Rational Demand Research Articles

Unsharp Sharpness

AbstractIn a recent, thought‐provoking paper Adam Elga ((2010) argues against unsharp – e.g., indeterminate, fuzzy and unreliable – probabilities. Rationality demands sharpness, he contends, and this means that decision theories like Levi's (1980, 1988), Gärdenfors and Sahlin's (1982), and Kyburg's (1983), though they employ different decision rules, face a common, and serious, problem. This article defends the rule to maximize minimum expected utility against Elga's objection.

Tiers of Scrutiny in Enumerated Powers Jurisprudence

This Article identifies and analyzes the recent emergence of a “tiers of scrutiny” system in Supreme Court jurisprudence respecting the boundaries of Congress’s enumerated powers. The inquiry is motivated by the Court’s recent ruling on the federal healthcare law, which demonstrated that the national legislature’s election among its diverse textual sources of authority in Article I can have large, outcome-determinative consequences in constitutional challenges to federal laws. This is so because the Court not only delineates each power’s substantive boundaries differently but also applies distinct standards of review to the various legislative powers enumerated in Article I and elsewhere in the Constitution. Variation in the standard of review generates both synchronic and diachronic oscillation in the quantum of empirical justification and means-end rationality demanded of Congress. This observed heterogeneity in the judicial demand for legislative rationality and empirical evidence is quite distinct from questions of how broadly or narrowly the substance of each enumerated power is defined. This Article’s threshold contribution is a comprehensive documentation of variation in doctrinal formulae concerning the standard of review in enumerated powers cases. Having demonstrated the existence of tiers of scrutiny for enumerated powers, it then evaluates their use in enumerated powers jurisprudence. Drawing on political science scholarship, social choice theory, and public choice theory, it demonstrates that the Court’s use of tiers of scrutiny has deleterious effects on judicial and legislative incentives and behavior. This Article then identifies six potential justifications for the Court’s emergent practice of calibrating judicial review differentially by enumerated power. Closely examining each of those six justifications for stratified review, it finds all of them wanting. At the same time as it creates negative externalities, therefore, the practice of tiered review for enumerated powers lacks any compelling normative justification. By abandoning the emerging tiers of scrutiny and instead employing a lockstep approach to the review of enumerated powers, this Article suggests, federal courts would reduce opportunities for strategic behavior by judges and elected officials. The proposed doctrinal reformulation would also introduce clarity into a currently opaque, yet abidingly important, domain of public law.

The Welfare Impact of Self-supplied Water Pricing in Canada: A Computable General Equilibrium Assessment

This paper uses a computable general equilibrium model to assess the welfare cost of changing the method of water allocation in Canada towards one that uses prices to ration demand. We model the introduction of a price on both water that is abstracted as well as water that is consumed (that is abstracted, and not returned to the source). We estimate that reducing water consumption by 25 % would require imposition of a price on water consumption of around $$\$0.21/\text{ m }^{3}$$ . Similarly, introduction of a water abstraction charge of about $$\$0.013/\text{ m }^{3}$$ would be sufficient to reduce water abstraction by 25 %. We find that if revenues from water pricing are returned in lump sum to households, the introduction of water pricing would result in a modest welfare loss. When revenues from water pricing are used to offset existing taxes, we find a gain in welfare corresponding to a ‘strong double dividend.’

Water consumption in public schools for the city of Bologna, Italy

For most buildings considered to be of a public non-residential type there are insufficient published data to establish and compare the theoretical standards with actual consumption data. Therefore, water consumption per user in non-residential buildings is still a very complicated issue for engineers and designers involved in analysing water demand and water management. This is why linking water consumption and school occupancy is the goal of this paper, trying to set the basis for further design, conservation and educational interventions on this topic. This research integrates quantitative data of water consumption, through water metering and analysis, and historical data about users in buildings. We focused on consumptions for four types of schools: nurseries (0–3-year-old children), kindergartens (3–6 years), elementary schools (6–11 years) and secondary 1st grade schools (11–14 years). The results are that the rational basic demand for water is estimated as 48.8 l per pre-school student per day and 18.7 l per elementary/secondary school student per day. Therefore we found that younger children use more water on a daily basis than older ones, probably because they need more services, such as laundries and kitchens, whereas older students consume water mainly in restrooms.

