Organisational citizenship behaviour towards the environment (OCBE) aids in both environmental protection and in harnessing sustainable competitive organisational advantage. This study proposed a conceptual research model which investigated managerial perceptions of the relationship between OCBE and economic cost performance (ECP) in the UAE hospitality sector, with green innovative behaviour (GIB) mediating and green training moderating the relationship. Drawing on the theory of planned behaviour and abilities motivation opportunity theory, the study administered 479 structured questionnaires to hotel managers in the (...) UAE using purposive and snowball sampling techniques. Partial least squares structural equation modelling was applied to test the hypotheses in SmartPLS3.3. Findings showed that OCBE had a direct and significant impact on ECP, with GIB emerging both as a direct and mediating predictor. Additionally, green training directly and significantly moderated the OCBE–cost performance relationship. These results evince the integration of sustainable philosophies with innovative mindsets to encourage green innovative endeavours among hotel managers. (shrink)

_The serpent of corruption slithers through societies, injecting its venom into the veins of economies, constricting growth, and poisoning trust. This article delves into the labyrinthine terrain of corruption's economic effects, unraveling the intertwined threads of reduced efficiency, distorted markets, and undermined development. By navigating this labyrinth, we illuminate the hidden costs of graft and explore potential remedies for safeguarding economic health and fostering ethical prosperity. Charting a course towards a future free from corruption's corrosive touch requires (...) a nuanced understanding of its economic consequences, unwavering commitment to transparency, and robust institutional reforms._. (shrink)

The literature on pluralism in economics has focused on the benefits expected from the plurality of theories, methods, and frameworks. This overlooks half of the picture: the costs. Neither have the multifarious costs been systematically analyzed in philosophy of science. We begin rectifying this neglect. We discuss how the benefits of plurality and diversity in science presuppose distinct types of plurality and how various benefit and plurality types are associated with different types of costs. Finally, we ponder (...) how the general mechanisms that give rise to the costs of plurality and diversity are aggravated by various disciplinary characteristics of economics. (shrink)

Cost-benefit analysis is a widely used governmental evaluation tool, though academics remain skeptical. This volume gathers prominent contributors from law, economics, and philosophy for discussion of cost-benefit analysis, specifically its moral foundations, applications and limitations. This new scholarly debate includes not only economists, but also contributors from philosophy, cognitive psychology, legal studies, and public policy who can further illuminate the justification and moral implications of this method and specify alternative measures. These articles originally appeared in the Journal of Legal Studies. (...) Contributors: - Matthew D. Adler - Gary S. Becker - John Broome - Robert H. Frank - Robert W. Hahn - Lewis A. Kornhauser - Martha C. Nussbaum - Eric A. Posner - Richard A. Posner - Henry S. Richardson - Amartya Sen - Cass R. Sunstein - W. Kip Viscusi. (shrink)

Climate change economists have called it “the most important number you’ve never heard of” and the “holy grail of climate economic analysis.” It is the social cost of carbon (SCC), and its purpose is to reflect—in one dollar figure—the harm caused by emitting a single ton of carbon dioxide into the atmosphere. The SCC is an essential concept for environmental cost-benefit analysis, and for the idea of an “optimal tax” on carbon emissions. It is also the subject of fierce (...) debate in the academic literature and in American politics. This book offers the most systematic analysis yet of the social cost of carbon, its theoretical basis, and its proper role in climate economics and climate policy design. It explains that the SCC is not one concept but four, each of which is addressed to a distinct task in climate economics. Moreover, these four concepts can be sorted into two families that correspond to the two main branches of welfare economics, social choice theory and general equilibrium theory. The book explains these radically different theoretical frameworks and how a mathematically identical pair of SCC concepts can emerge from each. It then argues that the analytical power of each SCC concept is limited by its inability to capture the full array of ethical considerations that bear on responsible climate policy. Despite these limitations, the book explains how at least some SCC concepts can and should be put to work in real-world climate change policy analysis. (shrink)

