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Cost-Benefit Versus Expected Utility Acceptance Rules

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Abstract

A rule for the acceptance of scientific hypotheses called ‘the principle of cost-benefit dominance’ is shown to be more effective and efficient than the well-known principle of the maximization of expected (epistemic) utility. Harvey’s defense of his theory of the circulation of blood in animals is examined as a historical paradigm case of a successful defense of a scientific hypothesis and as an implicit application of the cost-benefit dominance rule advocated here. Finally, various concepts of ‘dominance’ are considered by means of which the effectiveness of our rule may be increased.

Michalos, A.C.: 1970. Cost-benefit versus expected utility acceptance rules. Theory and Decision, 1, pp. 61–88. © 1970 by D. Reidel Publishing Company, Dordrecht-Holland.

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Notes

  1. 1.

    All but the last of these rules are reviewed in Michalos (1969b).

  2. 2.

    MacCrimmon (1968) and Pruzan (1966) contain less thorough comparisons of these and similar rules, with respect to different applications. Raiffa (1969) contains a defense of the Bemoulli-Bayes principle for “multi-attribute” problems. Hinrichs and Taylor (1969) and Prest and Turvey (1965) contain excellent surveys of recent work on cost-benefit analysis.

  3. 3.

    A fairly thorough analysis of decision-making costs may be found in Michalos (to be published).

  4. 4.

    These two definitions, of course, are merely special applications of the famous Pareto Principle that has been used widely by economists since Vilfredo Pareto’s Cours d'tconomie politique, 1877, e.g., Arrow (1951), Harsanyi (1955), Hildreth (1953), Luce and Raiffa (1964), Newman (1965), Rothenberg (1961), Tullock and Buchanan (1962).

  5. 5.

    ‘Effectiveness’ and ‘efficiency’ are analyzed in greater detail in Michalos (1970b).

  6. 6.

    On the problem of scales and their transformations see Ackoff (1962), Fishbum (1964), Luce and Raiffa (1964) and Rothenberg (1961).

  7. 7.

    A vast amount of literature has been produced by proponents and opponents of “pragmatic utility”, and it is doubtful that I could contribute anything novel to the discussion here. Interested readers may find critiques of the concept in Arrow (1951), Ellsberg (1961), Kuhn (1963), MacCrimmon (1968), Manheim and Hall (1968), Michalos (1965a, 1966, 1967), Rothenberg (1961) and Stedry and Chames (1966).

  8. 8.

    A more thorough analysis of the technique may be found in Miller and Starr (1960).

  9. 9.

    The path outlined here for Galen’s view has been put together from excerpts from On the Functions of Parts of the Human Body in Crombie (1959), Fleming (1955), Graubard (1964) and Singer (1957) and from the remarks of the historians themselves.

  10. 10.

    Both Crombie (1959, II, pp. 235–237) and Pagel (1961, pp. 177–182) regard these analogies as highly influential on Harvey’s thinking.

  11. 11.

    The flow of blood through capillaries was not observed until 1661 by Marcello Malpighi (Crombie 1959, II).

  12. 12.

    Crombie (1959, I, pp. 164–165) and Fleming (1955) completely missed this point, and criticized historians who had referred to a general ebbing and flowing in the whole venous system. See also section “Internal Consistency” below.

  13. 13.

    Galen imagined that the vital functions were produced by the activity of three kinds of “spirits”, namely, the “vital spirit” of the heart, the “natural spirit” of the liver and the “animal spirit” of the brain. The first “accounted for” the “vital faculty” or “principle of animal life”, the second for the “vegetative faculty” or “principle of nutrition and growth” and the third for the “psychic faculty” or “spiritual principle of life” (Crombie 1959; Ackermann 1961, pp. 163–167).

  14. 14.

    The mitral valves are located between the auricles and ventricles in the mitral orifIces on both sides of the heart. The one referred to here is on the left side and known as the ‘bicuspid valve’ because it has two flaps or doors.

  15. 15.

    According to the first quotation in section “External Analogies” above, he evidently accepted a geocentric theory of the planetary system.

  16. 16.

    Most of the case histories cited in Bunge (1961) seem to have admitted some reversals, although a more careful analysis might reveal a different picture.

  17. 17.

    From a formal or logico-mathematical point of view, voting theory and the theory of multi-attribute decision-making are virtually indistinguishable. See, for example, Mackenzie (1967), Michalos (1969c, 1970a, to be published, unpublished manuscript).

  18. 18.

    This is also suggested by MacCrimmon (1968).

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Acknowledgements

The number of friends who have kindly given me suggestions and encouragement is almost embarrassingly large, but I would like to express my gratitude to Myles Brand, Cliff Hooker, David Hull, Scott Kleiner, Hugh Lehman, Werner Leinfellner, Andrew McLaughlin and Tom W. Settle.

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    Alex C. Michalos

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Michalos, A.C. (2017). Cost-Benefit Versus Expected Utility Acceptance Rules. In: Connecting the Quality of Life Theory to Health, Well-being and Education. Springer, Cham. https://doi.org/10.1007/978-3-319-51161-0_1

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