In the age of big data, machine learning models are globally used to execute default risk prediction. Imbalanced datasets and redundant features are two main problems that can reduce the performance of machine learning models. To address these issues, this study conducts an analysis from the viewpoint of different balance ratios as well as the selection order of feature selection. Accordingly, we first use data rebalancing and feature selection to obtain 32 derived datasets with varying ratios of balance (...) and feature combinations for each dataset. Second, we propose a comprehensive metric model based on multimachine learning algorithms to select the best-derived dataset with the optimal balance ratio and feature combination. Finally, the convolutional neural network is trained on the selected derived dataset to evaluate the performance of our approach in terms of type-II error, accuracy, G-mean, and AUC. There are two contributions in this study. First, the optimal balance ratio is found through the classification accuracy, which changes the deficiency of the existing research that samples are imbalanced or the balance ratio is 1 : 1 and ensures the accuracy of the classification model. Second, a comprehensive metric model based on the machine learning algorithm is proposed, which can simultaneously find the best balance ratio and the optimal feature selection. The experimental results show that our method can noticeably improve the performance of CNN, and CNN outperforms the other four commonly used machine learning models in the task of default risk prediction on four benchmark datasets. (shrink)

The construction of a financial risk prediction model has become the need of the hour due to long-term and short-term violations in the financial market. To reduce the default risk of peer-to-peer companies and promote the healthy and sustainable development of the P2P industry, this article uses a model based on the LightGBM algorithm to analyze a large number of sample data from Renrendai, which is a representative platform of the P2P industry. This article explores the base (...) LightGBM model along with the integration of linear blending to build an optimal default risk identification model. The proposed approach is applicable for a large number of multi-dimensional data samples. The results show that the prediction accuracy rate of the LightGBM algorithm model on the test set reaches 80.25%, which can accurately identify more than 80% of users, and the model has the best prediction performance in terms of different performance evaluation indicators. The integration of LightGBM and the linear blending approach yield a precision value of 91.36%, a recall of 75.90%, and an accuracy of 84.36%. The established LightGBM algorithm can efficiently identify the default of the loan business on the P2P platform compared to the traditional machine learning models, such as logistic regression and support vector machine. For a large number of multi-dimensional data samples, the LightGBM algorithm can effectively judge the default risk of users on P2P platforms. (shrink)

In this note, we consider a Merton model for default risk, where the firm’s value is driven by a Brownian motion and a compound Poisson process.

The notions of inference and default are used in pragmatics with different meanings, resulting in theoretical disputes that emphasize the differences between the various pragmatic approaches. This paper is aimed at showing how the terminological and theoretical differences concerning the two aforementioned terms result from taking into account inference and default from different points of view and levels of analysis. Such differences risk making a dialogue between the theories extremely difficult. However, at a functional level of analysis (...) the different theories, definitions, and approaches to interpretation can be compared and integrated. At this level, the standardization of pragmatic inferences can be regarded as the development of a specific type of presumptions, used to draw prima-facie interpretations. (shrink)

When our choice affects some other person and the outcome is unknown, it has been argued that we should defer to their risk attitude, if known, or else default to use of a risk avoidant risk function. This, in turn, has been claimed to require the use of a risk avoidant risk function when making decisions that primarily affect future people, and to decrease the desirability of efforts to prevent human extinction, owing to the (...) significant risks associated with continued human survival. I raise objections to the claim that respect for others’ risk attitudes requires risk avoidance when choosing for future generations. In particular, I argue that there is no known principle of interpersonal aggregation that yields acceptable results in variable population contexts and is consistent with a plausible ideal of respect for others’ risk attitudes in fixed population cases. GPI Working Paper No . 20-2022. (shrink)

ABSTRACT Though accused by critics of helping to cause the current financial crisis, credit‐default swaps are blameless. The accusation is understandable, however, given misunderstandings about how a credit‐default swap actually works. A careful look into its mechanism shows that it is not only simpler than thought, but that it is also vital to keeping the financial system strong by enabling financial institutions to better manage their risks. The risk taken on in a credit‐default swap (CDS) is (...) no different from the risk of making the underlying loan. CDSs allow risks to be spread more widely instead of being concentrated at vulnerable points, but they do not add to the total amount of risk. (shrink)

This paper examines whether bank capital ratios and default risk are associated with the gender of the bank’s Chief Executive Officer and Chairperson of the board. Given the documented gender-based differences in conservatism and risk tolerance, we postulate that female CEOs and board Chairs should assess risks more conservatively, and thereby hold higher levels of equity capital and reduce the likelihood of bank failure during periods of market stress. Using a large panel of U.S. commercial banks, we (...) document that banks with female CEOs hold more conservative levels of capital after controlling for the bank’s asset risk and other attributes. Furthermore, while neither CEO nor Chair gender is related to bank failure in general, we find strong evidence that smaller banks with female CEOs and board Chairs were less likely to fail during the financial crisis. Overall, our findings are consistent with the view that gender-based behavioral differences may affect corporate decisions. (shrink)

When our choice affects some other person and the outcome is unknown, it has been argued that we should defer to their risk attitude, if known, or else default to use of a risk avoidant risk function. This, in turn, has been claimed to require the use of a risk avoidant risk function when making decisions that primarily affect future people, and to decrease the desirability of efforts to prevent human extinction, owing to the (...) significant risks associated with continued human survival. I raise objections to the claim that respect for others’ risk attitudes requires risk avoidance when choosing for future generations. In particular, I argue that there is no known principle of interpersonal aggregation that yields acceptable results in variable population contexts and is consistent with a plausible ideal of respect for others’ risk attitudes in fixed population cases. GPI Working Paper No. 20-2022. (shrink)