Conflicts have arisen between communities and operators of confined animal feeding as farms have become bigger in order to maintain their competitiveness. These conflicts have been difficult to resolve because measuring and allocating the benefits and costs of livestock production is difficult. This papers demonstrates a policy tool for promoting compromise whereby the community gets reduced negative impacts from livestock while at the same time continues to benefit from livestock jobs, taxes, and related economic activity. Public economic (...) benefits and public economic costs of confined animal feeding operations are estimated for every farm and affected house in Craven County, North Carolina. The results show public economic benefits of $5.7 million and public economic costs of $2.2 million, but that the ratio of benefits to costs for individual farm-house pairs varies in important ways across the 26 hog farms in Craven County. (shrink)

Stakeholder scholars have long explored how stakeholder relationships differ from economic transactions. We contribute to this ongoing inquiry by developing a conceptual framework of relationality in stakeholder theory that encompasses a stakeholder-theoretic extension of Williamson's contracting schema and a new typology of stakeholder relationships. Premised on understanding relationality as the need for informal human relationships beyond formal governance, our framework locates the key difference between transaction cost economics and stakeholder theory in their treatment of informal relationships. While transaction cost (...) economics perceives informal relationships to be shaped by formal governance structures and enforced by contractual safeguards, stakeholder theory is open to the possibility that some informal relationships between stakeholders may be genuinely moral and thus irreducible to formal governance and contractual safeguards. These stakeholder relationships may lead to unique economic effects described by instrumental stakeholder theory. The difference that we identified between the two literatures shows how stakeholder theory's embrace of relationality surpasses that of transaction cost economics. (shrink)

In this paper I argue that problems connected to good scientific practice and scientific misconduct can be fruitfully analyzed via the means of transaction costs economics. Thus, transaction costs economics is a valuable tool for the descriptive as well as normative analysis of science. I further argue that current institutional matrices impose high transaction costs on (potential) funding agencies of scientific research. This underlies many cases of bad practice in scientific research. Lowering these transaction costs would (...) have positive effects both on the adherence of researchers to the rules of good practice as well as for the amount of funding that is spend on research. In the end, I propose an institutional reform that promises to lower these transaction costs based upon an idea of Michael Rosenblatt. (shrink)

The question of how to allocate scarce medical resources has become an important public policy issue in recent decades. Cost-Utility Analysis is the most commonly used method for determining the allocation of these resources, but this book counters the argument that overcoming its inherent imbalances is simply a question of implementing methodological changes. The Economics of Resource-Allocation in Healthcare represents the first comprehensive analysis of equity weighting in health care resource allocation that offers a fundamental critique of its basic framework. (...) It offers a heterodox account of health economics, putting the discourse on economic evaluation into it broader socio-political context. Such an approach broadens the debate on fairness in health economics and ties it in with deeper rooted problems in moral philosophy. Ultimately, this interdisciplinary study calls for the adoption of a fundamentally different paradigm to address the distribution of scarce medical resources. This book will be of interest to policy makers, health care professionals or Post-Graduate students looking to broaden their understanding of the economics of the healthcare system. (shrink)

As the transaction cost theory of the firm was taking shape in the 1970s, another important movement in economics was emerging: a revival of the ‘Austrian’ tradition in economic theory associated with such economists as Ludwig von Mises and F. A. Hayek . As Oliver Williamson has pointed out, Austrian economics is among the diverse sources for transaction cost economics. In particular, Williamson frequently cites Hayek , particularly Hayek’s emphasis on adaptation as a key problem of economic organisation (...) . Following Williamson’s lead, a reference to Hayek’s ‘The Use of Knowledge in Society’ has become almost mandatory in discussions of economic organisation . However, there are many other potential links between Austrian and transaction cost economics that have not been explored closely and exploited.This article argues that characteristically Austrian ideas about property, entrepreneurship, economic calculation, tacit knowledge, and the temporal structure of capital have important implications for theories of economic organisation, transaction cost economics in particular. Austrian economists have not, however, devoted substantial attention to the theory of the firm, preferring to focus on business-cycle theory, welfare economics, political economy, comparative economic systems, and other areas. Until recently the theory of the firm was an almost completely neglected area in Austrian economics, but over the last decade, a small Austrian literature on the firm has emerged. While these works cover a wide variety of theoretical and applied topics, their authors share the view that Austrian insights have something to offer students of firm organisation. (shrink)

