In contrast to the assumptions of standard economic theory, recent experimental evidence shows that the income of peers has a systematic impact on observed degrees of risk aversion. This paper reports the findings of two experiments examining the impact of income inequality on risk preferences and whether the knowledge of inequality mediates the decisions. In Experiment 1, participants who were recruited for a real-effort task were paid either a low wage or a high wage. Half of the participants were aware (...) of the income inequality, while the other half were not. After completing their task, they were invited to invest a part of their salary in a risky asset. In Experiment 2, we replicated the same experiment in the laboratory with windfall endowments to test the consistency of results in the laboratory settings. The results of the first experiment show that high-wage subjects take higher risks than low-wage participants do if they are aware of the inequality in wages. This finding supports the idea that income comparisons shape risky decisions. In Experiment 2, on the other hand, we did not observe any significant differences in decisions. This may suggest that the income comparison is sensitive to house-money effect. (shrink)

Recently proposed models of risky choice imply systematic violations of transitivity of preference. This study explored whether people show the predicted intransitivity of the two models proposed to account for the certainty effect in Allais paradoxes. In order to distinguish “true” violations from those produced by “error,” a model was fit in which each choice can have a different error rate and each person can have a different pattern of preferences that need not be transitive. Error rate for a choice (...) is estimated from preference reversals between repeated presentations of the same choice. Results showed that few people repeated intransitive patterns. We can retain the hypothesis that all participants were transitive. (shrink)

In order to accommodate empirically observed violations of the independence axiom of expected utility theory Becker and Sarin (1987) proposed their model of lottery dependent utility in which the utility of an outcome may depend on the lottery being evaluated. Although this dependence is intuitively very appealing and provides a simple functional form of the resulting decision criterion, lottery dependent utility has been nearly completely neglected in the recent literature on decision making under risk. The goal of this paper is (...) to revive the lottery dependent utility model. Therefore, we derive first a sound axiomatic foundation of lottery dependent utility. Secondly, we develop a discontinuous variant of the model which can accommodate boundary effects and may lead to a lexicographic non-expected utility model. Both analyses are accompanied by considering some functional specifications which are in accordance with recent experimental results and may have significant applications in business and management science. (shrink)

In this paper we experimentally investigate the disparity between willingness-to-accept (WTA) and willingness-to-pay (WTP) for risky lotteries. The direction of the income effect is reversed by endowing subjects with the highest price of a lottery when asking the WTP question. Our results show that the income effect is too small to be the only source of the disparity. Since the disparity concentrates on a subsample of subjects, parametric and nonparametric tests of the WTA-WTP ratio may lead to contradictory results. The (...) disparity is significantly reduced when background risk is introduced. That is, putting subjects always into a risky position could improve the contingent valuation method, which is often concerned with the assessment of risky situations such as health risks, automobile safety, etc. (shrink)

By the end of the Second World War the advancing allied forces discovered a new nerve gas in Germany. It was called Tabun. Codenamed GA, it was found to be extremely toxic. British experts were immediately dispatched to examine the agent. On arrival, they discovered that German scientists had also developed even more toxic nerve agents, including Sarin, known as GB. The first organized testing of Sarin on humans began in October 1951 at Porton Down in Wiltshire, Britain's biochemical warfare (...) establishment since the First World War. In February 1953, volunteer number 562 experienced the first recorded serious adverse reaction. Testing continued. Two months later, on April 27, six subjects were given 300 milligrams of Sarin. One of the volunteers, a man named Kelly, suffered serious ill effects, fell into a coma, but then recovered. Although asked by their superiors to reduce the amount tested to the “lowest range of dosage”—which would have been somewhere in the region of 10–15 milligrams—Porton's scientists continued their tests with a “lower” dosage, reducing it from 300 to 200 milligrams. (shrink)

Justice at Nuremberg traces the history of the Nuremberg Doctors' Trial held in 1946-47, as seen through the eyes of the Austrian bliogemigrbliogé psychiatrist Leo Alexander. His investigations helped the United States to prosecute twenty German doctors and three administrators for war crimes and crimes against humanity. The legacy of Nuremberg was profound. In the Nuremberg code--a landmark in the history of modern medical ethics--the judges laid down, for the first time, international guidelines for permissible experiments on humans. One of (...) those who helped to formulate the code was Alexander. Justice at Nuremberg provides a detailed insight into the origins of human rights in medical science and into the changing role of international law, ethics and politics. (shrink)

This paper presents an experimental study of common consequence effects in binary choice, willingness-to-pay elicitation, and willingness-to-accept elicitation. We find strong evidence in favor of the fanning out hypothesis for both WTP and WTA. In contrast, the choice data do not show a clear pattern of violations in the absence of certainty effects. Our results underline the relevance of differences between pricing and choice tasks, and their implications for models of decision making under risk.

