Utility, informed preference, or happiness: Following Harsanyi's argument to its logical conclusion

Harsanyi (1997) argues that, for normative issues, informed preferences should be used, instead of actual preferences or happiness (or welfare). Following his argument allowing him to move from actual to informed preferences to its logical conclusion forces us to use happiness instead. Where informed preferences differ from happiness due to a pure concern for the welfare of others, using the former involves multiple counting. This “concerning effect” (non-affective altruism) differs from and could be on top of the “minding effect” (affective altruism) of being happy seeing or helping others to be happy. The concerning/minding effect should be excluded/included in social decision. Non-affective altruism is shown to exist in a compelling hypothetical example. Just as actual preferences should be discounted due to the effects of ignorance and spurious preferences, informed preferences should also be discounted due to some inborn or acquired tendencies to be irrational, such as placing insufficient weights on the welfare of the future, maximizing our biological fitness instead of our welfare. Harsanyi's old result on utilitarianism is however defended against criticisms in the last decade. Harsanyi (1997) argues, among other things, that in welfare economics and ethics, what are important are people's informed preferences, rather than either their actual preferences (as emphasized by modern economists) or their happiness (as emphasized by early utilitarians). The main purpose of this paper is to argue that, pursuing Harsanyi's argument that allows him to move from actual to informed preferences to its logical conclusion forces us to happiness as the ultimately important thing. The early utilitarians were right after all! Since I personally approve of Harsanyi's basic argument, I regard myself as his follower who becomes more Catholic than the Pope. (It is not denied that, in practice, the practical difficulties and undesirable side-effects of the procedure of using happiness instead of preferences have to be taken into account. Thus, even if we ultimately wish to maximize the aggregate happiness of people, it may be best in practice to maximize their aggregate preferences in most instances. This important consideration will be largely ignored in this paper.) The secondary objective is to give a brief defence of Harsanyi's (1953, 1955) much earlier argument for utilitarianism (social welfare as a sum of individual utilities) that has received some criticisms in the last decade. The argument (e.g. Roemer 1996) that Harsanyi's result is irrelevant to utilitarianism is based on the point that the VNM (von Neumann-Morgenstern) utility is unrelated to the subjective and interpersonally comparable cardinal utility needed for a social welfare function. Harsanyi's position is defended by showing that the two types of utility are the same (apart from an indeterminate zero point for the former that is irrelevant for utilitarianism concerning the same set of people). Received: 29 May 1997 / Accepted: 3 November 1997     

Continued usage of technology versus situational factors: An empirical analysis

Mainstream technology management literature suggests that research on continued usage of technology is largely based on two perspectives, namely (i) a forward-looking perspective that underpins the technology acceptance model (TAM), and (ii) a retrospective perspective that is based on the expectation disconfirmation theory (EDT). We propose an extended framework to re-examine continued usage of technology by combining these two perspectives and incorporating individual, social and environmental factors as additional variables. Our study, in the context of users’ continued usage of e-learning tools, reveals that in addition to user satisfaction and perceived usefulness, self-efficacy, system service support and social pressure are significant factors that affect continued usage of technology. Our findings enrich the theoretical framework of continued usage of technology, and provide e-learning developers with managerial insights on how to entice learners to continue using their e-learning tools.     

Price,Rebate, and Returns Supply Contracts for Coordinating Supply Chains with Price‐Dependent Demands

Channel rebates and returns policies are common mechanisms for manufacturers to entice retailers to increase their order quantities and sales ultimately. However, when the underlying demand depends on the retail price, it has been known that channel coordination cannot be achieved if only one of these mechanisms is deployed. In this article, we show that a policy that combines the use of wholesale price, channel rebate, and returns can coordinate a channel with both additive and multiplicative price‐dependent demands. In addition to determining the sufficient conditions for the contract parameters associated with the equilibrium policy, we show that multiple equilibrium policies for channel coordination exist. We further explore how the equilibrium policy can be adjusted to achieve Pareto improvement. Other issues such as the maximum amount of expected profit that the manufacturer can share under the coordinated channel, the structural properties of the contracts under both the additive and multiplicative price‐dependent demand functions are also discussed.     

Evaluation of Beta Generation Algorithms

In this article, we discuss the maximum likelihood estimates (MLEs) for the exponential and Weibull distributions by considering progressive Type-I interval censored data. For exponential distribution, the explicit expression of MLE of failure rate cannot be obtained when the intervals are not equal in length. The direct application of some numerical algorithms, such as the Newton–Raphson algorithm, is non-ideal because of the cumbersome second derivative. We apply some equivalent quantities to obtain the MLE of failure rate of exponential distribution. Based on the equivalent quantities and the Weibull-to-exponential transformation technique, we propose a new algorithm to obtain the MLEs for the parameters of progressive Type-I interval Weibull data. An example reanalysis and some simulation studies are carried out to illustrate the performance of the estimations using the new algorithm.     