DIACHRONIC CONSTRAINTS OF PRACTICAL RATIONALITY

Rationality imposes constraints on combinations of psychological attitudes. For instance, rationality demands that, at any particular time, if one both intends to φ and believes that ψ-ing is a necessary means to φ-ing, then one ought to intend to ψ . In spite of disagreements about the nature, source, and scope of these rational constraints, it seems uncontroversial that the stock examples concern combinations of contemporaneous attitudes.1 It is not immediately apparent, however, whether there are genuinely diachronic rational constraints, i.e., rational pressures on cross-temporal combinations of attitudes. In this paper, I want to consider the more specific question of whether there might be genuinely diachronic constraints on the rationality of intentions. I maintain that if these constraints exist, they arise in response to the distinctive predicament of agents who have to act over time. Temporal agents are forced to pursue temporally extended activities using resources and abilities that are usually scarce, unequally distributed over time, and unstable. There are three distinct features of the diachronic predicament of temporal agents:

Long term energy demand projection and potential for energy savings of Croatian tourism–catering trade sector

Today, tourism represents one of the backbones of Croatian economy and one of the main factors of its growth. Combined with catering trade sector, tourism represents a significant energy consumer that has the tendencies of future growth. Since services sector, which tourism–catering trade sector is a part of, is not yet well described regarding future energy balances it would be very interesting to see how could possible future growth in tourism influence energy consumption of the services sector in Croatia. Through this paper long term energy demand projections of tourism–catering trade sector were studied with special emphasis on future growth of tourism in Croatia as well as different mechanisms that might lead to certain energy savings. Bottom-up approach was chosen as the most suitable one since it allows better quantification of different measures, technological or legal, that would influence future energy demand. Downside of this approach is extensive input data that is required to analyse and model future energy demand which is roughly divided into heating/cooling section and all other consumption. Results show that additional energy savings in the tourism–catering trade sector are possible if careful and rational demand side planning is in place.

Study on Development and Application of Green Environmental Clothing Materials

Nowadays, human society is facing three major issues: environment, resource and population, among which environmental issue is especially outstanding. With the rapid development of global economy and science and technology, more and more people begin to pay attention to the deteriorating environment, in particular, limited resource and unsustainable environment are realized by more countries. Western countries proposed application of environmental protection concept to modern human industrial activities very early. Based on this, research and development of environmental clothes began in 1930s, when western countries started to study environmental clothes for the purpose of security and strategy. It becomes consumers’ rational demand to choose environmental clothes.

Regret and instability in causal decision theory

Andy Egan has recently produced a set of alleged counterexamples to causal decision theory (CDT) in which agents are forced to decide among causally unratifiable options, thereby making choices they know they will regret. I show that, far from being counterexamples, CDT gets Egan’s cases exactly right. Egan thinks otherwise because he has misapplied CDT by requiring agents to make binding choices before they have processed all available information about the causal consequences of their acts. I elucidate CDT in a way that makes it clear where Egan goes wrong, and which explains why his examples pose no threat to the theory. My approach has similarities to a modification of CDT proposed by Frank Arntzenius, but it differs in the significance that it assigns to potential regrets. I maintain, contrary to Arntzenius, that an agent facing Egan’s decisions can rationally choose actions that she knows she will later regret. All rationality demands of agents it that they maximize unconditional causal expected utility from an epistemic perspective that accurately reflects all the available evidence about what their acts are likely to cause. This yields correct answers even in outlandish cases in which one is sure to regret whatever one does.

Do rational demand functions differ from irrational ones? Evidence from an induced budget experiment

Various studies (e.g. Becker, 1962; Ariely et al., 2003) have noted anomalies concerning the relationship between observed demand and the preferences presumed to motivate it. We re-examine these findings using experimental choice data. After separating our subjects’ choices into rational and irrational subsets based on consistency with the axioms of revealed preference, we estimate and compare demand coefficients. Mirroring Ariely et al.'s ‘coherently arbitrary’ choice, both rational and irrational demand estimates exhibit negative price and positive endowment coefficients. However, a comparison of the full set of demand coefficients indicates significant differences between the two, yielding an observable artefact of the preference hypothesis. Relaxing the goodness-of-fit of the revealed preference test (Afriat, 1987; Varian, 1994) does not alter our findings.

