Economics, Rational Choice and Normative Philosophy

Thomas Boylan, Ruvin Gekker

• Publisher: Routledge
• Year: 2008
• ISBN:
  9781134077243
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Following Amartya Sen's insistence to expand the framework of rational choice theory by taking into account 'non-utility information, ' economists, political scientists and philosophers have recently concentrated their efforts in analysing the issues related to rights, freedom, diversity intentions and equality. Thomas Boylan and Ruvin Gekker have gathered essays that reflect this trend.

The particular themes addressed in this volume include: the measurement of diversity and freedom, formal analysis of individual rights and intentions, judgment aggregation under constraints and strategic manipulation in fuzzy environments. Some papers in the volume also deal with philosophical aspects of normative social choice.

Part I
Diversity, rights, norms and intentions

1 What is diversity?¹

Nicolas Gravel

Introduction

Diversity is an issue that is attracting increasing attention in various spheres. The governments of more than 150 countries have ratified the Rio convention of 1992, which requires them to adopt economically costly policies aiming at the conservation of biological diversity (article 1 of the Rio convention). More recently, UNESCO has approved, in October 2005, the convention on the promotion and protection of diversity of cultural expressions. This convention has been invoked by the representatives of many countries in the negotiations at the World Trade Organization (WTO) in order to remove certain cultural goods from the scope of free trade agreements. In economics, there is a long-standing tradition of research in industrial organization that is concerned with product diversity and how it can be promoted by various forms of market competitions (Dixit and Stiglitz 1977) is a classical analysis of this topic. Diversity appears also to be an important aspect of the freedom of choice that individuals may have in different situations (Barberà, and Pattanaik 2004; Sugden 1998) according to surveys of the literature on the measurement of freedom of choice. More colloquially, one finds a significant concern in popular discussions about the diversity of opinions expressed in the media or in the political arena. But what is diversity? Would the killing of 500,000 flies of a specific species have the same impact on the reduction of biological diversity as the elimination of the last 6,000 remaining tigers on earth? Is the diversity of opinions expressed in the written press greater in France than in the US? Is the choice of models of cars offered more diverse at General Motors than at Volkswagen? In order to put the Rio or the UNESCO convention into force, or to study the impact of concentration of the media industry on the diversity of opinions expressed in the media, it is of some importance to have available clear yet accurate answers to questions such as these. I propose in this chapter to critically examine some of the approaches that have been proposed in various disciplines—biology and economics for the most part—for answering such questions.

It could of course be argued, without playing on words, that the diversity of contexts to which these questions refer is such that they cannot be handled by a single concept. The biodiversity of an ecosystem is not the same thing as the diversity of opinions found in the media and the two types of situation require completely different notions.

The discussion of this chapter will certainly give some credence to this view by illustrating, on several occasions, how the relative merits of the various proposed approaches to diversity appraisal are dependent upon the context. Yet the point of view that is taken herein is that, different as they are, all problems of diversity appraisal share a common formal structure that will be the main object of analysis. At the most abstract level, the formal structure is very simple. A universe of objects (e.g. living organisms, opinions, car models, cultures, etc.) is given to the diversity appraiser, and various subsets of these objects (ecosystems, newspapers, car retailers, countries) are to be compared on the basis of their diversity. The general question examined is: how can one make these comparisons?

It should be noticed that this very way of addressing the problem limits somehow the kind of issues handled by the approaches covered herein. An important limitation has to do with uncertainty. The consequences on biodiversity, however defined, of many human decisions, deforestations, carbon emissions, etc. are uncertain. So are the consequences, on cultural diversity (however defined), of allowing WTO to treat ‘cultural goods’ as standard freely tradable goods. Hence a question that could be asked, but that will not be asked herein, is: how should one rank decisions with uncertain consequences in terms of diversity?

Answering such a question is obviously a more ambitious task than answering the previous question. If we know how to rank all decisions that have uncertain consequences in terms of diversity, then we know how to rank the subclass of these decisions that have certain consequences; but the converse is obviously false. Some important contributions to the literature on diversity appraisal, notably those of Weitzman (1992, 1993, 1998) and Nehring and Puppe (2002), have proposed answers to this broader question that contain therefore also answers to the first question. However, in discussing these answers, attention will be limited to aspects that concern the narrow problem at hand. To a large extent, this choice of narrowing the discussion to the issue of ‘what is diversity’, rather than to that of ‘how to rank decisions that have (possibly uncertain) consequences on diversity’ is motivated by a prosaic consideration of time and space. Yet this choice also reflects a sentiment that diversity is a delicate notion that remains poorly understood. For this reason, progress in understanding this notion is more likely to come from a narrow focus on its very meaning in some ideally simple situations than from a mixing of it with other complex notions such as uncertainty.

In making diversity comparisons of different sets of objects, it is important to be explicit about the exact information that is assumed to be available on the objects and to be useful for diversity appraisal. All approaches for evaluating diversity differ in the kind of information that they assume and on the role played by the information. For example, in the context of biological diversity, the elements of the ecosystems are very often assumed to be living organisms grouped into species. This grouping obviously plays a crucial role in the appraisal of diversity commonly done by biologists. In other theories of diversity appraisal, especially those developed in economics following Weitzman (1992), a primitive notion of dissimilarity between objects is assumed to play a role. The precision of the information conveyed by the underlying notion of dissimilarity differs across theories. In papers such as those by Bossert, Pattanaik and Xu (2003), Van Hees (2004) and Weitzman (1992, 1993, 1998), this information takes the form of a cardinally meaningful numerical distance between the objects. In other approaches, such as those considered in Bervoets and Gravel (2007), Nehring (1997) and Pattanaik and Xu (2000), the information on dissimilarity is assumed instead to be only qualitative or ordinal in nature. Finally, in the approach developed by Nehring and Puppe (2002) (see also Nehring and Puppe 2003), it is information on the valuation of various attributes of the objects that plays a key role in appraising diversity.

It could be argued that the relevant information for evaluating diversity, and more generally the evaluation of diversity itself, should depend upon the final objective reached by this evaluation. Why is one interested in evaluating diversity? Why is diversity important? The answer to these questions is likely to depend upon the context in which the evaluation is performed. The reasons for being interested in biodiversity are certainly different from those that justify an interest in the promotion of cultural diversity, or a concern for product diversity. Should the reasons that motivate an interest for a measurable phenomenon affect the way by which the measurement of this phenomenon is to be performed?

Opinions on this matter differ. In the context of freedom appraisal, some authors, such as Carter (1999) or Van Hees (1997), have argued that the reasons for being interested in a phenomenon such as freedom of choice—what they call the value of freedom—should not affect the definition, and therefore the measurement, of the phenomenon. A phenomenon can be defined and appraised irrespective of the role played by the phenomenon in the theory used by the appraiser. On the other hand it is quite possible to hold the converse view that ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• List of contributors
• Preface
• Introduction
• PART I Diversity, rights, norms and intentions
• PART II Social choice, judgment aggregation and rationality of legal order
• PART III Philosophical aspects of normative social choice