In this paper I present my reflections on the ethics of science as described by Merton and as actually practiced by scientists and technologists. This ethics was the subject of Kuipers' paper "'Default norms' in Research Ethics" (Kuipers 2001). There is an implicit assumption in this ethics, notably in Merton's norm of communism, that knowledge is always, or unconditionally good, and hence that scientific research, and the dissemination of its results, is unconditionally good. I will give here reasons why (...) scientists are not permitted to proceed, as they actually do, on the basis of this assumption. There is no factual or other binding justification for this assumption, and the activities it gives rise to frequently conflict with the broadly accepted ethical principle of restricted liberty. A recent discussion on the risks and hazards of science and on the issue of relinquishment is presented. What is shown in this paper is that the scientists and technologists participating in this discussion frequently violate core values of science relating to logical and empirical scrutiny and systematic criticism, as mentioned in Merton's norms of universalism, organized skepticism, and disinterestedness. It is concluded that, in order to live up to these values and in order to operate in agreement with broader ethical principles, science should stimulate open and critical discussion on the hazards and negative effects of science and technology, and on the present failure on the part of law and politics to control those hazards and negative effects. Science should also take the possibility of relinquishing certain themes of research seriously as long as such flaws in the systems of law and political decision-making persist. (shrink)

We seek insights into potential benefits for firms adopting strategies to improve business sustainability in a carbon-constrained future. We investigate whether lenders incorporate a firm’s exposure to carbon-related risk into lending decisions through the cost of financing, and if so, importantly whether firms can mitigate the penalty by demonstrating an awareness of their carbon risks. We use a sample of 255 firm-year observations from eight industries over the period 2009–2013. We measure carbon-related risk exposure as the firm’s historical (...) carbon emissions and our primary measure of carbon risk awareness is based on the firm’s willingness to respond to the Carbon Disclosure Project survey. We document a positive association between cost of debt and carbon risk for firms failing to respond to the CDP. Further, this association is economically meaningful, with a one standard deviation increase in carbon risk mapping into between a 38 and 62 basis point increase in the cost of debt. Equally, we find that this penalty is effectively negated for firms exhibiting carbon risk awareness. Our results are robust when we consider alternate measures of carbon awareness—disclosure through alternative medium to the CDP and firms’ annual cash investment in new capital assets using “cleaner” technology. Our results highlight not only the importance of carbon awareness as a business strategy for polluting firms, but also its importance to lenders exposed to their clients’ default and reputational risk. The debt market appears to incorporate historical carbon emissions and forward-looking indicators of carbon performance. (shrink)

When Bayesian estimation is used to analyze Structural Equation Models, prior distributions need to be specified for all parameters in the model. Many popular software programs offer default prior distributions, which is helpful for novel users and makes Bayesian SEM accessible for a broad audience. However, when the sample size is small, those prior distributions are not always suitable and can lead to untrustworthy results. In this tutorial, we provide a non-technical discussion of the risks associated with the use (...) of default priors in small sample contexts. We discuss how default priors can unintentionally behave as highly informative priors when samples are small. Also, we demonstrate an online educational Shiny app, in which users can explore the impact of varying prior distributions and sample sizes on model results. We discuss how the Shiny app can be used in teaching; provide a reading list with literature on how to specify suitable prior distributions; and discuss guidelines on how to recognize behaving priors. It is our hope that this tutorial helps to spread awareness of the importance of specifying suitable priors when Bayesian SEM is used with small samples. (shrink)

Breastfeeding advocates have criticised the phrase ‘breast is best’ as mistakenly representing breastfeeding as a departure from the norm rather than the default for infant feeding. Breastfeeding mothers have an interest in representing breastfeeding as the default, for example, to counteract criticism of breastfeeding outside the home. This connects to an increasing trend to frame feeding babies formula as harmful, which can be seen in research papers, public policy and information presented to parents and prospective parents. Whether we (...) frame infant-feeding decisions in terms of harming or benefit, protection or risk matters because these distinctions are generally morally significant and thus holding that those who decide to use formula ‘harm’, ‘risk harm’ to their babies or describing formula feeding as ‘dangerous’ is likely to contribute to guilt associated with formula feeding and thus to undermine the well-being of vulnerable women. It may undermine attempts to improve breastfeeding rates by leading women to reject information about health outcomes surrounding infant-feeding decisions. However, these distinctions do not apply easily to infant-feeding decisions, in part because of difficulties in determining whether we should treat breastfeeding as the normative baseline for infant feeding. I show that neither the descriptive ‘facts of the matter’ nor moral or pragmatic considerations provide an easy answer before discussing how to respond to these considerations. (shrink)

How can one build AI systems such that they pursue the goals their designers want them to pursue? This is the alignment problem. Numerous authors have raised concerns that, as research advances and systems become more powerful over time, misalignment might lead to catastrophic outcomes, perhaps even to the extinction or permanent disempowerment of humanity. In this paper, I analyze the severity of this risk based on current instances of misalignment. More specifically, I argue that contemporary large language models (...) and game-playing agents are sometimes misaligned. These cases suggest that misalignment tends to have a variety of features: misalignment can be hard to detect, predict and remedy, it does not depend on a specific architecture or training paradigm, it tends to diminish a system’s usefulness and it is the default outcome of creating AI via machine learning. Subsequently, based on these features, I show that the risk of AI alignment magnifies with respect to more capable systems. Not only might more capable systems cause more harm when misaligned, aligning them should be expected to be more difficult than aligning current AI. (shrink)

When our choice affects some other person and the outcome is unknown, it has been argued that we should defer to their risk attitude, if known, or else default to use of a risk‐avoidant risk function. This, in turn, has been claimed to require the use of a risk‐avoidant risk function when making decisions that primarily affect future people, and to decrease the desirability of efforts to prevent human extinction, owing to the significant risks (...) associated with continued human survival. I raise objections to the claim that respect for others' risk attitudes requires risk‐avoidance when choosing for future generations. In particular, I argue that there is no known principle of interpersonal aggregation that yields acceptable results in variable population contexts and is consistent with a plausible ideal of respect for others' risk attitudes in fixed population cases. (shrink)

