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Ethics in OR

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  1. Ethics in OR November 2003 J. N. Hooker Carnegie Mellon University

  2. Outline • Ethical theory • Utilitarian, Kantian, Aristotelian, & cross-cultural • Employment ethics • Professional ethics • What it is, OR/MS, teaching • Intellectual property • Legal and ethical aspects • Your issues

  3. Along the way… • Will examine some issues: • What is wrong with cheating on an exam? • Is it OK to break an employment contract to take a better job? • Should one teach to maximize ratings on course evaluations? • What is the ethical status of intellectual property? • Will look at some mathematical modeling of ethics.

  4. Ethical theory Utilitarian ethics Ethical theory: Utilitarian ethics

  5. Origin of utilitarianism • Jeremy Bentham applied utilitarianism to criminal justice in Britain. • Punishment should maximize utility, not exact retribution. • What is utility? You decide. Just stick with your definition. • For example, deterrence and rehabilitation may be more effective than retribution. • The idea is to be consistent. • Utilitarianism is a formal conditional of rationality. Ethical theory: Utilitarian ethics

  6. Measuring utility • It is hard to measure pleasure, happiness, etc. • But one can have more or less of it. • When utilities cannot be compared, there is no obligation. • Utility functions can perhaps be calibrated with lotteries, etc. • Utilitarianism reduces ethics to single-criterion maximization. Ethical theory: Utilitarian ethics

  7. Policy Utilitarianism • Utilitarianism can impose counterintuitive obligations. • The inconvenience of my voting outweighs the infinitesimal benefit of one additional vote. • Utilitarianism therefore instructs me to stay home on election day. Ethical theory: Utilitarian ethics

  8. Policy utilitarianism • Utilitarianism is better conceived as dictating a utility-maximizing policy. • So utilitarianism applies to policy makers: corporate boards or officers, government officials, etc. • In the case of voting: • My voting will increase utility at the margin if the optimal set of people vote. Ethical theory: Utilitarian ethics

  9. Rule utilitarianism • Rule utilitarianism requires individuals to follow the optimal policy. • In a failed state where voting is meaningless and dangerous, rule utilitarianism requires me to vote. • Policy utilitarianism does not apply to individual decisions. Ethical theory: Utilitarian ethics

  10. Rule utilitarianism • Another problem... Optimal Persons asked to vote may be identical to some not required to vote. Totalutility Utility Socialutility Individualutility Required to vote Number voting Identical persons Ethical theory: Utilitarian ethics

  11. Utilitarianism and distributive justice • Everyone has equal weight when summing utilities. • Yet utilitarianism can endorse unequal distributions if they maximize total utility. • Low minimum wage, high CEO salaries, etc. • Give lion’s share of resources to those who can best use it. • Talented, well-born, etc. Ethical theory: Utilitarian ethics

  12. Utilitarianism and distributive justice • Bentham’s response: principle of decreasing marginal utility implies some degree of equality. • Concentration of resources in a few people may result in less overall utility. • Check it out mathematically. Let • xi = resources allotted to person i. • cixip = utility created by allotment xi, where 0 ≤ p ≤ 1. • R = total resources available. Ethical theory: Utilitarian ethics

  13. Utilitarianism and distributive justice • p = 1 implies most talented person (largest ci) gets all the resources; p = 0 implies most egalitarian case. • The optimization problem is • Associate Lagrange multiplier  with constraint and obtain for each i Ethical theory: Utilitarian ethics

  14. Utilitarianism and distributive justice • The optimal allocation of resources xi and fraction ui of utility is • As p → 0, allocation becomes proportional to ci. • So the most egalitarian distribution utilitarianism allows is to allot persons resources and utility in proportion to their abilities to generate utility. • Even if the optimal allocation is usually just, it seems unlikely that it is necessarily just. Ethical theory: Utilitarian ethics

  15. Utilitarianism and distributive justice(c1,…,c20) = (11,…,30) Ethical theory: Utilitarian ethics

  16. Ethical theory Kantian ethics Ethical theory: Kantian ethics

  17. Strengths of Kantian ethics • Applies to individual decisions. • Accounts for distributive justice. • Based only on a formal condition for rationality. Ethical theory: Kantian ethics

  18. Basic premises • One always acts for a reason (i.e., according to a maxim). • That is, one always acts to achieve some end. • If a reason justifies an action for me, it justifies the same action for anyone. Ethical theory: Kantian ethics

