Fundamental Hope and Practical Identity

This article considers the question ‘What makes hope rational?’ We take Adrienne Martin’s recent incorporation analysis of hope as representative of a tradition that views the rationality of hope as a matter of instrumental reasons. Against this tradition, we argue that an important subset of hope, ‘fundamental hope’, is not governed by instrumental rationality. Rather, people have reason to endorse or reject such hope in virtue of the contribution of the relevant attitudes to the integrity of their practical identity, which makes the relevant hope not instrumentally but intrinsically valuable. This argument also allows for a new analysis of the reasons people have to abandon hope and for a better understanding of non-fundamental, ‘prosaic’ hopes

Commitment Contracts

We review the theoretical and empirical literature on commitment devices.A commitment device is any arrangement, entered into by an individual, with the aim of making it easier to fulfill his or her own future plans. We argue that there is growing empirical evidence supporting the proposition that people demand commitment devices and that these devices can change behavior. We highlight the importance of further research exploring soft commitment – those involving only psychological costs – and the welfare consequences of hard commitments – those involving actual costs – especially in the presence of bounded rationality.consumer/household economics, institutional and behavioral economics

Consumption Commitments and Risk Preferences

Many households devote a large fraction of their budgets to "consumption commitments" -- goods that involve transaction costs and are infrequently adjusted. This paper characterizes risk preferences in an expected utility model with commitments. We show that commitments affect risk preferences in two ways: (1) they amplify risk aversion with respect to moderate-stake shocks and (2) they create a motive to take large-payoff gambles. The model thus helps resolve two basic puzzles in expected utility theory: the discrepancy between moderate-stake and large-stake risk aversion and lottery playing by insurance buyers. We discuss applications of the model such as the optimal design of social insurance and tax policies, added worker effects in labor supply, and portfolio choice. Using event studies of unemployment shocks, we document evidence consistent with the consumption adjustment patterns implied by the model.

Flexibility in International Agreements

This chapter is a contribution to the forthcoming edited volume INTERNATIONAL LAW AND INTERNATIONAL RELATIONS: TAKING STOCK (Jeffrey Dunoff & Mark A. Pollack eds., Cambridge University Press 2012). The chapter provides an overview of flexibility mechanisms in international agreements and the role of such mechanisms in promoting or inhibiting international cooperation. Part I reviews the many flexibility devices available to treaty makers. It divides these tools into two broad categories: formal mechanisms (such as reservations, escape clauses, and withdrawal provisions) and informal practices (such as auto-interpretation, nonparticipation, and noncompliance). Part II reviews the international law and international relations scholarship on the design and use of treaty flexibility mechanisms, focusing on studies of exit and escape clauses. Part III highlights several conclusions that emerge from the burgeoning literature on treaty flexibility and suggests avenues for future research

Cartesian Humility and Pyrrhonian Passivity: The Ethical Significance of Epistemic Agency

While the Academic sceptics followed the plausible as a criterion of truth and guided their practice by a doxastic norm, so thinking that agential performances are actions for which the agent assumes responsibility, the Pyrrhonists did not accept rational belief-management, dispensing with judgment in empirical matters. In this sense, the Pyrrhonian Sceptic described himself as not acting in any robust sense of the notion, or as ‘acting’ out of sub-personal and social mechanisms. The important point is that the Pyrrhonian advocacy of a minimal conception of ‘belief’ was motivated by ethical concerns: avoiding any sort of commitment, he attempted to preserve his peace of mind. In this article, I argue for a Cartesian model of rational guidance that, in line with some current versions of an agential virtue epistemology, does involve judgment and risk, and thus which is true both to our rational constitution and to our finite and fallible nature. Insofar as epistemic humility is a virtue of rational agents that recognise the limits of their judgments, Pyrrhonian scepticism, and a fortiori any variety of naturalism, is unable to accommodate this virtue. This means that, in contrast to the Cartesian model, the Pyrrhonist does not provide a satisfactory answer to the problem of cognitive disintegration. The Pyrrhonist thus becomes a social rebel, one that violates the norm of serious personal assent that enables the flourishing of a collaborative and social species which depends on agents that, however fallible, are accountable for their actions and judgments

From cognitive science to cognitive neuroscience to neuroeconomics

As an emerging discipline, neuroeconomics faces considerable methodological and practical challenges. In this paper, I suggest that these challenges can be understood by exploring the similarities and dissimilarities between the emergence of neuroeconomics and the emergence of cognitive and computational neuroscience two decades ago. From these parallels, I suggest the major challenge facing theory formation in the neural and behavioural sciences is that of being under-constrained by data, making a detailed understanding of physical implementation necessary for theory construction in neuroeconomics. Rather than following a top-down strategy, neuroeconomists should be pragmatic in the use of available data from animal models, information regarding neural pathways and projections, computational models of neural function, functional imaging and behavioural data. By providing convergent evidence across multiple levels of organization, neuroeconomics will have its most promising prospects of success

Speculative Behaviour, Debt Default and Contagion: An Explanation of the Latin American Crisis 2001-2002

This paper provides a model incorporating strategic speculative behaviour into a framework of debt default and contagion. A basic model of contagion shows how economies which appear fundamentally sound, can fail to meet foreign obligations when there are inter-linkages with a defaulting country. Introducing speculators into the framework increases the incidence of debt default and contagion. However, when these speculators view the economy with a degree of uncertainty, the likelihood of default and contagion is even greater. SpeculatorsÂ’ perceptions over the state of the economy are therefore paramount when estimating the impact of a crisis on a region.Currency Crises, Contagion, Common Knowledge.

Challenges in Modeling the Effects of Trade Agreements on the Agricultural Sector

Major issues and challenges encountered in modeling and analyzing agricultural and trade policy reforms are reviewed. We focus on the modeling approach and pay special attention to the type and scope of the models, the calibration of a realistic baseline scenario, the representation of the reform agreement, the use of extra-model information, the choice of metrics to measure reform impacts, and emerging issues in policy modeling. Existing solutions and unresolved issues are examined. We stress the complementarity of various modeling approaches in assessing policy reforms and the importance of helping users understand the limitations of the chosen approach. Keywords: agricultural policy, economic modeling, trade agreements. JEL classification: Q17, Q18, F13

Governance of Crown Financial Assets

This paper investigates the agency problems associated with the public management of a large financial asset portfolio. After considering the relevant theoretical and empirical literature, a set of institutional arrangements are presented that should reduce the extent of the potential agency problems faced. Key design features include: mechanisms for enhancing policy credibility; the use of existing market mechanisms and regulation where possible; and the creation of a public-sector institution to perform administrative functions. The paper does not consider the issues of optimal fiscal policy, or the appropriate risk tolerance for the Crown, although the conclusions drawn from this study may contribute to these debates.