An offshoot of decision analysis, risk-cost-benefit analysis (RCBA) dominates US policymaking regarding science and technology. In this paper a central normative presupposition of RCBA, called "the linearity assumption" is argued against. This is that there is a linear relationship between the actual probability of fatality and the value of avoiding a social risk or the cost of a social risk. The main object of this essay is to show that the presuppositions underlying the linearity assumption are highly questionable. It is (...) maintained that assessors ought to give more consideration to broadening their interpretations of "unit cost" and "societal risk" and to abandoning their claims about linearity. (shrink)

This article was championed in view of the notion of (perceived) economic rationalisation which seem to be the foremost of patients' care in the NHS as opposed to addressing distress to their existing well-being, while in a state of being tormented with agonising news of prolonged ill health. Serious consideration is given to addressing the need to rationalise resources in ensuring the long standing history of the NHS' free health care is critically addressed, but not in a way that (...) destroys confidence on the ability of professionals to manifest ethical prudence in their acts of judgments about whether patients' care is to be imminent or prolonged on a waiting list. There is certainly serious impacts to be comprehended with in situations of economic rationality through services provided by the NHS, but it is believed that tangible outcomes about definitive care for patients should be addressed collaboratively. (shrink)

From a giant of health care policy, an engaging and enlightening account of why American health care is so expensive -- and why it doesn't have to be. Uwe Reinhardt was a towering figure and moral conscience of health care policy in the United States and beyond. Famously bipartisan, he advised presidents and Congress on health reform and originated central features of the Affordable Care Act. In Priced Out, Reinhardt offers an engaging and enlightening account of today's U.S. health care (...) system, explaining why it costs so much more and delivers so much less than the systems of every other advanced country, why this situation is morally indefensible, and how we might improve it. The problem, Reinhardt says, is not one of economics but of social ethics. There is no American political consensus on a fundamental question other countries settled long ago: to what extent should we be our brothers' and sisters' keepers when it comes to health care? Drawing on the best evidence, he guides readers through the chaotic, secretive, and inefficient way America finances health care, and he offers a penetrating ethical analysis of recent reform proposals. At this point, he argues, the United States appears to have three stark choices: the government can make the rich help pay for the health care of the poor, ration care by income, or control costs. Reinhardt proposes an alternative path: that by age 26 all Americans must choose either to join an insurance arrangement with community-rated premiums, or take a chance on being uninsured or relying on a health insurance market that charges premiums based on health status. An incisive look at the American health care system, Priced Out dispels the confusion, ignorance, myths, and misinformation that hinder effective reform. (shrink)

Decision-making regarding healthcare expenditure hinges heavily on an individual's health status and the certainty about the future. This study uses data on propensity of general health exam (GHE) spending to show that despite the debate on the necessity of GHE, its objective is clear—to obtain more information and certainty about one’s health so as to minimise future risks. Most studies on this topic, however, focus only on factors associated with GHE uptake and overlook the shifts in behaviours and attitudes regarding (...) different levels of cost. To fill the gap, this study analyses a dataset of 2068 subjects collected from Hanoi (Vietnam) and its vicinities using the baseline-category logit method. We evaluate the sensitivity of Vietnamese healthcare consumers against two groups of factors (demographic and socioeconomic-cognitive) regarding payment for periodic GHE, which is not covered by insurance. Our study shows that uninsured, married and employed individuals are less sensitive to cost than their counterparts because they value the information in reducing future health uncertainty. The empirical results challenge the objections to periodic health screening by highlighting its utility. The relevance of behavioural economics is further highlighted through a look at the bounded rationality of healthcare consumers and private insurance companies in using and providing the service, respectively. (shrink)