The rapid development of credit default swap market has changed the manner of credit risk management of banks to some extent and has had a new influence on the bank-enterprise credit model. In this study, the credit financing process of credit risk in small- and medium-sized enterprises gathers within a bank, which makes it difficult for SMEs to raise funds. On the basis of the perspective of CDS, we construct an incentive game model of bank-enterprise credit behavior (...) and analyze the influence mechanism of the credit financing of SMEs on CDS contract coupon rate, CDS payout ratio, bank-enterprise credit effort, and loan recovery rate when considering CDS. The result shows that the CDS contract leads to insufficient supervision after a bank loan, the moral hazard of the SMEs rises, and the probability of credit default events increases. In addition, in view of CDS, the SMEs can access more credit funds. (shrink)

When new drugs are approved by the Food and Drug Administration, the default assumption is that they will be available by prescription only, safe for use exclusively under clinical supervision. The paternalism underlying this default must be interrogated in order to ensure appropriate respect for patient autonomy. Upon closer inspection, prescription requirements are justified when nonprescription status would risk harm to third parties and when a large segment of the population would struggle to exercise their autonomy in (...) using a drug safely and effectively on their own. Although these justifications can support prescription status for many drugs, we propose that reversing the FDA's current default to instead begin with a presumption in favor of over‐the‐counter status is the best way to avoid interference with valid claims of patient autonomy. Under this approach, a range of drug products could be considered for an OTC switch, including oral contraceptives, statins, and HIV‐prevention drugs. (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)

In light of the potential long-term societal and economic benefits of novel nano-enabled products, there is an evident need for research and development to focus on closing the gap in nano-materials safety. Concurrent reflection on the impact of decision-making tools, which may lack the capability to assist sophisticated judgements around the risks and benefits of the introduction of novel products, is essential. This paper addresses the potential for extant decision support tools to default to a precautionary principle position in (...) the face of uncertainty. A more utilitarian-based approach could be facilitated by adding simple methods to formulate realistic hypotheses, which would assist non-specialists to make more nuanced decisions in terms of managing the risks of introducing new NMs. A decision support analytical framework is applied to identify the potential risks and benefits of novel nano-enabled products such as textiles with in-built enhanced antimicrobial activity for the prevention of nosocomial infections produced by spray or sonochemical coating possesses. While the results demonstrate valuable societal and environmental benefits compared to conventional products, due to uncertainty regarding the possible hazard to humans, sizable risks were identified in some cases due to the precautionary principle. (shrink)

This paper argues that some of the major theories in current business ethics fail to provide an adequate account of moral responsibility for the creation of systemic financial risk. Using the trading of credit default swaps during the 2008 financial crisis as a case study, I will formulate three challenges that these theories must address: the problem of risk imposition, the problem of unstructured collective harm and the problem of limited knowledge. These challenges will be used to (...) work out key shortcomings of stakeholder approaches and Integrative Social Contracts Theory. I will argue that pluralist connection models used in political theory can help to overcome these shortcomings. Adopting an approach based on these models shows that financial institutions incur obligations in five main areas: managing their own risk profile; remedying some of the harms caused by financial crises; supporting the development of better epistemic methods; curbing the transmission and amplification of initial losses; and instigating structural reforms. (shrink)

This paper argues that some of the major theories in current business ethics fail to provide an adequate account of moral responsibility for the creation of systemic financial risk. Using the trading of credit default swaps (CDS) during the 2008 financial crisis as a case study, I will formulate three challenges that these theories must address: the problem of risk imposition, the problem of unstructured collective harm and the problem of limited knowledge. These challenges will be used (...) to work out key shortcomings of stakeholder approaches and Integrative Social Contracts Theory. I will argue that pluralist connection models used in political theory can help to overcome these shortcomings. Adopting an approach based on these models shows that financial institutions incur obligations in five main areas: managing their own risk profile; remedying some of the harms caused by financial crises; supporting the development of better epistemic methods; curbing the transmission and amplification of initial losses; and instigating structural reforms. (shrink)

While there is an extensive literature on how the precautionary principle should be interpreted and when precautions should be taken, relatively little discussion exists about the fair distribution of costs of taking precautions. We address this issue by proposing a general framework for deciding how costs of precautions should be shared, which consists of a series of default principles that are triggered according to desert, rights, and ability to pay. The framework is developed with close attention to the pragmatics (...) of how distributions will affect actual behaviours. It is intended to help decision-makers think more systematically about distributional consequences of taking precautionary measures, thereby to improve decision-making. Two case studies—one about a ban on turtle fishing in Costa Rica, and one about a deep-sea mining project in Papua New Guinea—are given to show how the framework can be applied. (shrink)

The paper aims to investigate the effects of corporate social performance (CSP) on bankruptcy likelihood in times of economic upswing. This is important because prior related literature focused on data containing times of economic crises. We measure bankruptcy likelihood with the Altman Z score and CSP with Refinitiv ESG scores. By applying static panel data regressions and instrumental variable regressions on a sample of 6696 US-firm-year observations from 2010 to 2019 our main findings are: (i) In contrast to existing research, (...) the level of firms’ CSP seems to have no (positive) effect on the likelihood of bankruptcy during times of economic upswing. (ii) Increasing a firm’s CSP in times of economic upswing leads to a rise in bankruptcy likelihood. We conclude that the positive effects of CSP on stakeholder relationships fail to materialize in flourishing business environments. The costs of increasing CSP, thus, exceed their immediate positive effects and raise bankruptcy likelihood. However, as they reduce financial default risk in subsequent crises, CSP investments can be seen as a balancing measure. Our findings bear implications for scholars, practitioners, and policymakers. (shrink)

