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Cost-Benefit Analysis | Economic Theories | Parisi I 359 Cost-benefit analysis/benefi-cost analysis/BCA/Economc theories: BCA evaluates policies that have benefits and costs that will normally occur both at project outset and in the future, that is, over time. Because benefits and costs are cash flows that occur over time, the analyst must take the “time value of money” into account (i.e. the idea that $100 today is not worth the same as $100 a year from now because investing the $100 earned today would yield more a year from now). To make the money value of costs and benefits commensurate over time, cash flows in each year must be discounted to their “present value.” Parisi I 360 When conducting a BCA, all monetary amounts must be in comparable units—either all in “constant dollars” or all in “nominal dollars.” Constant dollars (also called “real dollars”) take inflation into account, adjusting the value of future benefits and costs to reflect expected inflation. If constant dollars are chosen, then the inflation component must be subtracted to the discount rate. Thus, if the market interest rate is 8% and expected inflation is 5%, the real interest rate (by which future benefits and costs are discounted) would be about 8% -5%, or 3%. These considerations and others are frequently capsulated in steps for a BCA. >Kaldor-Hicks criterion/Zerbe, >Efficiency/Hicks, >Efficiency/Kaldor. Parisi I 363 Originally BCA was conceived as simply a measure to determine whether a water project, typically a dam, should be built. The Army Corps of Engineers introduced benefit–cost methods into the United States (borrowing from the French) at least as early as the Rivers and Harbor Act of 1902, and its use was explicitly mandated in the 1920 amendment to the Act (Porter, 1995(1), p. 150; Hammond, 1966(2), p. 195; Holmes, 1972(3)).Before the creation of the Corps, evaluations of public investments were almost completely ad hoc (Porter, 1995(1), p. 150). By the 1920s, the Corps required that its recommended projects have expected benefits in excess of costs. Throughout the 1930s, the numbers put forward by the Corps were generally accepted without question (Porter, 1995(1), p. 150). Congress recognized the Corps as a relatively neutral and respected arbiter in congressional fights over water projects (Porter, 1995(1), p. 153). The creation of the Corps, then, represented not only the creation of an agency to build projects, but an agency to increase congressional and public efficiency. After 1940 Corps decisions became the subject of rather bitter controversy as the Corps was challenged first by powerful electric and railroad utilities, by shipping interests, and then by rival federal agencies, especially the Bureau of Reclamation and the Department of Agriculture (Porter, 1995(1), pp. 161–175). The further development of BCA and its increasing quantification was not the product of technical elites but of disagreement, suspicion, and conflict, particularly bureaucratic conflict (Porter, 1995(1)). Rival techniques or standards for BCA became the norm, although an attempt was made to resolve differences by relying on first principles of economics. The attempt closest to reaching agreement was the “Green Book.”16 Although agreement was significantly incomplete, the grounds for decision-making were reasonably well established as rooted in economic theory. BCA was thereby transformed by conflict into a set of rationalized economic principles building on work by British economists in the late 1930s. The incorporation of economic principles into BCA “began in earnest in the mid-1950’s” (Porter, 1995(1), p. 188). Parisi I 365 VsBenefit-Costs analysis/VsBCA: There are three issues concerning the use of BCA that have been especially controversial. These are 1) what the discount rate should be, 2) the possibility of Scitovsky reversals, and 3) the role of moral sentiments in BCA. See (Polinsky, 1989)(4), Shavell (1981)(5), Kaplow and Shavell (1994)(6). >Scitovsky Paradox. 1. Porter, Theodore M. (1995). Trust In Numbers: The Pursuit Of Objectivity In Science and Public Life 187. Princeton University Press. 2. Hammond, Richard J. (1966). “Convention and Limitation in Benefit–Cost Analysis.” Natural Resources Journal 6: 195–222. 3. Holmes, B. H. (1972). A History of Federal Water Resources Programs, 1800–1960. U.S. Dept. of Agriculture, Economic Research Service. 4. Polinsky, Mitchell A. (1989). An Introduction to Law and Economics. 2nd edition. Wolters Kluwer. 5. Shavell, Steve (1981). “A Note on Efficiency vs. Distributional Equity in Legal Rulemaking: Should Distributional Equity Matter Given Optimal Income Taxation.” American Economic Review 71: 414. 6. Kaplow, Louis and Steven Shavell (1994). “Why the Legal System is Less Efficient than the Income Tax in Redistributing Income.” Journal of Legal Studies 23: 667–681. Richard O. Zerbe. “Cost-Benefit Analysis in Legal Decision-making.” In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University. |