This article provides an ISCT analysis of commercial bribery focused on transaction cost economics. In the language of Antitrust, commercial bribery is a form of vertical arrangement subject to the same efficiency analysis that has found other vertical arrangements potentially beneficial to consumers. My analysis shows that actions condemned as commerical bribery in the Honda case may well have benefited Honda's dealer network once promotional free riding and other forms of rent seeking by dealers are considered. I propose that the (...) term "commercial bribery" should be avoided until after an ISCT analysis shows that the community is likely to have been harmed. The term "third-party payments" is a more ethically neutral term with which to begin the analysis. (shrink)

Since the last ice age, when ice enveloped most of the northern continents, the earth has warmed by about five degrees. Within a century, it is likely to warm by another four or five. This revolution in our climate will have immense and mostly harmful effects on the lives of people not yet born. We are inflicting this harm on our descendants by dumping greenhouse gases into the atmosphere. We can mitigate the harm a little by taking measures to control (...) our emissions of these gases, and to adapt to the changes by, for instance, building sea walls around coastlines threatened by rising sea levels. But these measures will be very expensive, and the costs will be born by us, the present generation, whereas the benefits will come to future generations. How much should we sacrifice for the sake of the future? Economists and philosophers have independently worked on the question of our responsibility to future generations. This book brings their work together and applies it to global warming. It suggests a programme for future research on the economic and ethical issues. The book is intended for economists, and for philosophers and other social scientists who have a little knowledge of economic methods. (shrink)

ABSTRACT Coase's now famous paper, ‘The Problem of Social Cost’, argues that social harms caused by industry are best addressed through a policy which would be optimal in terms of market efficiency. I argue that this narrowly based policy represents a classic example of the failure of many welfare economists to consider adequately the ethical implications of their recommendations. I also indicate the manner in which Coase's recommendations conflict with intuitively well‐established ethical principles. I conclude that only an approach that (...) considers many more features than market efficiency can produce an optimal policy for dealing with the social costs of production. (shrink)

This paper critically engages the legal and political framework for responding to democracy and rule of law backsliding in the EU. I develop a new and original critique of Article 7 TEU based on it being democratically illegitimate and normatively incoherent qua itself in conflict with EU fundamental values. Other more incremental and scaleable responses are desirable, and the paper moves on to assess the legitimacy of economic sanctions such as tying access to EU funds to performance on democratic (...) and rule of law indicators or imposing fines on backsliding states. I hold such sanctions to be a priori legitimate, and argue that in some cases economic sanctions are even normatively required, given that EU material support of backsliding member states can amount to material complicity in their backsliding. However, an economic conditionality mechanism would need to be designed to minimize unjust and counterproductive effects. One way to pursue this could be to complement sanctions against the backsliding government with investment for prodemocratic actors in that state. (shrink)

The approach to controlling greenhouse gas emissions suggested by simple neoclassical economic models has appeared in prominent mainstream journals. This entails weighing up the costs of control compared to the benefits of avoiding damages due to global climate change. This paper presents a critique of extending the microeconomic project based methodology to a complex global problem; raising issues of uncertainty and ignorance. An alternative to simple utilitarianism is seen to be necessary and the potential of a deontological approach (...) is argued to be greater with regard to policy decisions concerning future generations. (shrink)

Contemporary cost containment measures ignore patients' need for privacy, destroy long-term doctor-patient relationships, and demand ethical and standard of care compromises.Economic considerations have distracted the physician and he/she no longer focuses primarily on the patient's welfare. The superficiality of the doctor-patient relationship and the cost-cutting efforts have jointly contributed to the deterioration of the quality of medical care.

Economics takes an individualistic approach to human behaviour. This is reflected in the use of ‘contingent valuation’ surveys to conduct cost benefit analysis for economic policy evaluation. An individual's valuation of a policy is assumed to be unaffected by the burdens it places on others. We report a survey experiment to test this supposition in the context of climate change policy. Willingness to pay for climate change mitigation was higher when richer individuals were to bear higher costs than (...) when, as is usual, no explicit information was provided about cost distribution. This result is inconsistent with the usual interpretation of contingent valuation data. It also suggests that the data may be biased indicators of policy acceptance. Additional survey questions suggest that a collective mode of reasoning is common. (shrink)