PurposeThe deployment and strategic use of e‐business, from basic e‐mail utilization to total enterprise integration, involves the commitment of financial and technical resources. The resources have to be financed. The purpose of this paper is to ascertain the views of trade promotion organizations, donors, export associations and banks on e‐business financing in Ghana's non‐traditional export sector, with the view to making policy contributions to the e‐business financing phenomenon in a developing economy context.Design/methodology/approachThe research design is qualitative since this is an (...) exploratory study and deep preliminary insights were sought about a hitherto under‐researched information systems topic from a developing country perspective. Officials from the trade promotion; export association, donor and financial communities were interviewed to generate insights to help understand the phenomenon under investigation.FindingsSome banks find it difficult financing e‐business in NTE firms because it is considered a new area with relatively higher risks and uncertainties. Banks would rather grant small loans to a few select small and medium enterprise exporters in an attempt to limit their default risk. The trade promotion organization is helping with up‐skilling for the improvement in e‐competencies in Ghana's NTE sector. The export product association in collaboration with the donor interviewed is in the throes of designing e‐business interventions in Ghana's NTE sector after recently completing an e‐readiness survey in the same sector.Originality/valueThis paper presents a modest contribution to the export firm‐electronic business literature from a resource‐centered perspective, in a DE context. Studies on e‐business financing in DEs are virtually non‐existent and the policy prescriptions could apply with minor modifications to other related contexts in respect of e‐business financing. (shrink)

Scientific and technological progress might change people’s capabilities or incentives in ways that would destabilize civilization. For example, advances in DIY biohacking tools might make it easy for anybody with basic training in biology to kill millions; novel military technologies could trigger arms races in which whoever strikes first has a decisive advantage; or some economically advantageous process may be invented that produces disastrous negative global externalities that are hard to regulate. This paper introduces the concept of a vulnerable world: (...) roughly, one in which there is some level of technological development at which civilization almost certainly gets devastated by default, i.e. unless it has exited the “semi-anarchic default condition”. Several counterfactual historical and speculative future vulnerabilities are analyzed and arranged into a typology. A general ability to stabilize a vulnerable world would require greatly amplified capacities for preventive policing and global governance. The vulnerable world hypothesis thus offers a new perspective from which to evaluate the risk-benefit balance of developments towards ubiquitous surveillance or a unipolar world order. (shrink)

Maps provide us with an easily recognizable version of the new demarcation problem: On the one hand, we are all familiar with graphics and maps that unacceptably distort our perceptions without being technically inaccurate or fictive; indeed there are whole websites groups devoted to curating such images for fun. On the other hand, there are multiple unavoidably value-laden choices that must be made in the production of any map. Producing a map requires choosing everything from the colors and thicknesses of (...) the lines, the scale, the projection system, the categories and parameters represented, and much more. There is no neutral default for any of these choices, and all of them shape what information the map communicates. All the visual choices involved in producing a map enable some information to be conveyed at the cost of hiding or distorting other information, as map makers themselves routinely acknowledge and discuss. Hence there are no straightforward answers to questions about the line between distortion and legitimate representational choices. I explore three distinctive kinds of epistemic risks in map-making that generate special versions of the demarcation problem, which I dub aesthetic risk, categorization risk, and simplification risk. I argue that in each case, even good maps – maps that are accurate and epistemically valuable – have the potential to mislead us. I end by looking at maps that offer special epistemic benefits by making clear their own lack of value-neutrality while still being accurate and epistemically fecund. (shrink)

Clearing algorithms are at the core of modern payment systems, facilitating the settling of multilateral credit messages with (near) minimum transfers of currency. Traditional clearing procedures use batch processing based on MILP - mixed-integer linear programming algorithms. The MILP approach demands intensive computational resources; moreover, it is also vulnerable to operational risks generated by possible defaults during the inter-batch period. This paper presents TORC3 - the Token-Ring Clearing Algorithm for Currency Circulation. In contrast to the MILP approach, TORC3 is a (...) real time heuristic procedure, demanding modest computational resources, and able to completely shield the clearing operation against the participating agents’ risk of default. (shrink)

The paper reviews the basics of development and implementation of the debt policy of Ukraine, outlines its formation principles and establishes requirements to normative legal documents which specify administrative measures in the field of the public debt. The research conducted shows that the main normative legal documents which govern activities of state administration bodies responsible for the debt policy implementation are the State Budget and the Program for State Debt Management of the Ministry of Finance of Ukraine. An analysis of (...) the structure of the above documents and ensuing governmental regulations of Ukraine indicates that the national debt policy is not a separate link of the public financial administration, it is shaped subsequent to the results of managerial decisions in the field of monetary relations, changes in the taxation system, operation of the efficiency control system of national taxes, the government deficit level, impacts of foreign economic factors etc. It is proved that debt operations in Ukraine are becoming a factor of economic risk for the state budget whereas the debt budget itself is becoming a destabilization factor. The budgetary policy of Ukraine, which is primarily aimed at maximization of tax collection, results in distortion of the public finance system and aggravates the economic status of numerous industries. The public debt service expenses are however still increasing and require public borrowings which keep growing year by year. The author indicates that the most unsuccessful decisions of the national leadership, which brought about a higher public debt, are the issue of internal public bonds for capitalization of the Privatbank PJSC in 2017 and poor state control over quasi-fiscal operations which may result in default of national Compulsory Social Insurance Funds on their obligations, accumulation of debts on VAT refund, remission of dead tax debts, instalment payment and deferral of money liabilities or tax debts of taxpayers, attraction of sovereign credits by resident economic entities, debt restructuring of such entities with public guarantees, supply of natural gas to heat-and-power engineering companies for generation of thermal energy at preferential prices, accrued receivables of the National Joint-Stock Company 'Naftogaz Ukrainy' for sale of natural gas to the population and heat-and-power engineering companies. (shrink)

