non-violent revolutionary actions in certain political regimes, according to Jack A. Goldstone's typology (full autocracies, partial autocracies, factional democracies, partial democracies and full democracies). The authors conclude that holding elections reduces the risks of armed revolutionary destabilization in all types of regimes, except for factional democracies. On the other hand, unarmed revolutionary action is more likely in an election year - in all regime types except full democracies. At the same time, holding elections primarily increases the risks of unarmed revolutionary uprisings in intermediate regimes / anocracies. However, even among anocracies, factional democracies stand out, where in the election year the risks of unarmed (as well as armed) revolutionary episodes increase significantly more than in partial autocracies and in partial non-factional democracies. At the same time, for consolidated democracies, holding elections is a factor that inhibits rather than provokes revolutionary destabilization. In full autocracies, the risk of unarmed revolutionary action increases in an election year, but not as much as in intermediate regimes. (shrink)

This paper reflects on the notion of partial ambiguity. Using a framework decomposing ambiguity into distinct layers of analysis, among which are risk and model uncertainty, and allowing for different attitudes toward these layers, I show that partial ambiguity may prove less desirable than full ambiguity, even under ambiguity aversion. This observation poses difficulties for interpreting the notion of partial ambiguity in relation to the partial information available to determine the potential compositions of an ambiguous (...) urn. Two Ellsberg-style thought experiments are described to challenge the meaning of partial ambiguity further, and an alternative interpretation, based on a more ambiguous relation, is discussed. (shrink)

The use of lateralised cues by predators and fellows may not strongly affect lateralisation. Conservatism of development is a possible source of consistency across vertebrates. Individuals with partial reversal, affecting only one ability, or with varying degree of control of response by one hemisphere do exist. Their incidence may depend on varying selection of behavioural phenotypes such as risk taking.

This paper shows that temperance is the highest order risk preference condition for which spreading N independent and unfair risks provides the highest level of welfare than any other possible allocations of risks. These results are also interpreted through the concept of N-superadditivity of the utility premium. This paper provides a novel application of temperance, not in terms of two risks as it is common, but in terms of N risks.

Reputation is a commercially valuable asset. This book focuses upon how enhanced reputation can contribute to commercial asset management through increased share price premium and competitive performance, while reputation loss can significantly erode the ability of the business to successfully retain market share, maximize shareholder value, raise finance, manage debt, and remain independent. It provides practical models and checklists designed to plan reputation management and risk communication strategies.

This paper examines the ethical implications of "poison put" provisions included in bond offerings. A number of firms are using event-risk protections in bond offerings in an effort to attract investors back into the bond market. One of the most common event-risk protections is a "poison put" provision, which allows the bondholder to "put" the bond back to the firm at par or at a premium under certain specified conditions, such as a takeover effort or a downgrading (...) of the bond by rating agencies. While such a provision is obviously of value to the bondholders, there is a secondary effect that is not as obvious. Using such a provision helps to insure that boards of directors must put the interests of all of the stakeholders ahead of any personal interests of the board members, thus protecting the stakeholders. The use of event-risk protections helps to deter takeovers, induce bidders to negotiate with management in any takeover efforts, and avoid two-tier takeover offers. As a result, the "poison put" provisions have a positive impact on share values while simultaneously protecting the investments of bondholders. Such an impact makes the use of "poison put" provisions in bonds an ethical use of management power. (shrink)

My goal in this dissertation is to start a conversation about the role of risk in the decision-theoretic assessment of partial beliefs or credences in formal epistemology. I propose a general theory of epistemic risk in terms of relative sensitivity to different types of graded error. The approach I develop is broadly inspired by the pragmatism of the American philosopher Charles Sanders Peirce and his notion of the ``economy of research.'' I express this framework in information-theoretic terms (...) and show that epistemic risk, so understood, is dual to information entropy. As a result, every unit increase in risk comes with a corresponding unit decrease in information entropy and epistemic risk may be expressed in terms of entropic change. I explain the significance of this for the selection of priors and the Laplacian principle of indifference. I also extend this notion of epistemic risk to the assessment of updating rules, where a similar duality between risk and information holds. In the dynamic context, epistemic risk is given by cross-entropic change. Here I explore the relationship between risk, the Value of Knowledge Theorem, dynamic coherence, and the role of expected accuracy in the selection of update rules. Finally, I apply these considerations to a social institution where attitudes to error are especially salient -- namely, legal decision-making -- and argue that considerations regarding the relative severity of different types of error are central to understanding evidentiary burdens of proof and the probative value of statistical evidence. (shrink)

Beginning with an analysis of the "reluctant gambler problem"—in which the notion of guiding one's life by probability seems to conflict with the preferences of rational people—we draw a distinction between rule and act probabilism. Arguing that humans are rule probabilists by default, we show that reluctant gamblers can be viewed as rule probabilists. If so viewed, their reluctance to gamble is consistent with their rational use of probability judgments to guide their lives.The distinction between rule and act probabilism suggests (...) a way to analyze the risks stemming from the September 11 terrorist attacks. Assessing the risks posed by the new reality of terrorism in the U.S. in light of the rule versus act probabilist distinction shows the risks Americans face from a terrorist attack are essentially the same as they were before September 11, 2002. Yet empirical investigation indicates Americans exaggerate their personal risks from terrorism.The perception that the risks of terrorism mushroomed on September 11 is partially explained by the 24-hour news stations' TV coverage and the current administration's "interest" in diverting attention from their own questionable practices. While the risks of terrorism are not appreciably higher than they were prior to September 11, they might be further reduced. Unfortunately, our government's strategy to reduce the risks of terrorist strikes involves weakening the Constitution. Americans face the question how much it is appropriate to pay—in diminished rights and liberties—to reduce a risk that is essentially the same as it was prior to the attacks. (shrink)