First-Personal Authority and the Normativity of Rationality

In “Vindicating the Normativity of Rationality,” Nicholas Southwood proposes that rational requirements are best understood as demands of one’s “first-personal standpoint.” Southwood argues that this view can “explain the normativity or reason-giving force” of rationality by showing that they “are the kinds of thing that are, by their very nature, normative.” We argue that the proposal fails on three counts: First, we explain why demands of one’s first-personal standpoint cannot be both reason-giving and resemble requirements of rationality. Second, the proposal runs headlong into the now familiar “bootstrapping” objection that helped illuminate the need to vindicate the normativity of rationality in the first place. Lastly, even if Southwood is right—the demands of rationality just are the demands or our first-personal standpoints—the explanation as to why our standpoints generate reasons will entail that we sometimes have no reason at all to be rational.

Endogenous rationing, price dispersion and collusion in capacity constrained supergames

This paper examines the feasibility of collusion in capacity constrained duopoly supergames. In each period firms simultaneously set a price–quantity pair specifying the price for the period and the maximum quantity the firm is willing to sell at this price. Under price–quantity competition firms are able to ration their output below capacity. For a wide range of capacity pairs, the equilibrium path providing the smaller firm with its highest stationary perfect equilibrium payoff requires that it undercut its rival’s price and ration demand. Furthermore, for some capacities and discount factors supporting security level punishments, price shading and rationing arise everywhere on the set of stationary perfect equilibrium paths yielding (constrained) Pareto optimal payoffs. That is, price shading may not only be consistent with optimal collusion, it may be a requirement of optimal collusion.

Rationality and Commitment, edited by Fabienne Peter and Hans Bernhard Schmid.

Rationality and Commitment is a collection of papers focused on Amartya Sen’s constructive critique of the prevailing approach in rational choice theory. This approach accommodates self-interested behaviour, and even sympathy, but fails, according to Sen, to do justice to commitment. In cases of commitment, action is generated not by self-interest or by the sort of sympathy that ties an agent’s well-being to the well-being of others, but by a more principled accommodation of the goals of others. Such accommodation can, in Sen’s view, take either of the following forms: the agent may modify her goals so that they better accommodate others’ goals; or she may, in certain cases (perhaps in accordance with certain norms), allow someone else’s goal to constrain her pursuit of her own goals. Following the introduction by Peter and Schmid, which provides a helpful map of the book, Sen reviews his concerns about the narrow view of rationality captured by rational choice theory as it now stands. Sen’s basic point is that, so long as it fails to accommodate commitment, rational choice theory will not adequately ‘characteriz[e] the demands of rationality’ or explain ‘behavioral variations between different societies over time’ (p. 22). Furthermore, as Sen explains in both his opening and closing chapters to the book, understanding commitment involves recognizing the possibility of voluntarily imposed restraints, particularly in light of established norms of behaviour and sensitivity to the pursuits and goals of others.

Economic Theories of Emigration

This review of economic theories seeks to expand our understanding of the “pull and push” factors of emigration. It features political economy theories of rational choice, supply and demand, world system, and network. Rational choice theory helps to identify the personal and household considerations for emigration by weighing the costs and the benefits. Supply-and-demand theory takes into account the oversupply of labor as a strong push factor and the demand for labor in advanced industrial countries as a strong pull factor. World system theory focuses on the complex political and economic factors that lead to exploiting third-world countries and create a strong push to emigrate. Finally, network theory can be used to explain the dynamics of immigrant communities in both overseas countries and country of origin that can create a pull toward emigration. The review concludes with the implications of these economic theories for expanding our understanding of human behavior and social environment and international development.

Learning to live with voluntarism

This paper examines and finds wanting the arguments against van Fraassen’s voluntarism, the view that the only constraint of rationality is consistency. Foundationalists claim that if we have no grounds or rationale for a belief or rule, rationality demands that we suspend it. But that begs the question by assuming that there have to be grounds or a rationale. Instead of asking, why should we hold a basic belief or rule, the question has to be: why should not we be committed as we are? Within a system we can sometimes find internal reasons. But, short of assuming foundationalism from the outset, when it comes to our evolving system as a whole there are no grounds for abandoning the commitments that we experience so strongly. Along the way the paper develops a systematic way of talking about terms that cause confusion because of variation in usage: foundationalism, relativism, basic beliefs and rules, voluntarism, etc.

