Archivio per 16 giugno 2012

16
Giu
12

Beyond the Precautionary Principle by Cass Sunstein

See on Scoop.itBounded Rationality and Beyond

The precautionary principle has been highly influential in legal systems all over the world. In its strongest and most distinctive forms, the principle imposes a burden of proof on those who create potential risks, and it requires regulation of activities even if it cannot be shown that those activities are likely to produce significant harms. Taken in this strong form, the precautionary principle should be rejected, not because it leads in bad directions, but because it leads in no directions at all. The principle is literally paralyzing – forbidding inaction, stringent regulation, and everything in between. The reason is that in the relevant cases, every step, including inaction, creates a risk to health, the environment, or both. This point raises a further puzzle. Why is the precautionary principle widely seen to offer real guidance? The answer lies in identifiable cognitive mechanisms emphasized by behavioral economists. In many cases, loss aversion plays a large role, accompanied by a false belief that nature is benign. Sometimes the availability heuristic is at work. Probability neglect plays a role as well. Most often, those who use the precautionary principle fall victim to what might be called “system neglect,” which involves a failure to attend to the systemic effects of regulation. Examples are given from numerous areas, involving arsenic regulation, global warming and the Kyoto Protocol, nuclear power, pharmaceutical regulation, cloning, pesticide regulation, and genetic modification of food. The salutary moral and political goals of the precautionary principle should be promoted through other, more effective methods.

 

See on papers.ssrn.com

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16
Giu
12

Beyond the Hart/Dworkin Debate: The Methodology Problem in Jurisprudence by Brian Leiter :: SSRN

See on Scoop.itBounded Rationality and Beyond

For three decades now, much of the Anglo-American legal philosophy curriculum has been organized around something called the Hart/Dworkin debate, a debate whose starting point is Ronald Dworkin’s 1967 critique of the seminal work of Anglophone jurisprudence in the twentieth-century, H.L.A. Hart’s 1961 book, The Concept of Law. This essay reviews the Hart/Dworkin debate and argues that it no longer deserves to play the same organizing role in the jurisprudential curriculum of the twenty-first century that it played at the close of the twentieth: on the particulars of the Hart/Dworkin debate, Hart has emerged the clear victor, so much so that even the heuristic value of the Dworkinian criticisms of Hart are now in doubt. (Dworkin’s quite recent polemic against legal positivism in the 2002 Harvard Law Review is also addressed briefly.) The significant philosophical challenges that face legal positivists are now different, often in kind, from the ones Dworkin made famous. These, I shall argue, fall into two broad categories: first, the correct account of the content of the rule of recognition and its relationship to the possibility of law’s authority (the Hart/Raz debate); and second, the proper methodology of jurisprudence, a debate which aligns defenders of descriptive conceptual jurisprudence (like Hart and Raz) against two sets of opponents: natural lawyers like Finnis, Perry and Stavropoulos who challenge whether jurisprudence can be descriptive; and philosophical naturalists, like the present author, who question whether conceptual analysis is a fruitful philosophical method in jurisprudence (or elsewhere).

 

See on papers.ssrn.com

16
Giu
12

A Map and Simple Heuristic to Detect Fragility, Antifragility, and Model Error by Nassim Taleb :: SSRN

See on Scoop.itBounded Rationality and Beyond

The main results are 1) definition of fragility, antifragility and model error (and biases) from missed nonlinearities and 2) detection of these using a single…

See on papers.ssrn.com

16
Giu
12

Neuroaccounting, Part II: Consilience Between Accounting Principles and the Primate Brain by John Dickhaut, Sudipta Basu, Kevin McCabe, Gregory Waymire :: SSRN

See on Scoop.itBounded Rationality and Beyond

We develop the hypothesis that culturally evolved accounting principles are ultimately explained by their consilience with how the human brain has biologically evolved to evaluate opportunities for exchange. The primary function of accounting in evaluating exchange is providing information on the net benefits of past exchanges. Accounting’s comparative advantage arises because it provides information based on reliable quantified data that is well suited to multi-period settings where reputation and trust are of first-order importance. We review evidence documented by neuroscientists that is consistent with the hypothesis that longstanding accounting principles such as Revenue Realization, Expense Matching, Objectivity, Historical Cost, Going Concern and Conservatism have distinct parallels in brain behaviors. We conclude that NeuroAccounting has important implications for how we think about accounting principles and the ultimate forces behind their emergence and persistence.

 

See on papers.ssrn.com

16
Giu
12

Networks thrive in complexity | Harold Jarche

See on Scoop.itBounded Rationality and Beyond

One the many lessons bacteria teach with their colonies of trillions is this. When it comes to groups, Nature does not favor tribes, she favors size … She favors humongous social groups that network their information so well that they form a high-powered collective intelligence, a group brain.

See on www.jarche.com

16
Giu
12

Instability and crisis in financial complex systems – di Lino Sau

See on Scoop.itBounded Rationality and Beyond
In this paper I try to contrast the Efficient Markets Hypothesis (EMH) with the Financial Instability
Hypothesis (FIH) held by Hyman Minsky taking into account the dynamic complexity of financial
markets and the role of fundamental uncertainty and organic interdependence. In my opinion this
approach may provide indeed analytical tools to explain crisis through processes endogenous to
contemporary economics. The relevance of complex dynamic has been particularly stressed recently by
Barkley Rosser (2004; 2005); this author consider indeed complex dynamic a strong foundation for
Keynesian models and results. Complex dynamics enter indeed into the analysis in at least two ways: it
provides an independent source of fundamental uncertainty and this one, as discuss by Keynes himself
(1936, 1937), can lead to speculative bubbles in assets markets and to over-reactions both in lender’s and
borrower’s attitude toward risk. These aspects can lead to financial fragility and instability and follow a
variety of complex dynamics. As I shall try to argue a financially complex system, according to the FIH,
is indeed inherently flawed: in absence of adequate economic policy, booms and busts phenomena in
financial markets fuelled by credit booms and busts, may generate endogenous instability and systemic
crisis like the one occurred for the so-called “sub-prime crisis”.
See on www.cesmep.unito.it




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