It is widely recognized that endocrine disrupting compounds, such as Bisphenol A, pose challenges for traditional paradigms in toxicology, insofar as these substances appear to have a wider range of low-dose effects than previously recognized. These compounds also pose challenges for ethics and policymaking. When a chemical does not have significant low-dose effects, regulators can allow it to be introduced into commerce or the environment, provided that procedures and rules are in place to keep exposures below an acceptable level. This (...) option allows society to maximize the benefits from the use of the chemical while minimizing risks to human health or the environment, and it represents a compromise between competing values. When it is not possible to establish acceptable exposure levels for chemicals that pose significant health or environmental risks, the most reasonable options for risk management may be to enact either partial or complete bans on their use. These options create greater moral conflict than other risk management strategies, leaving policymakers difficult choices between competing values. (shrink)

This paper presents a new decision theory for modelling choice under risk. The new theory is a two-parameter generalization of expected utility theory. The proposed theory assumes that a decision maker: behaves as if maximizing expected utility; but may experience disappointment when the utility of a lottery’s outcome falls short of the expected utility of the lottery; and may have a preference for gambling. The proposed theory can rationalize the fourfold pattern of risk attitudes; the common ratio effect (...) and the reverse thereof ; the Allais paradox in classical common consequence problems and the reverse Allais paradox—in common consequence problems with an even split of a probability mass; violations of the betweenness axiom; switching behavior in the Samuelson’s example; violations of ordinal, upper and lower cumulative independence ; and preference reversals between valuations and choice. In application to insurance, the theory can rationalize full insurance with an actuarially unfair premium and aversion to probabilistic insurance. In application to optimal portfolio investment, the theory can rationalize the equity premium puzzle. (shrink)

An anthropogenic global catastrophic risk is a human-induced risk that threatens sustained and wide-scale loss of life and damage to civilisation across the globe. In order to understand how new research on governance mechanisms for emerging technologies might assuage such risks, it is important to ask how perceptions, beliefs, and attitudes towards the governance of global catastrophic risk within the research community shape the conduct of potentially risky research. The aim of this study is to deepen our (...) understanding of emerging technology research culture as it relates to global catastrophic risks, and to shed new light on how new research governance mechanisms might be developed. We analyse in-depth interviews with leading AI and biotech researchers both from universities and the private sector. We develop new insights in terms of four salient themes. First, ‘engineering mindset’, which highlights the premium placed by many interviewees on pursuing interesting research about the physical world for its own sake. Second, ‘self-government’, which looks at how self-regulation of technological development currently occurs. Third, ‘pure incentives’, focussing on how career and other incentives shapes research. Fourth, ‘norms and persuasion’, which examines the role of moral considerations in guiding the research choices of scientists. We end by considering the implications of these findings for future research on governance of anthropogenic global catastrophic risk. (shrink)

ABSTRACTGenetic testing results and research findings raise concerns about access to genetic information by insurers. Recently, the Canadian Life and Health Insurance Association reaffirmed its prerogative to request, for underwriting purposes, the disclosure of clinical and research genetic test results if the participant/patient or his physician has knowledge of the results. Studies have shown that access to genetic information to determine insurability can, in limited instances, lead to actual, or fear of, genetic discrimination, result in individuals refusing to undergo testing (...) or declining participation in genomic research, and being asked to pay higher premiums or denied access to certain types of insurance. Obtaining informed consent for genetic testing and genomic research is crucial and should take into account the potential need to disclose possible insurability risks to patients and participants. Our study analyzed clinical and research consent forms, templates and guidelines from Quebec to investigate two questions: whether consent forms include clauses providing information on potential insurability risks and when such potential risks are included, what information is provided and how it is formulated. Our findings show that current information on insurability risks in Quebec’s forms/guidelines lack coherence, potentially resulting in patients/participants receiving inconsistent information. (shrink)

The present study examined effects of sociodemographic, risk, and resilience factors on marital, parental, and financial stress early in the COVID-19 pandemic. A cross-sectional online survey was conducted among 480 married Palestinians living in Israel, using self-report questionnaires. Descriptive statistics and bivariate correlations were computed. Then, hierarchical multiple regression analyses were conducted to predict each of the three stress measures. Finally, dominance analyses were conducted to compare the contributions of sociodemographic, risk, and resilience factors. The results showed (...) considerable differences between predictors of marital and parental stress and predictors of financial stress. For marital and parental stress, resilience factors mainly family resilience were the strongest predictors, followed by risk factors and then sociodemographic characteristics. For financial stress, risk factors were the strongest predictors, followed by sociodemographic characteristics and resilience factors. These results suggest that family and individual resilience reduce marital and parental stress under difficult conditions, including the COVID-19 pandemic. Though resilience has been found to ameliorate financial stress to some extent, it appears that other measures are required to manage stress related to financial difficulties. (shrink)