Rethinking rational addictive behaviour and demand for cinema: a study using Japanese panel data

In this article, I explore the extent to which the rational addiction model developed by Becker and Murphy (1988) can account for cinema attendance, using panel data from 47 Japanese prefectures for the years 1994–1998. Controlling for unobserved prefecture-specific fixed effects and an endogeneity bias of the lagged and lead-dependent variables (the volume of cinema attendance), by using a fixed effect two-stage least squares estimation, I find that people in Japan are likely to be addictive. This finding is contrary to that found in the United Kingdom (Cameron, 1999). Further results suggest that the younger the people are, the more video is a favoured substitute for the cinema. If other factors are equal, the past accumulated consumption of young people is, of course, smaller than that of older people. Hence, the addictive behaviour is more attenuated for younger people because of their lesser past consumption. The complementary effect of past consumption is more likely to outweigh the substitution effect of preferring video as people become older. These findings are in accord with the Becker and Murphy (1988) model of rational addiction.

Randolph Bourne’s Malcontents: Cultural Politics, Democratic Practice, and the Domestication of War, 1917–1918

Randolph Bourne was the leading intellectual critic of American participation in the First World War. Against the background of government repression, John Dewey and the pro‐war intellectuals of the New Republic dismissed anti‐war activists as unrealistic and blind to the progressive possibilities of the war. Bourne struggled to open a speaking position and theorise a viable political practice for anti‐war radicals amidst the collapse of the public sphere. Surviving the domestic embrace of total war required radicals to engage in ironic redescriptions of the social, to take up the position of ‘the malcontented’ and turn to the sphere of aesthetics to open and preserve democratic spaces of plasticity. For Bourne, it is not any single aesthetic that opens up political space. Instead, Bourne argued that criticism and aesthetic debate opened up spaces for becoming that exceeded the ability of the state to consume society and fully discipline subjects. Radical communities of aesthetic judgment provided a singular resource for resistance to the collapse of public space, the demands of instrumental rationality, and war itself.

Economic Theories of Disability Benefits

Within government social welfare policies and programs, disability has frequently been defined and addressed as an economic issue, linked to the ability (or inability) to work. This article comprises a brief review of literature concerned with economic theories related to disability, with a primary focus on public disability benefits. The explanatory theories of rational choice, supply and demand, and moral hazard are discussed in the context of disability benefits and the normative fields of welfare economics and social choice theory as they relate to disability. Finally, implications of the economic perspective for the analysis of human behavior and the social environment are identified.

DON'T FEAR THE REGRESS: COGNITIVE VALUES AND EPISTEMIC INFINITISM

We are rational creatures, in that we are beings on whom demands of rationality are appropriate. But by our rationality it doesn't follow that we always live up to those demands. In those cases, we fail to be rational (and it is appropriate to use the term ‘irrational’), but it is in a way that is different from how rocks, tadpoles, and gum fail to be rational. For them, we use the term ‘arational.’ They don't have the demands, but we do. The demands of rationality bear on us because we have minds that can move us to act, inspire us to create, and bring us to believe in ways that are responsible and directed. My interests here are the demands rationality places on our beliefs. Beliefs aim at the truth, and so one of the demands of being a rational creature with beliefs is that we manage them in a way that is pursuant of the truth. Reasons and reasoning play the primary role in that management – we ought to believe on the basis of good reasons. That is, if you believe something, you think that you're right about the world in some way or another. You believe because you think that something (call it ‘p’) is true. Now, p's truth is different from all ways it could be false, and your being right about p isn't just some arbitrary commitment, one that could just as well have been its negation. This non-arbitrary specificity of beliefs is constituted by the fact that they are held on the basis of reasons. Arguments are our model for how these reasons go – we offer some premises and show how they support a conclusion. Of course, arbitrary premises won't do, so you've got to have some reason for holding them as opposed to some others. Every premise, then, is a conclusion in need of an argument, and for arguments to be acceptable, we've got to do due diligence on the premises. This, however, leads to a disturbing pattern – for every premise we turn into a conclusion, we've got at least one other premise in need of another argument. Pretty soon, even the simplest arguments are going to get very, very complicated.

