Violations at the Reference Point of Discontinuity: Limitations of Prospect Theory and an Alternative Model of Risk Choices

The tilted S-shaped utility function proposed in Prospect Theory (PT) relied fundamentally on the geometrical notion that there is a discontinuity between gains and losses, and that individual preferences change relative to a reference point. This results in PT having three distinct parameters; concavity, convexity and the reference point represented as a disjoint between the concavity and convexity sections of the curve. The objective of this paper is to examine the geometrical violations of PT at the zero point of reference. This qualitative study adopted a theoretical review of PT and Markowitz’s triply inflected value function concept to unravel methodological assumptions which were not fully addressed by either PT or cumulative PT. Our findings suggest a need to account for continuity and to resolve this violation of PT at the reference point. In so doing, an alternative preference transition theory, was proposed as a solution that includes a phase change space to cojoin these three separate parameters into one continuous nonlinear model. This novel conceptual model adds new knowledge of risk and uncertainty in decision making. Through a better understanding of an individual’s reference point in decision making behaviour, we add to contemporary debate by complementing empirical studies and harmonizing research in this field. Doi: 10.28991/ESJ-2022-06-01-03 Full Text: PDF

Menilik Perkembangan Tafsir Feminis di Indonesia Ala Thomas Kuhn

This study aims to discuss the development of feminist interpretation in Indonesia through the existence of Husein Muhammad's thoughts. This research method is qualitative through literature study with the theory of the scientific revolution initiated by Thomas Kuhn through an interpretation approach. The results and discussion of this research include a discussion of Thomas Kuhn's paradigm transition, the dynamics of feminist interpretation in Indonesia, the discourse of feminist interpretation in Indonesia according to Thomas Kuhn's paradigm transition theory, and Husein Muhammad's feminist interpretation. This study concludes that Thomas Kuhn's paradigm shift is used in interpreting feminist topics in Indonesia, which have undergone a paradigmatic transition at various levels. Tafsir Al-Qur'an Indonesia has undergone a paradigmatic transition in the classical, modern, and contemporary era. One of the commentators whose work was mapped out this time was Husein Muhammad who was in the neo-modern or contemporary era. This research is expected to have significant benefits for fans of the study of the Al-Qur'an and gender. This research only raises issues related to one feminist commentator. Then, this study recommends that in the future a more up-to-date understanding of the role of feminist commentators can be generated through a comprehensive study of western thoughts that refers to the literature on the interpretation of the Al-Qur'an in particular.

U.S. - China: “Power Transition” and the Outlines of “Conflict Bipolarity”

This article focuses on the phenomenon of global rivalry between China and the United States in terms of power transition theory, which is scientifically new and relevant due to the increased attention to the so-called Thucydides trap, in which, as some experts claim, both states have fallen. This paper presents a different vision of the global rivalry for leadership in the shaping of a new world order, which has already taken the form of overt non-violent confrontation and manifests itself in technological and trade wars as well as scientific and cultural rivalries. Nevertheless, despite the non-violent nature of the rivalry, this process is followed by an increase in the military capabilities of states, mainly projected in the basins of the Pacific and Indian Oceans (Indo-Pacific region). The methodological basis of the paper is power transition theory, which has been developed over the past 60 years by A.F. Organsky, J. Kugler, D. Lemke, R. Tammen and other researchers, united in the TransResearch Consortium. The authors argue that the analytical prism of this theory is more relevant to the analysis of current global rivalry than the classical neorealist balance of power approach. Through the prism of the theory the issues of rebalancing the global system of economic governance are analyzed. Also, a comparative analysis of the US-Japanese and US-Chinese trade and technological wars is carried out. Both the military and aggregate capabilities of two countries on a global scale and in the Indo-Pacific region are examined. The conclusion contains findings and comments on the impact of U.S. - China rivalry on the system of international relations.

Old frauds with a new sauce: digital assets and space transition

Purpose The purpose of this study is to describe the evolution of fraud schemes with historically conducted with fiat money in physical space to the crypto-assets in digital space as follows: ransomware, price manipulation, pump and dump schemes, misrepresentation, spoofing and Ponzi Schemes. To explain how fraud schemes have evolved alongside digital asset markets, this study applies the space transition theory. Design/methodology/approach The methodology used is a review of the media regarding six digital asset fraud schemes that have evolved from physical space to virtual space that are currently operational, as well as a review of the literature regarding the space transition theory. Findings This paper finds that the digital space and digital assets may facilitate pseudonymous criminal behavior in the present regulatory environment. Research limitations/implications The field is rapidly evolving, however this study finds that the conversion from physical to virtual space obfuscates the criminal activity, facilitating anonymity of the perpetrators, and creating new challenges for the legal and regulatory environment. Practical implications This paper finds that the digital space and digital assets may facilitate pseudonymous criminal behavior in the present regulatory environment. An understanding of the six crypto-asset fraud schemes described in the paper is useful for anti-financial crime professionals and regulators focusing on deterrence. Social implications The space transition theory offers an explanation for why digital space leads criminals to be better positioned to conduct financial crime in virtual space relative to physical space. This offers insights into behavior of digital asset fraudster behavior that could help limit the social damage caused by crypto-asset fraud. Originality/value To the authors’ knowledge, this paper is the first to detail the evolution of fraud schemes with fiat money in physical space to their corresponding schemes with digital assets in physical space. This study is also the first to integrate the space transition theory into an analysis of digital asset fraud schemes.

Differential model of friction based on bristle model and phase-transition theory

For high-precision position and angle control in robots, it is essential to compensate for the hysteretic behaviour caused by friction when the motion direction is reversed. An accurate friction model which is suitable for control system analysis and implementation is highly desirable. A differential model is proposed in the current paper for the modelling of hysteresis effects caused by friction phenomena. The model is constructed by employing a phenomenological phase-transition theory to mimic the friction mechanism. The bristle friction mechanism is adapted. The switching between static and dynamic friction is regarded as a reversible phase-transition phenomenon, which could be characterized by the local minima of a non-convex potential energy function. The Stribeck effect and the hysteretic relation between friction and velocity are modelled by a nonlinear ordinary differential equation. The comparison of the numerical simulation results and existing experimental friction data are presented. It is illustrated that the friction hysteresis loops are well captured, the capability of the proposed model is verified.

Leadership Transition

This chapter addresses the transition of leadership authority. This event occurs after an empowered leader’s assignment comes to an end. Leadership transition starts with a reflection and decision on the compatibility of the role’s conditions with the empowered leader’s actual behavior. In addition, internal and external contingencies are taken into account to decide on the continuation, change, or termination of the empowered leader’s assignment. Finally, to improve future leader selection and empowerment, a decision is made to abandon, change, or continue the criteria for leader selection in similar situations. The chapter is framed through transition theory and uses the morphogenetic cycle to explain the decision-making processes. The chapter ends with a model on leadership transition in balanced leadership.

Phase transitions in biology: from bird flocks to population dynamics

Phase transitions are an important and extensively studied concept in physics. The insights derived from understanding phase transitions in physics have recently and successfully been applied to a number of different phenomena in biological systems. Here, we provide a brief review of phase transitions and their role in explaining biological processes ranging from collective behaviour in animal flocks to neuronal firing. We also highlight a new and exciting area where phase transition theory is particularly applicable: population collapse and extinction. We discuss how phase transition theory can give insight into a range of extinction events such as population decline due to climate change or microbial responses to stressors such as antibiotic treatment.