Common ratio effects should be ruled out if subjects’ preferences satisfy compound independence, reduction of compound lotteries, and coalescing. In other words, at least one of these axioms should be violated in order to generate a common ratio effect. Relying on a simple experiment, we investigate which failure of these axioms is concomitant with the empirical observation of common ratio effects. We observe that compound independence and reduction of compound lotteries hold, whereas coalescing is systematically violated. This result provides support (...) for theories which explain the common ratio effect by violations of coalescing instead of violations of compound independence. (shrink)

The implementation of online technologies to promote wellbeing is increasingly becoming a worldwide priority. This study includes secondary analyses of data and examined drop-out rates in an online guided self-help intervention for patients with anorexia nervosa. Specifically, rates of drop-out at end of treatment (i.e. six-week assessment), as well as intervention adherence (minimum of four of six online guided sessions) and differences between completers and drop-outs were examined. Motivation to change and associated patient variables were assessed as predictors of drop-out (...) using structural equation modelling. Ninety-nine patients were randomised to the intervention arm of the trial. Data were available for 82 individuals, 67 of whom completed the six-week assessment and attended a minimum of four online sessions. No significant differences were found between completers and drop-outs at baseline. At the end of the first week of participation, drop-outs from the six-week assessment or the intervention reported less satisfaction with their work with the mentor delivering online guidance. Greater confidence in own ability to change and higher controlled motivation (willingness to change due to pressure from others) predicted lower drop-out rates from the six-week assessment. Stronger alliance with the therapist at the treatment centre and lower psychological distress were associated with greater autonomous motivation (self-directed motivation) and importance and ability to change. Data demonstrate that a novel online guided self-help intervention for patients with anorexia nervosa is feasible. Early satisfaction with the program and external pressure to change have a protective role against drop-out rates. (shrink)

The majority consensus in the empirical literature is that probability weighting functions are typically inverse-S shaped, that is, people tend to overweight small and underweight large probabilities. A separate stream of literature has reported event-splitting effects and shown that they can explain violations of expected utility. This leads to the questions whether the observed shape of weighting functions is a mere consequence of the coalesced presentation and, more generally, whether preference elicitation should rely on presenting lotteries in a canonical split (...) form instead of the commonly used coalesced form. We analyze data from a binary choice experiment where all lottery pairs are presented in both split and coalesced forms. Our results show that the presentation in a split form leads to a better fit of expected utility theory and to probability weighting functions that are closer to linear. We thus provide some evidence that the extent of probability weighting is not an ingrained feature, but rather a result of processing difficulties. (shrink)

Hastings Center Report, Volume 51, Issue 5, Page 12-17, September‐October 2021.

In his excellent book Natural Signs and Knowledge of God: A New Look at Theistic Arguments, C. Stephen Evans argues that what underlies the classical theistic arguments are theistic natural signs. The awareness of our own contingency underlies the cosmological argument, beneficial order underlies the teleological argument, our experience of feeling moral obligations underlies the moral argument, and the intrinsic value of human beings underlies the axiological argument. Natural signs point to an entity without forcing belief in this entity upon (...) the perceiver. Therefore, natural signs can be interpreted in different ways. Understanding the classical theistic arguments as an expression of underlying theistic natural signs explains why the reactions to the arguments have been so different. (shrink)

A perfect being is a being which possesses all perfections essentially. A perfect being is essentially omniscient, essentially omnipotent, essentially perfectly good, and necessarily existing. In his excellent book “The Metaphysics of Perfect Beings” Michael J. Almeida investigates the following tough questions about perfect beings: What would a perfect being create? Which moral requirements would a perfect being (have to) fulfill when deciding what to create? Is there a minimum or a maximum amount of evil a perfect being would allow (...) to occur? Could a perfect being permit any instance of pointless and undeserved suffering of creatures? Does a perfect being have some freedom to choose what to create? Could a perfect being be just in sending some people eternally to heaven and some people eternally to hell? Almeida applies modern theories about vagueness, infinite values, possible world semantics and many universes to these questions. In this way Almeida investigates these questions in more detail and depth than they have been before and substantially advances the discussion of these issues. (shrink)

The paper provides a critical commentary on the article by Baker and McCullough on Medical Ethic's Appropriation of Moral Philosophy. The author argues that Baker and McCullough offer a more "pragmatic" approach to the history of medical ethics that has the potential to enrich the bioethics field with a greater historical grounding and sound methodology. Their approach can help us to come to a more nuanced understanding about the way in which medical ethics has connected, disconnected, and reconnected with philosophical (...) ideas throughout the centuries. The author points out that Baker and McCullough's model can run the danger of overemphasizing the role of medical ethicists whilst marginalizing the influence of philosophers and of other historical actors and forces. He critically reviews the two case studies on which Baker and McCullough focus and concludes that scholars need to bear in mind the levels of uncertainty and ambivalence that accompany the process of transformation and dissemination of moral values in medicine and medical practice. (shrink)