  19. Basic premises • I stay home from the polls because voting is inconvenient. • If this is sufficient reason for me, it is sufficient reason for anyone. • If not, perhaps it is because some people enjoy voting. • Then part of my reason is that I don’t enjoy voting. • My maxim is, “Let me stay home if voting is convenient and I don’t enjoy it.” Ethical theory: Kantian ethics

  20. Generalization test • But my maxim is actually: Don’t vote if • Voting is inconvenient. • I don’t enjoy it. • Others who find voting inconvenient and unenjoyable will vote anyway. • This cannot be the rationale for my action because it is inconsistent. • Sufficient reasons for me must be sufficient reasons for anyone. Ethical theory: Kantian ethics

  21. Generalization test • What is wrong with cheating on an exam? • My cheating presupposes that most people don’t cheat, even though they have the same reasons to cheat I have. • If they cheated, grades would have no meaning and cheating would be impossible. • My maxim is, “Let me cheat when it benefits me and when other people whom it benefits will not cheat.” • This is not a consistent rationale for cheating. Ethical theory: Kantian ethics

  22. Free rider principle • Free rider principle is a special case. • Nonvoter is a free rider on system supported by citizenship of others. • Cheater is a free rider on system supported by honesty of others. Ethical theory: Kantian ethics

  23. A rule of thumb • Avoid action that undermines a practice it presupposes. • Cheating, practiced generally, undermines the grading system it presupposes. • Letting others do the voting, practiced generally, undermines the voting behavior it presupposes. Ethical theory: Kantian ethics

  24. A rule of thumb • But don’t be misled: it is OK to fight crime, even though if everyone did this, it would undermine the crime it seems to presuppose. • One must look at the reasons for action. • The maxim might be, “Fight crime if crime exists.” • The existence of crime is a consistent rationale for fighting crime. • It does not presuppose that others will not fight crime if it exists. Ethical theory: Kantian ethics

  25. Improvement over rule utilitarianism • I don’t have to vote in a failed state in which nobody votes. • My maxim is, “Don’t vote if voting is futile.” • The futility of voting is a consistent rationale for not voting. • It is does not presuppose that others will vote even though voting is futile. Ethical theory: Kantian ethics

  26. Moral Agency • Why must actions have reasons? • Western worldview must distinguish action from mere behavior. • A mosquito’s behavior is explained only by cause-and-effect and so is not action. • Human actions are moral agents when their behavior can also be plausibly explained as based on reasons. • This solves freedom & determinism dilemma. • Ethics can be applied to complex robots, beings from another planet. Ethical theory: Kantian ethics

  27. Moral Agency • Unethical action is not action at all. • Has no coherent explanation in terms of reasons. • No consistent rationale explains my cheating on exam. • Behavior with only a “psychological” explanation is not action and therefore unethical. • I don’t vote because I am angry at the government. • I don’t vote because of some sublimated impulse, etc. • Unethical behavior destroys one’s agency and abdicates one’s freedom. Ethical theory: Kantian ethics

  28. Rawlsian theory • John Rawls characterized Kantian decision making as taking place behind a “veil of ignorance.” • People decide what to do without knowing who they are. • The reasons for the action must be valid regardless of the agent’s identity. • This is another way of stating that reasons for me must be reasons for anyone. Ethical theory: Kantian ethics

  29. Rawlsian theory • This is different from maximizing expected utility. • A CEO (deliberating behind the veil of ignorance) may approve a massive layoff because she is unlikely to be one of the redundant workers. • This is not good enough for Rawls. • She must find the reasons for the layoff equally valid if she herself is terminated. Ethical theory: Kantian ethics

  30. Rawlsian theory • Rawls infers a theory of distributive justice. • Policy makers must find their decisions to be justifiable even if they are in the lowest class. • Policy must never improve the lot of an upper class at the expense of a lower class. Ethical theory: Utilitarian ethics

  31. Rawlsian theory • According to Rawls, this results in a lexicographic criterion. • Act so as to maximize the welfare of the lowest class, then the second lowest class, etc. • In general, lexmax f1(x), … , fn(x) subject to x  S where fi (x) = utility of person with ith lowest utility. Ethical theory: Utilitarian ethics

  32. Rawlsian theory • Recall the distribution problem in which • xi = resources allotted to person i. • ci xip = utility created by allotment xi , where 0 ≤ p ≤ 1. • R = total resources available. • In this simple case, the lexmax equalizes utility across the population. Ethical theory: Utilitarian ethics