Parisi I Francesco Parisi (Ed) The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017 |
Decision Theory | Lewis | V 307f Decision Theory/DT/Lewis: partition/division)/Lewis: is a set of propositions, of which exactly one applies in each world (or each X-world) - provide the most detailed specification of the present actions (options) of the actor. Decision theory: says which options are rational. >Proposition/Lewis. Rational choice: delivers the greatest benefit expected. Maximum benefit: if V(A) is not surpassed by any V(A™). Problem: how do you find out that A applies. That one is living in the world A (= Proposition)?. Important argument: it is in your power, to make the news yourself. That is, you find out what they like best by producing it. V 309f Non-Causal Decision Theory/Newcomb’s Paradox/NP/LewisVs: favors the rejection of small goods as rational - although this later choice does nothing to change the previous state, which favors the evil. Newcomb's Paradox: requires a causal decision theory. >Newcomb's paradox. V 315 Non-causal decision theory: only works, because the beliefs of the actor allow it to function - ... + ... Partition of propositions (sets of possible worlds), expected benefits. >Propositional Attitudes. --- Schwarz I 66 Decision-making procedure/Lewis: the >modal realism ((s) maintaining the existence of possible worlds) is not a decision-making procedure to answer questions about possible worlds. Decision-making procedure/Schwarz: E.g. is not used by behaviorists either: he simply says that statements about mental properties are reducible to statements about dispositions. >Behaviorism, >Disposition. E.g. mathematical Platonism: does not need decision-making procedure for arithmetics. >Platonism. |
Lewis I David K. Lewis Die Identität von Körper und Geist Frankfurt 1989 Lewis I (a) David K. Lewis An Argument for the Identity Theory, in: Journal of Philosophy 63 (1966) In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis I (b) David K. Lewis Psychophysical and Theoretical Identifications, in: Australasian Journal of Philosophy 50 (1972) In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis I (c) David K. Lewis Mad Pain and Martian Pain, Readings in Philosophy of Psychology, Vol. 1, Ned Block (ed.) Harvard University Press, 1980 In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis II David K. Lewis "Languages and Language", in: K. Gunderson (Ed.), Minnesota Studies in the Philosophy of Science, Vol. VII, Language, Mind, and Knowledge, Minneapolis 1975, pp. 3-35 In Handlung, Kommunikation, Bedeutung, Georg Meggle Frankfurt/M. 1979 Lewis IV David K. Lewis Philosophical Papers Bd I New York Oxford 1983 Lewis V David K. Lewis Philosophical Papers Bd II New York Oxford 1986 Lewis VI David K. Lewis Convention. A Philosophical Study, Cambridge/MA 1969 German Edition: Konventionen Berlin 1975 LewisCl Clarence Irving Lewis Collected Papers of Clarence Irving Lewis Stanford 1970 LewisCl I Clarence Irving Lewis Mind and the World Order: Outline of a Theory of Knowledge (Dover Books on Western Philosophy) 1991 Schw I W. Schwarz David Lewis Bielefeld 2005 |
Dependence | Lewis | V 166 Nomic dependence/Lewis: two families of law propositions or individual fact p imply together all material conditionals between the two families. >Conditionals. Then the material conditionals are implied by the counterfactual conditionals which include the counterfactual dependence (conD). >Counterfactual dependence. The nomic dependence explains the counterfactual dependence. Important argument: the law propositions and the fact propositions must be counterfactually independent. Nomic dependence: is reversible. Counterfactual dependence is irreversible - E.g. Barometer/pressure. V 312f Dependence hypothesis/Lewis: here: set of propositions (sets of possible worlds) which specify everything the (omniscient) actor knows about causal dependence and independence of his actions - they form a partition. - I.e. they do not overlap. Expected benefits: Do not refer to individual dependency hypotheses. - ((s) i.e. it must not be assumed to be without alternative.) - You have to spread your beliefs on several dependencies.) Benefit: to be understood as a non-conditional belief of a variation K of an alternative dependence hypothesis. When options and dependency hypotheses differ, the difference shows the aspect which brings the novelty. >Benefit. Wrong: wanting to maximize the expected benefits to any partition - This would lead to different answers for different partitions - the partition for propositions of the value level would tell us fatalistically that all options are equally good. >Proposition. V 320 Dependence hypothesis/illustration/probability distribution/Lewis: If the same dependence applies in several worlds, the images represent the worlds in the same way. - If the images are the same, we have equivalence classes. - Then we have the partition of these equivalence classes. >Possible world/Lewis, >Equivalence class. |
