Ethics, rationality and decision making

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Ethics, rationality and decision making

• Fred Wenstøp

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Matthew 12, 10-12

• And behold, there was a man which had his hand
  withered. And they asked him, saying, is it
  lawful to heal on the Sabbath days? that they
  might accuse him. And he said unto them, What man
  shall there be among you, that shall have one
  sheep, and if it fall into a pit on the Sabbath
  day, will he not lay hold on it, and lift it out?
  How much then is a man better than a sheep?
  Wherefore it is lawful to do good on the Sabbath
  days.

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Normative theories of decision making

• Teleological ethics
• Teleos goal
• Consequential ethics
• David Hume (1711-76)
• Utility theory
• Von Neumann, Morgenstern 40
• Keeney, Raiffa 1976
• Management by objectives
• The balanced scorecard

• Deontological ethics
• To deon duty
• Immanuel Kant (1724-1804)
• Rule based management
• Max Weber (1864-1920)

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Immanuel Kant (1724-1804)

• Duty based ethics
• Rational action cannot be based on a single
  individuals personal desires, but must be in
  accordance with something he can will to be a
  universal law
• Actions posses moral worth only when we do our
  duty for its own sake, not because of its
  consequences
• Kants categorical imperative
• Act only on that maxim through which you can at
  the same time will that it should become a moral
  law!

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Kantian rules

• Examples
• The United Nations Universal Declaration of
  Human Rights of 1948
• The rights are considered absolute regardless of
  their consequences.
• Kofy Annans Global Compact CSR-rules
• One rule bans child labour
• Kants deontological ethics is incompatible with
  the paradigm of decision making
• Amartya Sen
• Kant is difficult to defend as a general ethical
  principle because the consequences may be so
  great that they just cannot be overlooked

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Max Weber

• Rule base Management
• Basis
• Logic of appropriateness
• Obligation
• Identity
• Duty
• Survival of the fittest organizations
• Organizational learning through rule building

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Decisions sine ira et studio

• Weber
• a major social consequence of idealized
  bureaucratic control is a world without need for
  emotional decision-making
• The dominance of a spirit of formalistic
  impersonality, sine ira et studio, without hatred
  or passion, and hence without affection or
  enthusiasm. The dominant norms are concepts of
  straightforward duty without regard to personal
  considerations. Everyone is subject to formal
  equality of treatment that is, everyone is in
  the same empirical situation. This is the spirit
  in which the ideal official conducts his office.
  

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David Hume (1711-76)

• Reason cannot be the basis of morality
• Reason can show us the best way to achieve our
  ends, but it cannot determine our ultimate
  desires
• Tis not contrary to reason to choose my total
  ruin, to prevent the least uneasiness of an
  Indian
• Beliefs are formed through cause-effect analysis
• Humes law
• There is a gulf between facts and values, between
  is and ought
• Inherited Sympathy is one basis for morality

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Von Neumann and Morgenstern

• John von Neumann and Oscar Morgenstern 1944
• Formalisation of the theory of utility
• Rationality defined as consistency through axioms
• The principle of rationality as utility
  maximisation
• One dimensional theory of utility

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Management by objectives

• McGregor (1960) theory X and theory Y
• X humans dislike work and will avoid it if
  possible
• Y the integration of individual and
  organizational goals
• He states that the assumptions of theory Y are
  not finally validated, but that they are
  nevertheless far more consistent with existing
  knowledge in the social sciences than are the
  theory X assumptions.
• The integration of organizational goals with
  those of the employees is a main managerial task
  Management by Objectives

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Stake Holder Theory

• Kaplan Norton
• The Balanced Scorecard

• R. Edward Freeman
• Value creation for stakeholders

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Keeney and Raiffa 1976

• Dichotomy between facts and values
• Good decision analysis requires the separation
  between objective facts and subjective values
• Multi-objective decision making
• Formalisation of weighting
• The goal hierarchy and weights should be used as
  a medium for communicating organizational goals

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Emotion and decision making

• Case Phineas Gage
• Experiment 1
• A group of people, some normal and some suffering
  from prefrontal deficiency was
• Exposed to a fire alarm
• Shown value laden pictures
• Experiment 2
• Choice of card decks

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Damasios theory
Neocortex
Prefrontal lobes
Amygdala
Stimulus
Feelings
Emotional response from the body
Primary emotions trigger
Secondary emotions trigger
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RationalityFøllesdal 1992

• Four dimensions of rationality
• rationality as logical consistency
• pertains both to values and beliefs
• rationality as well-foundedness of beliefs
• beliefs are well supported by available evidence
• rationality of action
• application of decision theory
• rationality as well-foundedness of values
• reflective equilibrium that gives a stable set of
  convictions that are relevant for the decision
  situation

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Consistency of beliefs I

• Wason 1966
• Cards A D 3 7
• Each card has a number on one side and a letter
  on the other
• Rule If there is an A on one side, there is a 3
  on the other
• Which cards would you turn to check whether the
  rule has been applied properly?

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Consistency of beliefs II

• A. Linda is a teacher in an elementary school
• B. Linda works in a bookstore and takes Yoga
  classes
• C. Linda is active in the feminist movement
• D. Lina is a psychiatric social worker
• E. Linda is a member of the league of Women
  Voters
• E. Linda is a bank teller
• F. Linda is an insurance salesperson
• G. Linda is a bank teller and is active in the
  feminst movement

• Tversky Kahneman 1983
• Linda is 31 years old, single, out- spoken, and
  very bright. She majored in philosophy. As a
  student, she was deeply concerned with issues of
  discrimination and social justice, and also
  participated in antinuclear demonstrations.
  Please, rank the following statements by their
  probability.