  33. Rawlsian theory • The lexmax allocation of resources xi and fraction ui of utility is • compared to the utilitarian solution Ethical theory: Utilitarian ethics

  34. Rawlsian theory Ethical theory: Utilitarian ethics

  35. Ethical Theory Aristotelian Ethics Ethical theory: Aristotelian ethics

  36. More than ethics • Aristotelian ethics proposes more than a necessary condition for ethical behavior. • It talks about one’s purpose in life. • In Western culture, it exists in tension with Judeo-Christian tradition, which also addresses purpose. • Kantian theory captures much of the ethical content of Judeo-Christian viewpoint. • Both traditions derive ethics from their larger views. Ethical theory: Aristotelian ethics

  37. Teleological explanation • Teleological explanation is central to Aristotelian ethics. • Make sense of things by giving them a purpose in a system. • For example, assign a purpose to organs of the body. • Assign a purpose to forest or sea in an ecosystem. Ethical theory: Aristotelian ethics

  38. How to be good • Ethics: how to be good. • Good = performs one’s function well. • A good tool performs its function well. • A good person does the same. • No concept of moral obligation. • It’s all about self-actualization. • Realizing one’s potential (naturalistic ethics). • Must identify purpose or function of things, including people. • It’s this or a meaningless farce: take your choice. Ethical theory: Aristotelian ethics

  39. Virtues • The function of a thing is what it is uniquely qualified to do. • The heart’s function is to pump blood. • A human being’s function is to bring uniquely human qualities to the world (virtues). • Courage, honor, loyalty, (applied) intelligence, aesthetic sensibility, sophrosyne. • Otherwise, Aristotle doesn’t know why we are here. Ethical theory: Aristotelian ethics

  40. Ethical theory Cross-cultural ethics Ethical theory: Cross-cultural ethics

  41. Consistency vs. care • Western ethics based on rationality & consistency (efficiency, justice). • Human beings are autonomous moral agents – isolated individuals in a secular world. • Westerners see their viewpoint as universal. • Elsewhere, consistency is less important • Different conceptions of human nature – pantheistic, communitarian, etc. • Idea of care is often important. Ethical theory: Cross-cultural ethics

  42. Corruption • Corruption = an activity that undermines a cultural system. • For example: Purchasing agent. • May award contracts based on transparency, or based on personal connections. • In the West, cronyism is corrupting. • There is conflict of interest (company vs. agent). • In relationship-based system, cronyism is foundation for trust. • There is no conflict of interest. Company wants trusted suppliers. Ethical theory: Cross-cultural ethics

  43. Corruption • Corrupting behavior depends on the system. • Bribery: • corrupts rule-based transparency in the West. • corrupts guānxìin China. • can be functional in Korea. Ethical theory: Cross-cultural ethics

  44. Corruption • Lawsuits: • are functional in USA. • corrupt group harmony in Japan. • are corrupting in USA when abused. • Nepotism: • undermines transparency in West. • supports family-based system in China. Ethical theory: Cross-cultural ethics

  45. Employment ethics Keeping an employment contract Employment ethics

  46. Employment example • A graduating student wants to break an employment contract to take a more attractive job. • The student has acted in good faith so far. • Stopped job hunting after accepting the first offer. • The employer acted in good faith. • Was unaware that student was committed, or • Had reason to believe the student was uncommitted. Employment ethics

  47. Policy utilitarianism • At the individual level, breaking the contract is optimal. • But this is suboptimal at a higher level. • College career services often require both students and employers to honor their agreements or lose access to services. Employment ethics

  48. Kantian approach • Possibility of breaking an employment contract presupposes that most people keep contracts. • There is no consistent rationale for breaking a contract merely for convenience. • Part of the rationale for doing so must be that others don’t do the same. Employment ethics

  49. Kantian approach • Perhaps certain exceptions are consistent with overall practice. • Must be able to find a consistent rationale that explains a choice to break the agreement. • Merely yielding to peer pressure is not a choice and is unethical. Employment ethics

  50. Kantian approach • An inconsistent rationale: • I stopped job hunting after taking the job and received an unsolicited offer of a better job from an employer who was unaware that I was committed. • Presupposes that others do not act on this rationale. • Contracts are meaningless if employers can hire committed students simply by not asking whether they are committed. • A possibly consistent rationale: • I stopped job hunting after taking the job and received an unsolicited offer of a better job from an employer who had reason to believe that I was uncommitted. • This must in fact be a plausible rationale for my decision to break the contract. • I would keep the contract if the employer did not have reason to believe I am uncommitted. Employment ethics