Many economic theorists hold that social institutions can lead otherwise irrational agents to approximate the predictions of traditional rational choice theory. But there is little consensus on how institutions do so. I defend an economic internalist account of the institution-actor relationship by explaining economic rationality as a feature of individuals whose decision-making is aided by institutional structures. This approach, known as the subjective transaction costs theory, represents apparently irrational behavior as a rational response to high subjective (...) transaction costs of thinking and deciding. The theory has two attractive features. First, it reconciles rational choice theory with the increasing body of evidence cataloguing putative errors in economic decision-making. Second, it vindicates the explanatory power of individual choice against externalist challenges; the subjective transaction costs theory keeps economic rationality in the head. (shrink)

This paper discusses the ethical implications of racism and some of the various costs associated with racism occurring at the institutional level. We argue that, in many ways, the laws, social structures, and institutions in Western society have operated to perpetuate the continuation of historical legacies of racial inequities with or without the intention of individuals and groups in society. By merely maintaining existing structures, laws, and social norms, society can impose social, economic, and health costs on (...) racial minorities that impinge on their well-being and human dignity. Based on a review of multidisciplinary research on racism, particularly focusing on healthcare, we demonstrate how institutional racism leads to social and economic inequalities in society. By positing institutional racism as the inherent cause of avoidable disparities in healthcare, this paper draws attention to the ethical significance of racism, which remains a relatively neglected issue in bioethics research. (shrink)

Whether corporate strategic Environmental, Social, and Governance (ESG) disclosure can be effectively screened by external markets still needs more empirical support. Despite numerous studies confirming the positive impact of ESG, the issue of strategic ESG disclosure has yet to receive sufficient attention. This study examines the impact of ESG greenwashing on the cost of debt financing and stock returns using panel data of Chinese A-share listed corporates from 2012 to 2021. The study finds that external markets fail to recognize ESG (...) greenwashing in the short term, leading to a temporary reduction in the cost of debt financing and an increase in stock returns, but these effects are not lasting. Mechanism analysis shows that ESG greenwashing enhances corporate reputation and reduces the cost of debt financing through the reputation effect, stimulates investor sentiment, and improves stock returns through the sentiment effect. The study identifies management myopia, excessive power, financial distress, and information asymmetry as the main drivers. However, strong oversight by independent directors, involvement of Big Four audit firms, investor site visits, and high industry competition can mitigate these misleading effects. This research expands the understanding of the causes and economic consequences of corporate ESG greenwashing and provides empirical evidence for managing this phenomenon. (shrink)

This paper discusses the practice of cost-benefit analyses of transportation infrastructure investment projects from the meta-theoretical perspective of critical realism. Such analyses are based on a number of untenable ontological assumptions about social value, human nature and the natural environment. In addition, main input data are based on transport modelling analyses based on a misleading `local ontology' among the model makers. The ontological misconceptions translate into erroneous epistemological assumptions about the possibility of precise predictions and the validity of willingness-to-pay investigations. (...) Accepting the ontological and epistemological assumptions of cost-benefit analysis involves an implicit acceptance of the ethical and political values favoured by these assumptions. Cost-benefit analyses of transportation investment projects tend to neglect long-term environmental consequences and needs among population groups with a low ability to pay. Instead of cost-benefit analyses, impact analyses evaluating the likely effects of project alternatives against a wide range of societal goals is recommended, with quantification and economic valorisation only for impact categories where this can be done in an ontologically and epistemologically defensible way. (shrink)

This book is a comprehensive account of what it means to try to quantify health in distributing resources for health care. It examines the concept of QALYs which supposedly makes it more accurate to talk about life in terms of both quality and quantity of years lived when referring to health care policy. It offers an elegant new approach to comparing the costs and benefits of medical interventions. Cost-Utility Analysis is a method designed by economists to aid decision makers (...) distribute scarce resources to areas of health care where they will yield the greatest benefits. Erik Nord questions the feasibility of measuring patients' quality of life meaningfully in numerical terms, as CUA presupposes. He presents an alternative approach called cost-value analysis in which representative samples of the general public express preferences between different health-care programs. In this approach, subjects are allowed to include concerns for fairness that go beyond concerns for efficiency of conventional health economics. (shrink)