Cardiopulmonary Resuscitation is the default response for persons who suffer cardiac or pulmonary arrest, except in cases in which there exists a do-not-resuscitate order. This default mindset is based on the rule of rescue and the ethical principle of beneficence. However, due to the lack of efficacy and the high risk of potential harm inherent in CPR, this procedure should not be the default intervention for cardiac or pulmonary arrest. Although CPR is a lifesaving medical intervention, (...) it has limited positive results and the potential for multiple harmful consequences. Given the limited potential of CPR as a medical procedure, clinicians and patients must be educated regarding its limited potential, and procedures must be developed to help determine when it is appropriate as a medical intervention. (shrink)

In February 2016, the Institute of Medicine released a report, commissioned by the United States Food and Drug Administration, on the ethical and social‐policy implications of so‐called three‐parent in vitro fertilization. The IOM endorses commencement of clinical trials on three‐parent IVF, subject to some initial limitations. Also called mitochondrial replacement or transfer, three‐parent IVF is an intervention comprising two distinct procedures in which the genetic materials of three people—the DNA of the father and mother and the mitochondrial DNA of an (...) egg donor—can be used to create a child. Three‐parent IVF would enable a woman with mitochondrial disease to have a genetically related child without transmitting the disease to the child. The possibility for three‐parent children has prompted criticism from many corners. Critics have pointed to ethical issues including safety concerns and risks to children, genetic and germline engineering concerns, the potential exploitation of the third‐parent egg donor, donor anonymity and privacy, and objections to creating babies with three parents, which undermines natural and traditional conceptions of procreation. Additionally, developing the technology would involve experimenting on, manipulating, and disposing of embryos. Although the IOM report considers the ethical concerns about the value of the three‐parent IVF technology, the IOM failed to give due attention to an important objection to the development of this technology: three‐parent IVF lacks the social value necessary to make investment of public resources in it ethical.Unlike the other concerns, this objection is not based on conservativism about new reproductive technologies or default favoritism of the status quo. I argue that the technology does not meet a plausible social value standard to render public research investment into its development ethical. Proponents of three‐parent IVF make inaccurate and exaggerated claims that it will eradicate mitochondrial disease and save lives. Were these claims true, proponents would have a strong case for the social value of the technology. But three‐parent IVF alone will not eradicate mitochondrial disease, and it will not save lives. Rather, it can create healthy lives. As I discuss, the moral distinction is crucial. Most importantly, investment in three‐parent IVF comes at the opportunity cost of researching treatment for mitochondrial disease that would benefit actual, living disease sufferers. (shrink)

When asked about humanity’s future relationship with computers, Marvin Minsky famously replied “If we’re lucky, they might decide to keep us as pets”. A number of eminent authorities continue to argue that there is a real danger that “super-intelligent” machines will enslave—perhaps even destroy—humanity. One might think that it would swiftly follow that we should abandon the pursuit of AI. Instead, most of those who purport to be concerned about the existential threat posed by AI default to worrying about (...) what they call the “Friendly AI problem”. Roughly speaking this is the question of how we might ensure that the AI that will develop from the first AI that we create will remain sympathetic to humanity and continue to serve, or at least take account of, our interests. In this paper I draw on the “neo-republican” philosophy of Philip Pettit to argue that solving the Friendly AI problem would not change the fact that the advent of super-intelligent AI would be disastrous for humanity by virtue of rendering us the slaves of machines. A key insight of the republican tradition is that freedom requires equality of a certain sort, which is clearly lacking between pets and their owners. Benevolence is not enough. As long as AI has the power to interfere in humanity’s choices, and the capacity to do so without reference to our interests, then it will dominate us and thereby render us unfree. The pets of kind owners are still pets, which is not a status which humanity should embrace. If we really think that there is a risk that research on AI will lead to the emergence of a superintelligence, then we need to think again about the wisdom of researching AI at all. (shrink)

Are we being manipulated online? If so, is being manipulated by online technologies and algorithmic systems notably different from human forms of manipulation? And what is under threat exactly when people are manipulated online? This volume provides philosophical and conceptual depth to debates in digital ethics about online manipulation. The contributions explore the ramifications of our increasingly consequential interactions with online technologies such as online recommender systems, social media, user-friendly design, micro-targeting, default-settings, gamification, and real-time profiling. The authors in (...) this volume address four broad and interconnected themes: • What is the conceptual nature of online manipulation? And how, methodologically, should the concept be defined? • Does online manipulation threaten autonomy, freedom, and meaning in life, and if so, how? • What are the epistemic, affective, and political harms and risks associated with online manipulation? • What are legal and regulatory perspectives on online manipulation? The Philosophy of Online Manipulation brings these various considerations together to offer philosophically robust answers to critical questions concerning our online interactions with one another and with autonomous systems. It will be of interest to researchers and advanced students working in moral philosophy, digital ethics, philosophy of technology, and the ethics of manipulation. (shrink)

Researchers doing welfare-related science frequently mischaracterize either situations of decision-theoretic mathematical/scientific uncertainty as situations of risk, or situations of risk as those of uncertainty. The paper outlines this epistemic/ethical problem ; surveys its often-deadly, welfare-related consequences in environmental-health sciences; and uses recent research on diesel particulate matter to reveal 7 specific methodological ways that scientists may mischaracterize lethal risks instead as situations of uncertainty, mainly by using methods and assumptions with false-negative biases. The article closes by outlining two (...) normative strategies for curbing misrepresentations of risk and uncertainty, especially in welfare-affecting science. (shrink)