Lewis I David K. Lewis Die Identität von Körper und Geist Frankfurt 1989 Lewis I (a) David K. Lewis An Argument for the Identity Theory, in: Journal of Philosophy 63 (1966) In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis I (b) David K. Lewis Psychophysical and Theoretical Identifications, in: Australasian Journal of Philosophy 50 (1972) In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis I (c) David K. Lewis Mad Pain and Martian Pain, Readings in Philosophy of Psychology, Vol. 1, Ned Block (ed.) Harvard University Press, 1980 In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis II David K. Lewis "Languages and Language", in: K. Gunderson (Ed.), Minnesota Studies in the Philosophy of Science, Vol. VII, Language, Mind, and Knowledge, Minneapolis 1975, pp. 3-35 In Handlung, Kommunikation, Bedeutung, Georg Meggle Frankfurt/M. 1979 Lewis IV David K. Lewis Philosophical Papers Bd I New York Oxford 1983 Lewis V David K. Lewis Philosophical Papers Bd II New York Oxford 1986 Lewis VI David K. Lewis Convention. A Philosophical Study, Cambridge/MA 1969 German Edition: Konventionen Berlin 1975 LewisCl Clarence Irving Lewis Collected Papers of Clarence Irving Lewis Stanford 1970 LewisCl I Clarence Irving Lewis Mind and the World Order: Outline of a Theory of Knowledge (Dover Books on Western Philosophy) 1991 |
Newcomb’s Paradox | Lewis | V 300 Newcomb’s Paradox/NP/Prisoner dilemma/PD/Lewis: thesis: the two are identical - it’s not about a prediction. - New theories are successful if they predict (=explain) already observed phenomena - whether they get the bigger profit is causally independent of what I’m doing now - therefore, my prediction should be causally independent of my decision. - Solution: move the prediction into the past - it is only important whether a prediction could have been made - and that it is conditional on whether I get the million. - Important argument: no one needs to develop a theory about my beliefs - whether someone puts a million into the box depends on a process which is not regarded to be a prediction of my choice. Cf. >prisoner's dilemma. V 301 Newcomb’s Paradox/Prisoner dilemma/Lewis: Million only if a certain prediction process (before, during or after) of the choice justifies the prediction that I will not take the thousand - e.g. a copy (replica) of me. - Important argument: regardless if someone else makes a prediction about how I watch my replica (react to it?), the decision of my replica is still a prediction process regarding my prediction process. V 303 Even if coincidence prevails, it is rational to cooperate. V 303f Newcomb’s Paradox/Prisoner dilemma/PD/Lewis: some: it is rational not to cooperate if the partners are just similar enough. - LewisVs: You should take the thousand - because whether you get the million it regardless of what you do. - PD/Lewis: it is rational to cooperate, because you would be ratted by others, no matter what you do yourself - (not causal). V 309 Newcomb’s Paradox/Lewis: Variant: E.g. Take the thousand and trade them for the possibility of a disease (not causal) - and you’re convinced that the latter is out of your control - then there is no reason not to take the thousand - even though your choice is proof of a possible disease - it is proof that there was a former state which was both favourable for the thousand and the disease. - Important argument: if the former condition exists, there is nothing you can do about it now. V 312 Newcomb’s Paradox/Lewis: It cannot exist for someone who knows everything about how things depend causally from him. V 309f Non-causal decision theory/DT/Newcomb’s Paradox/LewisVs: favors the decline of the small benefit as rational - although this later choice does nothing to change the previous state, which favors the evil. - NP: requires a causal decision theory. V 315 Non-causal decision theory: only works because the beliefs of the actor allow it to function - ...+... Partition of propositions (sets of possible worlds), expected benefits. Cf. >predictions, >decision theory. |