Economics plays a key role in human rights issues as decision-makers weigh the incentives associated with choosing how to use scarce resources in the context of committing or escaping human rights violence. This textbook provides an introduction to the microeconomic analysis of human rights utilizing economics as a lens through which to examine social topics including capital punishment, violence against women, asylum seeking, terrorism, child abuse, genocide, and hate. Whether analyzing the decisions made in capital punishment cases, the causes and (...) consequences of genocide, or the impact of terrorist acts on domestic and international decision-making, the science of economics provides tools and a systematic method of analysis and policy recommendation. This key text presents a method for integrating the social sciences of economics and human rights to create new opportunities for the investigation of social issues. Within each chapter, readers gain a fundamental understanding of a specific human rights issue, the decision-makers and the decision-making process involved, and the benefits and costs leading to the decisions. Experts on each issue, drawn from a variety of fields, contribute to each chapter and present first-hand accounts and different perspectives on each issue. The detailed analyses and accounts provided also explore the potential incentives involved in the prevention and termination of human rights violations. Aiming to further economic inquiry and enhance interdisciplinary research, this textbook serves as a multi-purpose guide for a range of readers. Students, researchers, and educators, as well as those working in organizations supporting victims of human rights violations and policy-makers facing human rights challenges, will find this book informative and engaging. (shrink)

Cost-effectiveness analysis for health interventions is traditionally conducted in a risk-neutral way, insensitive to risk attitudes in the population, which are potentially non-neutral. While the standard outcome metric of quality-adjusted life years (QALYs) aims to be deferential to people's valuations of health states, cost-effectiveness analysis of risky interventions using the QALY metric is not similarly deferential to people's risk attitudes. I argue that there is no good justification for this practice. Non-neutral attitudes to risk, especially where they concern individually life-changing (...) interventions need not be irrational, and so imposing neutrality is not justifiable as a way of debiasing preferences. Many common justifications for deference to health state preferences extend to risk attitudes. But even if reasons for deference do not extend, imposition of risk neutrality as opposed to any other rationally permissible risk attitude is under-motivated as default practice. Thus, either methods for measuring risk attitudes separately and incorporating them into cost-effectiveness analysis should be used more widely or a richer set of information should be presented to political decision-makers and the public to enable them to decide how to take into account the individual risks faced by members of the population, on top of aggregate effects on population health. (shrink)

Members of societies involved in an intractable conflict usually consider costs that stem from the continuation of the conflict as unavoidable and even justify for their collective existence. This perception is well-anchored in widely shared conflict-supporting narratives that motivate them to avoid information that challenges their views about the conflict. However, since providing information about such major costs as a method for moderating conflict-related views has not been receiving much attention, in this research, we explore this venue. We (...) examine what kind of costs, and under what conditions, exposure to major costs of a conflict affects openness to information and conciliatory attitudes among Israeli Jews in the context of the intractable Israeli–Palestinian conflict. Study 1 revealed that interventions based on messages providing information on mental health cost, economic cost, and cost of the conflict to Israeli democracy had no significant effect on perceptions of the participants of these prices, openness to new information about the conflict, or support for conciliatory policies. However, the existing perceptions that participants had about the cost of the conflict to Israeli democracy were positively associated with openness to alternative information about the conflict and support for conciliatory policies. Therefore, in Study 2, we tested whether providing information about future potential costs to the two fundamental characteristics of Israel, a democracy or a Jewish state, created by the continuation of the conflict, will induce attitude change regarding the conflict. The results indicate that information on the future cost to the democratic identity of Israel significantly affected the attitude of the participants regarding the conflict, while the effect was moderated by the level of religiosity. For secular participants, this manipulation created more openness to alternative information about the conflict and increased support for conciliatory policies, but for religious participants, it backfired. We discuss implications for the role of information about losses and the relationship between religiosity and attitudes regarding democracy and conflict. (shrink)

