Marc Le Menestrel
Home page > Research > General Presentation of my Academic (...)
logo

General Presentation of my Academic Research

Save this article in PDF

by Marc Le Menestrel (4/06/2008)

The general goal of my academic research is to expand the notion of rational behavior in order to better include considerations such as “ethical values”, “aesthetic feelings”, “cultural tastes”, “emotional concerns” or “spiritual concerns”.

The relation between these essentially subjective values and the theory of rational behavior raises numerous issues that span from the mathematical foundations of science to decision-making for business executives. As a decision scientist, I am treating these issues with a variety of methodologies and an open-minded spirit. I am especially interested in rationality as understood in economics and management sciences but I am grounding my work in multiple disciplines: philosophy of science, ethics, sociology, psychology, and mathematics in particular.

My personal intention is to provide more theoretical and practical legitimacy to subjective values that I believe are essential for individuals, for companies, for society and for our natural environment.

My research is built on the idea of modeling the combination of two separate types of values that influence rational behavior.

First, there is the value that we can attribute to the things we choose and that we observe directly. For instance, if we run an experiment with amounts of money, each sum of money individuals receive has a value that is measured by a value function, also called a utility function or an objective function.

Second, there are subjective considerations that may also influence behavior. These considerations are revealed by observing behavior and are measured by a multiplicative factor which is outside the value function and leads individuals to depart from the maximization of that function.

Rationality thus generally departs from utility maximization. It combines the values of things -as measured by a value function, with the values of people who chose things- and which is measured by a multiplicative factor.

The meaning of this subjective or behaviorally revealed factor is not directly modeled as it depends on its interpretation and it often cannot be attributed to a directly observable object. In some cases, it will be interpreted as a value for fairness, for reciprocity, or for honesty. In some others, it may be interpreted as the willingness to respect a rule or a principle. The factor may also reflect an emotional bias towards a specific alternative over another.

While the concept of utility tends to be consequential, quantitative, absolute, objective, substantive, stable or independent of context, the nature of ethical values tends to be more procedural, qualitative, relative, subjective, immaterial, variable or dependent on context.

Such a combination of two types of rationality is not new in social sciences, as the sociologist Max Weber had long ago conceptualized the ideal-types of instrumental rationality and value-rationality. However, linking such a dual approach with the standard economic rationality model appears as an original contribution.

This approach allows for the notion of rational behavior to cover a broader range of phenomena. For instance, I have used this approach to offer solutions to classical puzzles of rational behavior such as the Prisoners’ Dilemma and the Allais paradox. These papers belong to a first stream of research which contributes to the understanding of rational behavior.

However, the risk of this approach is that the factor measuring the subjective values could explain everything: it would simply be an ad-hoc parameter added to the standard model. In a second stream of research, I use the axiomatic method to prove that this is not the case. These papers contribute to the foundations of measurement by identifying the conditions under which, from the observation of preferences, we can prove both the existence and uniqueness of a utility function and the existence and uniqueness of a factor. These papers prove that, far from being ad-hoc, it is possible to assign a utility to the objects of choice and to characterize this factor in a rigorous manner. Hence, we do not need to abandon the idea of measuring utility when individuals do not seem to maximize it.

In a third stream of research, I have applied this approach to the field of business ethics linking with my teaching and personal business experience. In business decisions, it is necessary to measure economic consequences as precisely as possible. However, ethical values that are of more subjective nature (like preserving the environment, respecting the law, alleviating exploitative forms of labor, avoiding corruption, etc) should also be given importance even when they cannot be treated as economic values. Here, my work shows how an open form of ethical rationality that I call "Ethical Rationality" and which helps to improve decision-making in business situations.


This section's pages

Governance and Sovereign Wealth Funds

Creative Commons License This creation is licensed under a Creative Commons Attribution License.