Lewis I David K. Lewis Die Identität von Körper und Geist Frankfurt 1989 Lewis I (a) David K. Lewis An Argument for the Identity Theory, in: Journal of Philosophy 63 (1966) In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis I (b) David K. Lewis Psychophysical and Theoretical Identifications, in: Australasian Journal of Philosophy 50 (1972) In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis I (c) David K. Lewis Mad Pain and Martian Pain, Readings in Philosophy of Psychology, Vol. 1, Ned Block (ed.) Harvard University Press, 1980 In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis II David K. Lewis "Languages and Language", in: K. Gunderson (Ed.), Minnesota Studies in the Philosophy of Science, Vol. VII, Language, Mind, and Knowledge, Minneapolis 1975, pp. 3-35 In Handlung, Kommunikation, Bedeutung, Georg Meggle Frankfurt/M. 1979 Lewis IV David K. Lewis Philosophical Papers Bd I New York Oxford 1983 Lewis V David K. Lewis Philosophical Papers Bd II New York Oxford 1986 Lewis VI David K. Lewis Convention. A Philosophical Study, Cambridge/MA 1969 German Edition: Konventionen Berlin 1975 LewisCl Clarence Irving Lewis Collected Papers of Clarence Irving Lewis Stanford 1970 LewisCl I Clarence Irving Lewis Mind and the World Order: Outline of a Theory of Knowledge (Dover Books on Western Philosophy) 1991 |
Newcomb’s Paradox | Poundstone | I 373 Newcomb's Paradox/Poundstone: clairvoyant claiming to predict your actions to 90% - Box A: definitely a thousand mark note B: 1 million or nothing. The clairvoyant has predicted what you will do 24 h before. - He will leave the box empty when he foresaw that you take both. I 375 There are good reasons to take only box B. - When he is right in 90%, you get nothing but a gullible idiot gets 1 million. Probability calculation: game-value: 10% of 1 million (that the clairvoyant is wrong). - If he is 99% right, higher reward: 990,000. I 376 Rule: like prisoner's dilemma: one should never be the first to be disloyal. >Prisoner's dilemma. I 377 Variant: with glass boxes ... I 380 The one who takes both boxes, thinks he is smarter than the rules allow. Newcombe/Poundstone: both pro "Just B" I 381 Newcomb's Paradox/Nozick: here two strategies are pitted against each other: 1. Principle of dominance: what is better in all circumstances, dominates 2. Principle of the expected benefits: what promises higher benefits? I 382 Dominance varies depending on whether one takes the horse or the player into account at a horse bet - in the world, nothing changes. Solution: in this the variant, the situation is not dependent on the decision- Principle of the dominance is only applicable if the decision is not affected by the result. I 383 Influence of Newcomb's Paradox would only be possible with retroactive causality. >Causality, >Time reversal, >Backward causality. NozickVsNewcombe: take both boxes - under any conditions always the dominant strategy. >R. Nozick. I 386 Newcomb's Paradox/Martin Gardner: the prediction must be a fraud; as I cannot believe that 91 (13x7) is a prime number. - I would just take the offered 10 cents for the correct answer. |
Poundstone I William Poundstone Labyrinths of Reason, NY, 1988 German Edition: Im Labyrinth des Denkens Hamburg 1995 |
Values | Nozick | II 311 Values/Nozick: four types: 1. Intrinsic value 2. Instrumental value: is a function or a measure of the intrinsic value and leads to it. >Expected benefit. Something of instrumental value must not be intrinsically valuable itself. >Benefit, >Intrinsic, >Extrinsic. 3. creative value: is a function of the value for something new that is introduced into the world - determinism denies creative values. >Creativity Free will: we understand it as it leads to significant differences in value. - Instrumental action: makes a difference, if it would stop, later intrinsic values would not occur. - E.g. a brush stroke - The brush stroke itself is not creative. 4. Contributors value: what causes the difference. - They are also allowed by determinism. Determinism does not allow creative values. - Soft determinism: contributing value is sufficient. Fatalism: Allows no contributing values. >Fatalism. Contributing value is sufficient. II 399 Moral pull/ethics/value/Nozick: my value fixes, what should come from you - Moral Push: Your value fixes, what I should meet with you. II 453 Moral/Nozick: the moral basis is shared by all. So it seems to have nothing interesting to do with you. - It seems to be that we are searching for all values. - Then variant of the categorical imperative: "Do not kill values-seeking egos". >Categorical Imperative. II 415 Intrinsic values/ethics/Nozick: intrinsic values occur best with organic unit. - New values occur only in whole, in totalities. II 562 f. Values/ethics/Nozick: E.g. assuming there is a possible world without values, but with an organic unity (which is just as good). >Possible worlds. Then you could live as if there were values. - This suggests that the existence of values lies in their possibility. - We know what values would be, we just have to bring them to life. - That is not made valuable by something previous - (no circle). - Afterwards the choice is good - then values are not external. II 565 External is: That we gain something through it - internal: connection to our motives. >Motives, >Motivation, >Actions. II 566 Then there are also different values: E.g. Nietzsche: revaluation. >Values/Nietzsche, >Revaluation. II 567 Values/facts/connections/Nozick: facts do not contain values - (otherwise naturalistic fallacy). Connection: some facts (of organic unity) are identical with values. Explanation: the relation is the organic unity. - Values are organically based on own facts. >Facts. |