Preliminary Goodness-of-Fit Tests for Normality do not Validate the One-Sample Student t

One of the most basic topics in many introductory statistical methods texts is inference for a population mean, μ. The primary tool for confidence intervals and tests is the Student t sampling distribution. Although the derivation requires independent identically distributed normal random variables with constant variance, σ², most authors reassure the readers about some robustness to the normality and constant variance assumptions. Some point out that if one is concerned about assumptions, one may statistically test these prior to reliance on the Student t. Most software packages provide optional test results for both (a) the Gaussian assumption and (b) homogeneity of variance. Many textbooks advise only informal graphical assessments, such as certain scatterplots for independence, others for constant variance, and normal quantile–quantile plots for the adequacy of the Gaussian model. We concur with this recommendation. As convincing evidence against formal tests of (a), such as the Shapiro–Wilk, we offer a simulation study of the tails of the resulting conditional sampling distributions of the Studentized mean. We analyze the results of systematically screening all samples from normal, uniform, exponential, and Cauchy populations. This pretest does not correct the erroneous significance levels and makes matters worse for the exponential. In practice, we conclude that graphical diagnostics are better than a formal pretest. Furthermore, rank or permutation methods are recommended for exact validity in the symmetric case.     

A Decomposition of Copulas and Its Use

ABSTRACT

In this article, we create a decomposition that represents and describes the depen-dence structure between two variables. Since copulas provide a deep understanding of the dependence structure by eliminating the effects of the marginals, they play a key role in this study. We define a discretized copula density matrix and decompose it into a set of permutation matrices by using the Birkhoff–von Neumann theorem. This decomposition provides a way to effectively apply the concepts of copulas to solve problems in multivariate statistical data analysis.     

A Unified Method for Checking Compatibility and Uniqueness for Finite Discrete Conditional Distributions

Checking compatibility for two given conditional distributions and identifying the corresponding unique compatible marginal distributions are important problems in mathematical statistics, especially in Bayesian inferences. In this article, we develop a unified method to check the compatibility and uniqueness for two finite discrete conditional distributions. By formulating the compatibility problem into a system of linear equations subject to constraints, it can be reduced to a quadratic optimization problem with box constraints. We also extend the proposed method from two-dimensional cases to higher-dimensional cases. Finally, we show that our method can be easily applied to checking compatibility and uniqueness for a regression function and a conditional distribution. Several numerical examples are used to illustrate the proposed method. Some comparisons with existing methods are also presented.     

Bayesian Inference for the Precision Matrix for Scale Mixtures of Normal Distributions

Baysian inference is considered for the precision matrix of the multivariate regression model with distribution of the random responses belonging to the multivariate scale mixtures of normal distributions. The posterior distribution and some identities involving expectations taken with respect to this posterior distribution are derived when the prior distribution of the parameters is from the conjugate family. The results are specialized to the case where the random responses have a matrix-t distribution and thus generalizing the results of Zellner (1976 Zellner , A. ( 1976 ). Bayesian and non-Bayesian analysis of the regression model with multivariate Student-t error terms . J. Amer. Statist. Assoc. 71 : 400 – 405 .[Taylor & Francis Online], [Web of Science ®] , [Google Scholar]) and Muirhead (1986 Muirhead , R. J. ( 1986 ). A note on some Wishart expectations . Metrika 33 : 247 – 251 .[Crossref] , [Google Scholar]).     

Bayesian analysis of linear models exhibiting changes in mean and precisionat an unknown time point

This paper analyses a linear model in which both the mean and the precision change exactly once at an unknown point in time. Posterior distributions are found for the unknown time point at which the changes occurred and for the ratio of the precisions. The Bayesian predictive distribution of k future observations is also derived. It is shown that the unconditional posterior distribution of the ratio of precisions is a mixture of F-type distributions and the predictive distribution is a mixture of multivariate t distributions.     

A relation between product-limit estimate and joint-risk estimate

The joint-risk estimate of the survival function, used for censored survival data grouped into fixed intervals, is shown to be the geometric mean of all the product-limit estimates that correspond to all the possible orderings of all the failure times and censoring times in the group. The joint-risk estimate is proposed as a more appropriate and better means of dealing with ties for data containing tied failure times and censoring times. It is also applicable to competing risk problems with tied failure times involving different causes. It could be used as a substitute for the product-limit estimate in discrete failure time analysis.