ABSTRACT The main cause of the crisis was the behavior of the banks—largely a result of misguided incentives unrestrained by good regulation. Conservative ideology, along with unrealistic economic models of perfect information, perfect competition, and perfect markets, fostered lax regulation, and campaign contributions helped the political process along. The banks misjudged risk, wildly overleveraged, and paid their executives handsomely for being short‐sighted; lax regulation let them get away with it—putting at risk the entire economy. The mortgage brokers neglected (...) due diligence, since they would not bear the risk of default once their mortgages had been securitized and sold to others. Others can be blamed: the ratings agencies that judged subprime securities as investment grade; the Fed, which contributed low interest rates; the Bush administration, whose Iraq war and tax cuts for the rich made low interest rates necessary. But low interest rates can be a boon; it was the financial institutions that turned them into a bust. (shrink)

Parsa-Parsi et al systematically discuss and elucidate contentious and non-controversial ethical issues that emerged during the ICoME (International Code of Medical Ethics) revision process and the consensus they achieved. The ethical issues discussed include the physician’s duty to act in the best interests of patients and to ensure they are protected from the unjustifiable risk of harm, respect for patient autonomy and the duties of physicians during emergencies, among others. This paper examines paragraph 26, which requires doctors to provide (...) only medically justified remote treatment, ensure patients offer informed consent and adequately protect their confidentiality.1 At the peak of the COVID-19 pandemic, many countries in Europe and America implemented remote-by-default healthcare policies. At that time, the policy aimed to ensure that patients enjoyed continued access to care while protecting healthcare professionals’ health and well-being. After the COVID-19 pandemic, this policy remained in place. Regardless of the nature of their ailment, patients have consistently preferred in-person care out of concern that their health issues might not be accurately diagnosed and that they may not receive quality care …. (shrink)

The article aims to demonstrate that the nudge theory suffers from three main weaknesses stemming from its theoretical dependence on behavioural economics. The first two weaknesses endanger the paternalistic goal, whereas the third does not justify the libertarian attribute. The first weakness lies in the incomplete realistic characterisation of behavioural economics theory that is the central theoretical pillar of Nudge theory. The second weakness is even more relevant. The normative model of behavioural economics is neoclassical rationality. It can be applied (...) to choices in conditions of risk, when it is possible to forecast the probability of the outcomes of one’s choices. On the contrary the real life problems are inside a complex and uncertain environment. In an uncertain environment the neoclassical algorithms are no longer valid, in that they postulate the knowledge of the probability of the outputs. Thus errors and bias, as observed in behavioural economics, are not such in many instances, but they are instead adaptive and therefore rational responses to the context of decision-making. Therefore nudge theory that pursues the normative paternalistic objective of neutralising the bias and judgement errors discovered by behavioural economics and putting paternalistically the citizen on the right track, is in fact proceeding in the wrong direction. The last weakness concerns an assumption of Nudge theory about the duality of mind. System 1 represents the intuitive mind, while System 2 corresponds to the analytical one. System 1 tends to make decisions quickly and unconsciously, while System 2 follows a slow and conscious process. Biases and judgement errors are mainly generated by System 1. However, System 2 may later intervene to correct them. From this premise, the Nudge theory affirms its libertarian character. In this paper I will argue that the dualism of the mind would not entail the reversibility of some nudges, particularly of default states. In this way the fundamental pillar is weakened to justify the libertarian character of the nudge theory. (shrink)

Much behavioral welfare economics assumes that expected utility theory does not accurately describe most human choice under risk. A substantial literature instead evaluates welfare consequences by taking cumulative prospect theory as the natural default alternative, at least where description is concerned. We present evidence, based on a review of previous literature and new experimental data, that the most empirically adequate hypothesis about human choice under risk is that it is heterogeneous, and that where EUT does not apply, (...) more choice is characterized by rank-dependent utility models than by CPT. Most of the apparently loss-averse choice behavior results from probability weighting rather than from direct disutility experienced when an outcome is framed as a loss against an idiosyncratic reference point. We then consider implications of this finding for methodological debates about how to model welfare effects of policies, and argue that abandonment of a dogmatic belief in CPT as the correct theory of risk human choice exposes a conceptual error that is widespread in behavioral welfare economics. We provide concluding reflections on second-order, philosophical issues around the grounding of normative commitments in policy-focused economics. (shrink)

The COVID-19 pandemic has, of necessity, demanded the rapid incorporation of virtual technologies which, suddenly, have superseded the physical medical encounter. These imperatives have been implemented in advance of evaluation, with unclear risks to patient care and the nature of medical practice that might be justifiable in the context of a pandemic but cannot be extrapolated as a new standard of care. Models of care fit for purpose in a pandemic should not be generalized to reconfigure medical care as virtual (...) by default, and personal by exception at the conclusion of the emergency. (shrink)

One challenge in providing an adequate definition of physical disability is unifying the heterogeneous bodily conditions that count as disabilities. We examine recent proposals by Elizabeth Barnes (2016), and Dana Howard and Sean Aas (2018), and show how this debate has reached an impasse. Barnes’ account struggles to deliver principled unification of the category of disability, whilst Howard and Aas’ account risks inappropriately sidelining the body. We argue that this impasse can be broken using a novel concept: marginalised functioning. Marginalised (...) functioning concerns the relationship between a person’s bodily capacities and their social world: specifically, their ability to function in line with the default norms about how people can typically physically function that influence the structuring of social space. We argue that attending to marginalised functioning allows us to develop, not one, but three different models of disability, all of which—whilst having different strengths and weaknesses—unify the category of disability without sidelining the body. (shrink)

In guarding against inferential mistakes, experimental comparative cognition errs on the side of underattributing sophisticated cognition to animals, or what I refer to as the underattribution bias. I propose eliminating this bias by altering the method of choosing the default, or null, hypothesis. Rather than choosing the most parsimonious null hypothesis, as is current practice, I argue for choosing the best-evidenced hypothesis. Doing so at once preserves the risk-controlling structure of the current statistical paradigm and introduces a sensitivity (...) to probability-conferring empirical and theoretical information. This analysis illustrates how values like parsimony can covertly shape statistical-experimental design and inference. (shrink)