The Impact of a Firm's Payout Policy on Stock Prices and Shareholders' Wealth in an Inefficient Market

Recent literature has almost exclusively focused on the announcement effects of payout policy. However, in an inefficient stock market payout policy may not only affect stock prices at the announcement date but also at the payment date. Our theoretical approach is based on the rational demand of risk averse investors and passive investors holding shares in a firm which may or may not pay out free cash flow. The joint existence of both investor types in an inefficient market may lead to a positive impact at the payment date. We predict a positive effect for a share buyback and a dividend payment that is associated with reinvestment, e.g. via a dividend reinvestment plan (DRIP). This price impact affects shareholders' current and long run net wealth. Both buyback and divi-dend with DRIP cause a wealth transfer between smart and passive investors in the long run, with the direction of the wealth transfer depending on the level of the firm's market valuation relatively to expected future value.

Dewey and McDowell on Naturalism, Values, and Second Nature

Dewey and McDowell on Naturalism, Values, and Second Nature Jennifer Welchman John Dewey and John McDowell agree in rejecting twentieth-century noncognitivist theories of value from a common discontent with the legacies of modern philosophical thought that underpin them. But they disagree about the best way to defend the status of values and of practical reason. Dewey champions a pragmatic, naturalistic account of values as characteristics of situations that meet our needs as biological and social beings, whereas McDowell rejects this on the grounds that it puts us on a slippery slope to reductive materialism and determinism. In what follows, I review their objections to noncognitivism and discuss the role that "second nature" plays in their respective reconstructions of value and its place in the world. I then take up McDowell's arguments against naturalizing second nature and values and conclude by offering one possible Deweyan response. Background Modern philosophy adopted a "disenchanted" view of nature, according to which nature is as the physical sciences depict it, containing only those properties and relations susceptible to the experimental methods those sciences employ. Values and secondary qualities were treated as projections of human subjectivity, spread upon a world where they have no real place. Both Dewey and McDowell reject this view, holding that the "disenchanted world" is better understood as a complex theoretical model that stands in for the real world in scientific inquiries—not to be identified with the actual world or its contents. Both see modern philosophy's misinterpretation of scientific models of the world as laying the groundwork for twentieth-century noncognitivisms. Once one accepts that view of reality, then human values can be "real" only to the extent that they can be explained in terms of the causal forces that the natural [End Page 50] sciences recognize. Attitudes and desires are features of human nature that fall within the purview of the natural sciences, so values are reinterpreted accordingly. But when we do this, both men argue, we leave practical reason without any significant role to play in human action, for our so-called reasons for action are merely organic events having no inherent cognitive significance. Say, for example, I have a certain attitude A toward cats. This gives me no reason to behave one way or another toward cats. As Dewey remarks, "Cats have claws and teeth and fur. They do not have implications. No physical thing has implications" (MW 8:77).1 Similarly if attitudes are organic events, they can have no implications for action unless or until they are interpreted in light of some conceptual scheme. Only if they have cognitive significance can they transfer that significance onto the world. Now a conceptual scheme is not just an idea; it is instead a kind of interpretative practice in virtue of which things in the world and our acts, attitudes, and desires take on significance and become reason giving. Practices are rule governed, but their rules do not conform to natural laws. Thus when we engage in practices of interpretation we operate in a Sellarsian "space of reasons" to which natural scientific laws do not directly apply. Or as McDowell puts it, it is to take on, and act from, a second nature.2 We acquire second natures through initiation into cultural practices, into the shared conceptual strategies that our cultures employ for ordering and evaluating inner and outer experience. As we acquire facility with these practices, especially language, we gain entry into that "space of reasons" in which persons uniquely operate. Both McDowell and Dewey assign special importance to language because it is both a tool and a conduit of enculturation, whose possession is essential to see and to appreciate the world as a culture's members are able to do. As McDowell puts it: "Moulding ethical character . . . is a particular case of a general phenomenon: initiation into conceptual capacities, which include responsiveness to other rational demands besides those of ethics. Such initiation is a normal part of what it is for a human being to come to maturity. . . . If we generalize from the way Aristotle conceives the moulding of ethical character, we arrive at the notion of having one's eyes opened to reason...