scholarly journals A rationalist explanation of Russian risk-taking

2016 ◽  
Vol 11 (1) ◽  
Author(s):  
Frank Lehrbass ◽  
Valentin Weinhold
Keyword(s):  
Utility Function ◽  
Expected Utility ◽  
Risk Taking ◽  
Utility Maximization ◽  
Strictly Convex ◽  
Forward Market ◽  
Expected Utility Maximization ◽  
Russian Politics ◽  
Open Position

Three seemingly unrelated topics of Russian politics are investigated. It is shown that under expected utility maximization the assumptions of an unbiased oil forward market and a risk-acceptant attitude (strictly convex utility function) are sufficient to explain Russia’s open position in oil and the bailout of Rosneft. The risk-acceptant attitude of the Russian leader also causes a shrunken bargaining range for the conflict in Ukraine, which can be enlarged by sanctions but not necessarily by the proliferation of weapons. This gives sanctions a clear edge over the proliferation of weapons.

scholarly journals Sovereign risk management: A rationalist explanation of Putin’s and Trump’s risk taking behavior and its consequences

2017 ◽  
Vol 1 (2) ◽  
pp. 6-16 ◽  
Author(s):  
Frank Lehrbass
Keyword(s):  
Risk Taking ◽  
Corporate Leaders ◽  
Negotiated Settlement ◽  
Climate Action ◽  
War Finance ◽  
The Usa ◽  
Expected Utility Maximization ◽  
Trade War ◽  
Russian Politics ◽  
Open Position

It goes without saying that nowadays corporate leaders should perform their activity within the concept of sustainable development. The United Nations detail on their homepage (sustainabledevelopment.un.org) what this means. But corporate leaders sometimes face headwind from their governments. Therefore it is important to understand the reasons for such governmental decision making. Two prominent cases are the presidents of the USA and Russia. Firstly, two seemingly unrelated topics of Russian politics are investigated. It is shown that under expected utility maximization the assumptions of an unbiased oil forward market and a risk-acceptant attitude (strictly convex utility function) of president Putin are sufficient to explain Russia’s open position in oil and the bailout of Rosneft. Secondly, actions of president Trump are considered. Again, a risk-acceptant attitude is able to explain his campaign and to conform with his statements. Thirdly, international negotiations over Ukraine between two risk-acceptant presidents are considered. It is proven that the chances for a negotiated settlement have shrunken with the election of Trump and might now even be nil. Fourthly, a tentative outlook on international economics (trade war), finance (regulation) and politics (climate action) is performed.

scholarly journals Reasoning about social preferences with uncertain beliefs

2021 ◽  
Author(s):  
isaac davis ◽  
Ryan W. Carlson ◽  
Yarrow Dunham ◽  
Julian Jara-Ettinger
Keyword(s):  
Expected Utility ◽  
Utility Maximization ◽  
Social Preference ◽  
Social Preferences ◽  
Social Judgments ◽  
Social Agents ◽  
Preference Reasoning ◽  
The Face ◽  
Expected Utility Maximization ◽  
Social Uncertainty

We propose a computational model of social preference judgments that accounts for the degree of an agents’ uncertainty about the preferences of others. Underlying this model is the principle that, in the face of social uncertainty, people interpret social agents’ behavior under an assumption of expected utility maximization. We evaluate our model in two experiments which each test a different kind of social preference reasoning: predicting social choices given information about social preferences, and inferring social preferences after observing social choices. The results support our model and highlight how un- certainty influences our social judgments.

Specialist versus Generalist Decision Making

2018 ◽  
Author(s):  
Armin W. Schulz
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Utility Maximization ◽  
Decision Rules ◽  
Mental States ◽  
Vast Array ◽  
Expected Utility Maximization

A number of scholars argue that human and animal decision making, at least to the extent that it is driven by representational mental states, should be seen to be the result of the application of a vast array of highly specialized decision rules. By contrast, other scholars argue that we should see human and animal representational decision making as the result of the application of a handful general principles—such as expected utility maximization—to a number of specific instances. This chapter shows that, using the results of chapters 5 and 6, it becomes possible to move this dispute forwards: the account of the evolution of conative representational decision making defended in chapter 6 together with the account of the evolution of cognitive representational decision making defended in chapter 5, makes clear that both sides of this dispute contain important insights, and that it is possible to put this entire dispute on a clearer and more precise foundation. Specifically, I show that differentially general decision rules are differentially adaptive in different circumstances: certain particular circumstances favor specialized decision making, and certain other circumstances favor more generalist decision making.

Conclusion

2020 ◽  
pp. 248-250
Author(s):  
Paul Weirich
Keyword(s):  
Expected Utility ◽  
Utility Maximization ◽  
Risk Principle ◽  
Expected Utility Maximization ◽  
The Mean ◽  
Mean Risk

Recognizing that an act’s risk is a consequence of the act yields a version of expected-utility maximization that does not need adjustments for risk in addition to the probabilities and utilities of possible outcomes. This treatment of an act’s risk justifies the expected-utility principle, and the mean-risk principle, for evaluation of an act. Rational attitudes to risks explain the rationality of acting in accord with the principles. They ground the separability relations that support the principles. The expected-utility principle justifies a substantive, and not just a representational, version of the decision principle of expected-utility maximization. Consequently, the principle governs a single choice and not just sets of choices. It demands more than consistency of the choices in a set. It demands that each choice follow the agent’s preferences, and these preferences explain the rationality of a choice that complies with the principle.

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