ABSTRACT Why did the popping of the housing bubble bring the financial system—rather than just the housing sector of the economy—to its knees? The answer lies in two methods by which banks had evaded regulatory capital requirements. First, they had temporarily placed assets—such as securitized mortgages—in off‐balance‐sheet entities, so that they did not have to hold significant capital buffers against them. Second, the capital regulations also allowed banks to reduce the amount of capital they held against assets that remained on (...) their balance sheets—if those assets took the form of AAA‐rated tranches of securitized mortgages. Thus, by repackaging mortgages into mortgage‐backed securities, whether held on or off their balance sheets, banks reduced the amount of capital required against their loans, increasing their ability to make loans many‐fold. The principal effect of this regulatory arbitrage, however, was to concentrate the risk of mortgage defaults in the banks and render them insolvent when the housing bubble popped. (shrink)

Lockdown measures in response to the COVID-19 pandemic involve placing huge burdens on some members of society for the sake of benefiting other members of society. How should we decide when these policies are permissible? Many writers propose we should address this question using cost-benefit analysis, a broadly consequentialist approach. We argue for an alternative non-consequentialist approach, grounded in contractualist moral theorising. The first section sets up key issues in the ethics of lockdown, and sketches the apparent appeal of addressing (...) these problems in a CBA frame. The second section argues that CBA fundamentally distorts the normative landscape in two ways: first, in principle, it allows very many morally trivial preferences—say, for a coffee—might outweigh morally weighty life-and-death concerns; second, it is insensitive to the core moral distinction between victims and vectors of disease. The third section sketches our non-consequentialist alternative, grounded in Thomas Scanlon’s contractualist moral theory. On this account, the ethics of self-defence implies a strong default presumption in favour of a highly restrictive, universal lockdown policy: we then ask whether there are alternatives to such a policy which are justifiable to all affected parties, paying particular attention to the complaints of those most burdened by policy. In the fourth section, we defend our contractualist approach against the charge that it is impractical or counterintuitive, noting that actual CBAs face similar, or worse, challenges. (shrink)

This article explores recent developments in the sociology of the arts, namely the new theoretical framework set up by the French sociologist Pierre-Michel Menger in order to approach the artistic activity. It aims to show how he has shaped new tools of understanding and modelling for exploring the arts, as a particular world of action. Laying down the foundation of a conception of action related to symbolic interactionism and drawing on the economic analysis of risk and uncertainty, Menger move (...) towards a model where uncertainty, not determinism, is the default category. Uncertainty is thus the principle unifying the analysis and understanding of the particularities of the arts, and the main argument in integrating sociological and economic studies on artistic activities. Correlatively, artistic creation is qualified as an act of work, the creative work being defined as a system of action in uncertain horizon. Within this model, the artists are seen less like “rational fools” and more like Bayesian actors, adopting strategies for managing risk and uncertainty. (shrink)

The idea that a serious threat to scientific realism comes from unconceived alternatives has been proposed by van Fraassen, Sklar, Stanford and Wray among others. Peter Lipton's critique of this threat from underconsideration is examined briefly in terms of its logic and its applicability to the case of space-time and particle physics. The example of space-time and particle physics indicates a generic heuristic for quantitative sciences for constructing potentially serious cases of underdetermination, involving one-parameter family of rivals T_m that work (...) as a team rather than as a single rival against default theory T_0. In important examples this new parameter has a physical meaning and makes a crucial _conceptual_ difference, shrinking the symmetry group and in some case putting gauge freedom, formal indeterminism vs. determinism, the presence of the hole argument, etc., at risk. Methodologies akin to eliminative induction or tempered subjective Bayesianism are more demonstrably reliable than the custom of attending only to "our best theory": they can lead either to a serious rivalry or to improved arguments for the favorite theory. The example of General Relativity vs. massive spin 2 gravity, a recent topic in the physics literature, is discussed. Arguably the General Relativity and philosophy literatures have ignored the most serious rival to General Relativity. (shrink)

In this paper we discuss two issues addressed by Stanley in How Propaganda Works: the status of slurs (Section 1) and the notion of positive propaganda (Section 2). In particular, in Section 1 we argue contra Stanley that code words like ‘welfare’ are crucially different from slurs in that the association between the lexical item and an additional social meaning is not as systematic as it is for slurs. In this sense, slurs bring about a special kind of propagandistic effect, (...) even if it typically concerns informal contexts rather than public debates. In Section 2, we consider positive propaganda and its relation to emotional effects. For Stanley, positive propaganda relies on the production of emotional effects, feature which risks to erode rational debates even if there is a good purpose behind. Instead, we argue that positive propaganda can work with no appeal to emotions. To this end, we focus on the use of ‘she’ as the default personal pronoun in academic writing and suggest that this measure can count as positive propaganda which rather than eroding rational debates by relying on emotional effects, closely resembles affirmative action aimed at counterbalance a pre-existing form of injustice and inequality. (shrink)

In A Secular Age, Taylor introduces the idea of porous subjectivity by way of elucidating the mode of being typical of the enchanted pre-modern world, and juxtaposes it to the buffered self typical of the disenchanted modern world. The framing of the problem in this way, with the argument so clearly oriented as an attack on the latter position, risks a polarization that defaults to the former as the preferred option. These, though, are not our only choices. There is much (...) to recommend Taylor’s notion of porous subjectivity as distinct from the buffered self of atomistic individualism. But Taylor associates the emergence of the disenchanted world with disengaged reason, and the existence of an enchanted world with a deeper mode of engagement in the world. If we instead focus upon modes of engagement with the world separate from the question of enchantment, we can perhaps further our understanding of human subjectivity and relations with others. (shrink)

