On the cognitive argument for cost-benefit analysis
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On the cognitive argument for cost-benefit analysis. / Christiansen, Andreas.
In: Ethical Theory and Moral Practice, Vol. 21, No. 2, 2018, p. 217-230.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - On the cognitive argument for cost-benefit analysis
AU - Christiansen, Andreas
PY - 2018
Y1 - 2018
N2 - In a number of writings, Cass Sunstein has argued that we should use cost-benefit analysis as our primary approach to risk management, because cost-benefit analysis corrects for the cognitive biases that mar our thinking about risk. The paper critically evaluates this ‘cognitive argument for cost-benefit analysis’ and finds it wanting. Once we make distinctions between different cognitive errors and between different aspects of cost-benefit analysis, it becomes apparent that there are really two cognitive arguments, neither of which is successful as arguments for cost-benefit analysis as a whole. One argument shows that the analysis aspect of cost-benefit analysis is warranted because it corrects for false beliefs about the magnitudes of risk and for the neglect of some costs. While this is a sound argument, it does not provide an argument for other aspects of cost-benefit analysis. The second argument purports to show that commensurating and monetizing the values of the effects of regulation is warranted because it corrects for the use of widely diverging values of a statistical life. This argument fails because the use of widely diverging values of a statistical life is not a cognitive error: It is neither precluded by considerations of instrumental rationality, nor by the requirement of treating like cases alike.
AB - In a number of writings, Cass Sunstein has argued that we should use cost-benefit analysis as our primary approach to risk management, because cost-benefit analysis corrects for the cognitive biases that mar our thinking about risk. The paper critically evaluates this ‘cognitive argument for cost-benefit analysis’ and finds it wanting. Once we make distinctions between different cognitive errors and between different aspects of cost-benefit analysis, it becomes apparent that there are really two cognitive arguments, neither of which is successful as arguments for cost-benefit analysis as a whole. One argument shows that the analysis aspect of cost-benefit analysis is warranted because it corrects for false beliefs about the magnitudes of risk and for the neglect of some costs. While this is a sound argument, it does not provide an argument for other aspects of cost-benefit analysis. The second argument purports to show that commensurating and monetizing the values of the effects of regulation is warranted because it corrects for the use of widely diverging values of a statistical life. This argument fails because the use of widely diverging values of a statistical life is not a cognitive error: It is neither precluded by considerations of instrumental rationality, nor by the requirement of treating like cases alike.
KW - Faculty of Humanities
KW - Cost-benefit analysis
KW - Cognitive bias
KW - Risk
KW - Cass Sunstein
KW - Ethics
U2 - 10.1007/s10677-018-9883-9
DO - 10.1007/s10677-018-9883-9
M3 - Journal article
VL - 21
SP - 217
EP - 230
JO - Ethical Theory and Moral Practice
JF - Ethical Theory and Moral Practice
SN - 1386-2820
IS - 2
ER -
ID: 172056016