This paper deals with the CAPM-derived capital budgeting criterion, and in particular with Rubinstein’s (1973) criterion, according to which a project is profitable if the project rate of return is greater than the risk-adjusted cost of capital, where the latter depends on the project’s disequilibrium systematic risk. It is shown that the disequilibrium net present value implied by this criteri...

We present a DNA-based implementation of reaction system with molecules encoding elements of the propositional logic, that is, propositions and formulas. The protocol can perform inference steps using, for example, modus ponens and modus tollens rules and de Morgan's laws. The set of the implemented operations allows for inference of formulas using the laws of natural deduction. The system can ...

We suggest and test an integrated framework explaining how the interpretation of and the reasoning from causal conditionals (e.g., "If you fertilize a flower it will bloom") depend on exceptions. In the model availability of exceptional situations (e.g., "the flower was not watered enough") reduces the subjective conditional probability of the consequent given the antecedent, P(q p). The condit...

University students (n = 86) revised their beliefs about story-based relationships in the face of new, contradictory information. Prior to resolving an inconsistency, students drew a picture depicting the story information. Participants’ resolution of logical inconsistencies reflected (a) the structure of the facts at hand and (b) the relationship conveyed by the major premise (All p are q). St...

A fine-grained dual-process approach to conditional reasoning is advocated: Responses to conditional syllogisms are reached through the operation of either one of two systems, each of which can rely on two different mechanisms. System1 relies either on pragmatic implicatures or on the retrieval of information from semantic memory; System2 operates first through inhibition of System1, then (but ...

The present study examines the decisions made by reasoners when they are asked to revise their beliefs in the face of new, counterfactual information. Participants indicated the Scope (the degree of set inclusion) of semantic generalizations about real categories in a Pretest. In subsequent experiments, these Scope values were used to predict the willingness of participants to retain statements...

Results on approximate deduction in the context of the calculus of evidence of Dempster-Shafer and the theory of interval probabilities are reported. Approximate conditional knowledge about the truth of conditional propositions was assumed available and expressed as sets of possible values (actually numeric intervals) of conditional probabil­ ities. Under different interpretations of this condi...

Simple belief-revision tasks were defined by a giving subjects a conditional premise, (p—>q), a categorical premise, (p, for a modus-ponens belief-set, or ~q, for a modus tollens belief-set), and the associated inference (q or ~p, respectively). "New" information contradicted the initial inference (~ q or p, respectively). Subjects indicated their degree of belief in the conditional premise and...