SummaryIn 1968, a prospective study was started in collaboration with the Family Planning Association to try to provide a balanced view of the beneficial and harmful effects of different methods of contraception. This investigation is now in progress at seventeen clinics and over 17,000 women are under observation. At the time of recruitment, all these women were married white British subjects, aged 25–39 years, who voluntarily agreed to participate. Fifty-six per cent were using oral contraceptives, 25% were using a diaphragm (...) and 19% were using an intrauterine device. During follow-up each woman is questioned at return visits to the clinic and a record of pregnancies and their outcome, hospital referrals, changes in contraceptive methods and the results of cervical smears, is accumulated. Women who default are sent a postal questionnaire and, if this is not returned, are telephoned or visited in their homes to collect the necessary information.So far, data obtained during 56,000 woman-years of observation are available for analysis. Follow-up has been maintained with an annual lapse rate of about 0.3%due to withdrawal of co-operation or loss of contact; adherence to the method of contraception in use at recruitment has been reasonably good, and the reporting of pregnancies and hospital admissions appears to have been both reliable and unbiased.The present data include only 24 deaths, so the mortality associated with different contraceptive methods cannot yet be estimated. With regard to morbidity, however, our preliminary results closely resemble those obtained in the prospective study carried out by the Royal College of General Practitioners and in the principal retrospective studies carried out in Britain and the United States. Women who used oral contraceptives at the start of the study experienced adeficiencyof hospital referrals for cancer, benign lesions of the breast, menstrual disorders other than amenorrhoea, duodenal ulcer, and retention cysts of the ovary; they showed anexcessof referrals for cerebrovascular disease, cervical erosion, skin disorders, self-poisoning, migraine, venous thrombosis and embolism, hayfever, gallbladder disease, amenorrhoea, and sterility. Women who used a diaphragm showed adeficiencyof hospital referrals for carcinoma-in-situ and dysplastic lesions of the cervix uteri and accidental injury; and anexcessof referrals for haemorrhoids and cystitis. Women who used an IUD experienced anexcessof hospital referrals for anaemia, varicose veins and salpingitis. About half of these differences were predicted from other studies while some suggestive evidence already existed for a further five. Of the remaining six, some probably reflect the influence of selective factors or chance.Multiple pregnancies, stillbirths, malformations, the sex ratio and birthweight showed no consistent relationship to method of contraception. The outcome of unplanned pregnancies occurring in women using an IUD, however, was remarkably unfavourable both in terms of ectopic gestation and miscarriage.Clear evidence was found of impairment of fertility after discontinuation of oral contraceptives. Whether this is likely to lead to permanent sterility in some women is uncertain.The study has provided data on the efficacy of a wide variety of contraceptive methods. In general the failure rates are in keeping with those obtained in other large-scale studies, save that those for the diaphragm and the sheath are much lower than those usually quoted.The available evidence does not yet allow a final balance to be struck between the benefits and risks associated with the new methods of contraception that have become widely used during the last two decades. It seems clear, however, that there are no material risks associated with the use of the diaphragm apart from the risk of pregnancy and that there may be some unintended benefits. (shrink)

Unlike other organs that operate continuously, such as the heart and kidneys, many of the operations of the nervous system shut down during sleep. The evolutionarily conserved unconscious state of sleep that puts animals at risk from predators indicates that it is an indispensable integral part of systems operation. A reasonable expectation is that any hypothesis for the mechanism of the nervous system functions should be able to provide an explanation for sleep. In this regard, the semblance hypothesis is (...) examined. Postsynaptic membranes are continuously being depolarized by the quantally released neurotransmitter molecules arriving from their presynaptic terminals. In this context, an incidental lateral activation of the postsynaptic membrane is expected to induce a semblance (cellular hallucination of arrival of activity from its presynaptic terminal, which forms a unit for internal sensation) of the arrival of activity from its presynaptic terminal as a systems property. This restricts induction of semblance to a context of a very high ratio of the duration of the default state of neurotransmitter-induced postsynaptic depolarization to the total duration of incidental lateral activations of the postsynaptic membrane. This requirement spans within a time-bin of a few sleep-wake cycles. Since the duration of quantal release remains maximized, the above requirement can be achieved only by ceiling the total duration of incidental lateral activations of the postsynaptic membrane, which necessitates a state of sleep. (shrink)

This issue’s “Legal Briefing” column continues coverage of recent legal developments involving medical decision making for unbefriended patients. These patients have neither decision-making capacity nor a reasonably available surrogate to make healthcare decisions on their behalf. This topic has been the subject of recent articles in JCE. It has been the subject of major policy reports. Indeed, caring for the unbefriended has even been described as the “single greatest category of problems” encountered in bioethics consultation. Moreover, the scope of the (...) problem continues to expand, especially with rapid growth in the elderly population and with an increased prevalence of dementia.Unfortunately, most U.S. jurisdictions have failed to adopt effective healthcare decision-making systems or procedures for the unbefriended. “Existing mechanisms to address the issue of decision making for the unbefriended are scant and not uniform.” Most providers are “muddling through on an ad hoc basis.” Still, over the past several months, a number of state legislatures have finally addressed the issue. These developments and a survey of the current landscape are grouped into the following 14 categories. The first two categories define the problem of medical decision making for the unbefriended. The remaining 12 describe different solutions to the problem. The first six categories were covered in Part 1 of this article; the last eight categories are covered in this issue (Part 2). 1. Who are the unbefriended?2. Risks and problems of the unbefriended3. Prevention: advance care planning, diligent searching, and careful capacity assessment4. Decision-making mechanisms and standards5. Emergency exception to informed consent6. Expanded default surrogate lists: close friends7. Private guardians8. Volunteer guardians9. Public guardians10. Temporary and emergency guardians11. Attending physicians12. Other clinicians, individuals, and entities13. Institutional committees14. External committees. (shrink)