Saturday, April 23, 2011

You are not so ethical.

A while back I made reference to youarenotsosmart.com, a fun blog dedicated to the many ways our brains misfire without our knowledge. Unsurprisingly, our brains also misfire when it comes to ethics, as my Harvard professor Max Bazerman and his colleague Ann Tenbrunsel point out in a recent New York Times piece.  It turns out that we're not so ethical, either.

A key misconception most of us have about ethics is that lapses are entirely a matter of choice. People face temptation and, torn between what they know they should do and what they want to do, choose one path or the other.  Bazerman and Tenbrunsel show us it's not nearly so simple.

Rather than from overt choices, much of our unethical behavior has its roots in self-delusion.  We have "motivated blindness" to overlook unethical behavior in ourselves and in others when it serves our interest to do so.   More interestingly, to me at least, is the data showing that many steps we take to prevent unethical behavior can actually increase it.

Fines for compliance and requirements to disclose potential conflicts of interest have been shown to increase the likelihood of unethical behavior by providing mechanisms for self-delusion.  Even a token fine turns a dilemma from an ethical one to a financial one.  No one thinks a basketball player is a bad person based on the number of technical fouls they rack up, because the detailed system of penalties turns fouls from cheating to just part of the game.  In the same way, sanctioning systems in business can result in more violations and cause people to see ethical decisions as economic decisions.

We are ethical beings.  We like to maintain a positive self-image and to see ourselves as ethical and moral.  Self-delusion can help us maintain this image by hiding the ethical component of decisions.  Someone who discloses a conflict of interest may feel that they have done their duty in that regard and be free to let unconscious bias guide their actions.  Research shows this bias to be substantial; Bazerman and Tenbrunsel cite the example of auditors who, given identical information, make sharply different assessments of the value of a company depending on whether they think their client is the seller or the buyer.

Negotiators need to factor this into their work.  If you are designing a long-term agreement between two parties, for example, you may be working against your interests if you build in penalties and sanctions for performance shortcomings or bad behavior.  We should all bear this in mind when examining our own behavior.  Ethical dilemmas abound and nearly everyone thinks they are far more ethical than they actually are.  You and I are unlikely to be exceptions to this rule.

8 comments:

  1. A while back I made reference to youarenotsosmart.com, a fun blog dedicated to the many ways our brains misfire without our knowledge.

    I really think it should be called someofyouarenotsosmart.com, and refer to the many ways that some of our brains misfire without some of us realizing it.

    You can do sociological experiments to demonstrate that, on average, people have confirmation bias, or are irrational about sunk costs, etc. But that doesn't mean that all people are like that. Just some people (perhaps most).

    I think everyone does have some irrational ways of thinking. But the universal assertion that everyone has all of these irrationalities, drives me nuts. I know it's not true.

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  2. You and I are unlikely to be exceptions to this rule.

    P.S. Just because I'm reading and commenting on this blog, I'm already strongly biased compared to a random sample of human beings.

    In any case, even if any given individual is not likely to be an exception, with 7 billion people that still leaves room for a whole lot of exceptions.

    I think it's sort of like arguing that a stone isn't quartz, because, after all, most stones are not quartz. Well, the latter is true, but you still have a better chance of telling whether any particular stone is quartz by looking at the stone, rather than by treating it as simply an exemplar of the class of all stones.

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  3. I agree that there can be and probably are exceptions. If, however, most people's perceptions of themselves are biased ot's not such a simple thing to look at the stone. I think it's prudent for most people to recognize that they are very likely subject to the same biases and mind bugs that most others are subject to. YMMV.

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  4. People might have different degrees of bias, but we are the worst person at evaluating our own biases.

    Just think of the classic 'Why does advertising work on everyone but me'?

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  5. I think it's prudent for most people to recognize that they are very likely subject to the same biases and mind bugs that most others are subject to.

    I just think people are too diverse for this to be all that useful as a generalization.

    That's not true for other kinds of generalizations, where we have more data. For example, human lifespans are limited to about 100 years. We have over a billion data points and none of those human lifespans exceeded 125 years. So, if you were to assert your lifespan would be 200 years, that would be a pretty extraordinary claim, requiring extraordinary evidence.

    But, if all you knew was that the average human lifespan is 75 years, then a lifespan of 200 years wouldn't be all that exceptional, at all. For example, an exponential distribution with mean 75 years would predict that 7% of people would live at least 200 years.

    Our data on confirmation bias and loss aversion and similar irrationalities is much more like the latter than the former. We know that, on average, humans exhibit these irrationalities. But that's entirely consistent with 50% of people being irrational and 50% of people being rational, or something like that. I know of no evidence that these biases are universal or nearly universal.

    And I observe that, unlike human lifespans, human intelligence and how people think varies enormously in many other ways. Some people are introverted, and some people are extroverted. Some people are self-referenced, and some people are other-referenced. Some people are analytical and logical, and some people are emotional and intuitive. Some people are precise, and some people are sloppy. Some people are skeptical, and some people are gullible. So I don't see why it would be surprising that human intelligence varies in this way, too. Indeed, I think it would be surprising if it didn't.

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  6. People might have different degrees of bias, but we are the worst person at evaluating our own biases.

    This assertion seems unsupported by evidence, at least in the full generality with which you proclaim it. I think we can agree there is objective evidence that many people fail to recognize their own biases. But, this is consistent with the theory that everyone is bad at recognizing their own biases, or it's also consistent with the theory that many, but not all, people are bad at recognizing their own biases. You would need stronger data to distinguish between these two theories.

    It's important to note that, logically, there are reasons to believe people would be bad at recognizing their own biases (your bias distorts your own perceptions, so it can obviously be hard for you to observe) and yet also reasons to believe people would be good at recognizing their own biases (unlike anyone else, you have a unique ability to observe your own thought processes, which no one else has any access to).

    Like meditation skills, where some people are much much more able than others to observe and even manipulate their own mental states, I think it would be logical to expect that some people are much much better than others at observing and understanding their own biases. I would also expect that this is something that can be developed with practice and effort.

    Just think of the classic 'Why does advertising work on everyone but me'?

    I would call that a classic example of stupidity. I hope you're not suggesting that everyone thinks this way. There are good reasons why advertising works, some of which are rational and some of which rely on irrationality but are still important, and I'm well aware of many of the ways in which I'm influenced by advertising.

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  7. I agree... we as creatures are good at self delusion. That is why many of us "theists" spend so much time asking God (who sees clearly) to give us insight into our own failings. And why we are convinced that none of us are truly "good"... yet.

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  8. Interesting post, Chad. Thanks.

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