No I R. Nozick Philosophical Explanations Oxford 1981 No II R., Nozick The Nature of Rationality 1994 |
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Bayesianism | Lewis Vs Bayesianism | Schwarz I 164 Decision Theory/Causality/LewisVsBayes: Bayes' Theorem does not consider causality or rather does not differentiate between symptom and cause: e.g. suppose that wanting to eat a mushroom soup is a symptom of a beginning mental illness. The probability of me being ill is higher if I eat the soup than if I were not eating it: 0,01 instead of 0,0001. If the desirability of mushroom soup is 10, that of tomato soup 5 and that of disease minus 1000, then according to Bayes' decision theory I should take tomato soup: its expected benefit is higher with 10 + 0.0001 times -1000 = 4.9999 than the mushroom soup benefit with 10 + 0,.1 times -1000 = 0. Lewis: This is ridiculous. I would have a reason to not eat the mushroom soup only if it were the cause. Modification: Variation of Bayes' Decision Theory: Causal Decision Theory, classical form: (Lewis 1981b). >Bayesianism. |
Lewis I David K. Lewis Die Identität von Körper und Geist Frankfurt 1989 Lewis I (a) David K. Lewis An Argument for the Identity Theory, in: Journal of Philosophy 63 (1966) In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis I (b) David K. Lewis Psychophysical and Theoretical Identifications, in: Australasian Journal of Philosophy 50 (1972) In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis I (c) David K. Lewis Mad Pain and Martian Pain, Readings in Philosophy of Psychology, Vol. 1, Ned Block (ed.) Harvard University Press, 1980 In Die Identität von Körper und Geist, Frankfurt/M. 1989 Lewis II David K. Lewis "Languages and Language", in: K. Gunderson (Ed.), Minnesota Studies in the Philosophy of Science, Vol. VII, Language, Mind, and Knowledge, Minneapolis 1975, pp. 3-35 In Handlung, Kommunikation, Bedeutung, Georg Meggle Frankfurt/M. 1979 Lewis IV David K. Lewis Philosophical Papers Bd I New York Oxford 1983 Lewis V David K. Lewis Philosophical Papers Bd II New York Oxford 1986 Lewis VI David K. Lewis Convention. A Philosophical Study, Cambridge/MA 1969 German Edition: Konventionen Berlin 1975 LewisCl Clarence Irving Lewis Collected Papers of Clarence Irving Lewis Stanford 1970 LewisCl I Clarence Irving Lewis Mind and the World Order: Outline of a Theory of Knowledge (Dover Books on Western Philosophy) 1991 Schw I W. Schwarz David Lewis Bielefeld 2005 |
Behaviorism | Parsons, Ta. Vs Behaviorism | AU Kass 11 Action/Luhmann: what is actually not meant by this? How do I distinguish them? Action theory: causes difficulties: in the literature there are various exclusion experiments. E.g. Behavior is something that even animals can do, perhaps a little more sophisticated in humans. Excludes the subject to a certain extent. Talcott ParsonsVsBehaviorism: has always seen himself as the leader of an uprising against behaviorism. VsComparison of students and guinea pigs. Thus Parsons was considered as almost European or philosophical by the Americans. Action Theory/New: insistence on rationality (comes from Max Weber). Action/Weber: first, means and ends must be distinguished. LuhmannVsWeber: this brings the problem of what is to be excluded. Is a certain action then no action anymore, but rather behavior? Today: rational choice theory: no longer a problem: it is believed that if someone opts prospects at expected benefit, it is rational action which is amenable to theoretical treatment. Weber: relies more on ideal types than on a concrete description of reality. Action/Luhmann: two other problems: external and internal demarcation of action. External demarcation: unclear which consequences belong to action and which do not. E.g. does my talking take place in their minds, how far does it go? When you start with that, you tend to include more and more. Internal demarcation: question of motivation. Usually you want to fix the intention to speak of an action. That's why there is a tendency to conceive action attribution-theoretically: action must be attributed by the actor to himself. Problem: what are the motives then, are they real? One can cite anything that is obvious to oneself. One is prepared. Question: did the Neanderthals have motives already? Action Theory/Luhmann: could be regarded as a kind of glue between individual and society, action is something that cannot be cut into an individual part and a social part. |
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