In recent years, copyright governance for short videos has become a hot issue of common concern in the academic community and the industry. Therefore, this study intends to explore the economic aspect of copyright governance in relation to the proliferation of infringing short videos. The short video industry of China has been taken as a case to demonstrate the copyright governance issue. Transaction cost theory has been applied to analyze the economic aspect of copyright governance in terms of (...) four dimensions: bounded rationality, opportunism, environmental uncertainty, and asset specificity. From the perspective of transaction cost economics, the problem of short video infringement is observed to be essentially a market failure due to high transaction costs. In the short video market, substantial transaction costs are incurred in the legal transaction of copyright with these costs considered to be too high. This is especially the case when transaction costs exceed the net proceeds initially expected by short video users from the authorization, making it impossible to carry out the transaction and leading to infringement. To effectively control the copyright infringement of short videos, it is necessary to build a cross-platform information-sharing mechanism to reduce search costs, establish a unified copyright management platform to reduce coordination costs, and give full attention to the role of technical support to reduce regulatory costs. (shrink)

Emerging technologies are, by definition, full of surprises: developments that we cannot fully anticipate and that might have some bad outcomes as well as good ones. This presents a challenge for anyone trying to make forward‐looking policy decisions, including those who apply benefit‐cost analysis. BCA is now widely known and used, but it is also widely misunderstood—by many of its advocates as well as its detractors. In this essay, I will begin by examining some of the strengths and weaknesses of (...) BCA as a normative science. Yes, “normative science” is an oxymoron, and the incongruity it speaks to is a source of much of the controversy; BCA is an imperfect answer, but often the best available answer, to the question of how a society should go about making collective but not unanimous choices.I also want to take a hard look at the question of what we are evaluating. BCA is designed to weigh government actions, to see whether they are in the public interest; it is not designed to evaluate private actions. But if the government action is to approve a private action that otherwise would be prohibited, then the BCA inevitably must evaluate the latter. From the perspective of a government regulator, it is very tempting to shift the burden of proof onto private innovators—to obligate them to seek permission to proceed, and to demonstrate that their proposed actions have acceptable risks and will produce a net social benefit. But such burden‐shifting is not merely an administrative convenience; it has serious economic consequences that need to be examined. (shrink)

Business and Economic textbooks warn against committing the Sunk Cost Fallacy: you, rationally, shouldn't let unrecoverable costs influence your current decisions. In this paper, I argue that this isn't, in general, correct. Sometimes it's perfectly reasonable to wish to carry on with a project because of the resources you've already sunk into it. The reason? Given that we're social creatures, it's not unreasonable to care about wanting to act in such a way so that a plausible story can (...) be told about you according to which your diachronic behavior doesn't reveal that you've suffered, what I will call, diachronic misfortune. Acting so as to hide that you've suffered diachronic misfortune involves striving to make yourself easily understood while disguising any shortcomings that might damage your reputation as a desirable teammate. And making yourself easily understood to others while hiding your flaws will, sometimes, put pressure on you to honor sunk costs. (shrink)

Law, Economics, and Morality examines the possibility of combining economic methodology and deontological morality through explicit and direct incorporation of moral constraints into economic models. Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liberties, truth-telling, and promise-keeping over the promotion of (...) good outcomes. It holds that there are constraints on promoting the good. Such constraints may be overridden only if enough good is at stake. While moderate deontology conforms to prevailing moral intuitions and legal doctrines, it is arguably lacking in methodological rigor and precision. Eyal Zamir and Barak Medina argue that the normative flaws of economic analysis can be rectified without relinquishing its methodological advantages and that moral constraints can be formalized so as to make their analysis more rigorous. They discuss various substantive and methodological choices involved in modeling deontological constraints. Zamir and Medina propose to determine the permissibility of any act or rule infringing a deontological constraint by means of mathematical threshold functions. Law, Economics, and Morality presents the general structure of threshold functions, analyzes their elements and addresses possible objections to this proposal. It then illustrates the implementation of constrained CBA in several legal fields, including contract law, freedom of speech, antidiscrimination law, the fight against terrorism, and legal paternalism. (shrink)