Human behavior and decision-making

Human behavior and decision-making is a featured research topic at Harvard Business School.
 
Ever since their origins about three decades ago, the Behavioral Science areas of economics, ethics and managerial psychology have been rapidly evolving. In the 1980's and 1990's, early work by Max Bazerman in judgment and negotiation, Matthew Rabin in behavioral economics, and James Sebenius in negotiations was instrumental in shaping research on Human Behavior & Decision-Making. Today, our research focuses on individual and interactive judgment and decision making and explores the role of personal bias, cognition and learning, time, perception, ethics and morality, and emotion.  
  1. Pride to Cooperate: The Consideration of Pride Promotes Cooperation in a Social Dilemma

    In social dilemmas, broad collective interests conflict with immediate self-interests. In two studies, we examine the role of pride in guiding cooperative behavior in a social dilemma. We find that the consideration of pride led to more cooperation compared to the consideration of joy or a control condition (Study 1) and compared to the consideration of enjoyment (Study 2). The importance participants assigned to cooperation mediated this effect of emotion on cooperation (Studies 1 and 3). We suggest that because pride is linked to pro-social behavior, considering pride activates the concept of pride which in turn makes related behavioral representations more accessible and thus increases cooperation.

    Keywords: social dilemma; cooperation; pride; joy; social emotions;

    Citation:

    Dorfman, Anna, Tal Eyal, and Yoella Bereby-Meyer. "Pride to Cooperate: The Consideration of Pride Promotes Cooperation in a Social Dilemma." Journal of Experimental Social Psychology 55 (November 2014): 105–109. View Details
  2. Crony Capitalism, American Style: What Are We Talking About Here?

    This paper seeks to reduce the ambiguity surrounding our understanding of what crony capitalism is, what it is not, what costs crony capitalism leaves in its wake, and how we might contain it.

    Keywords: democracy; industrial governance; institutional corruption; crony capitalism; lobbying; campaign finance; the “revolving door,” costs; cronyism, business ethics; campaign finance reform;

    Citation:

    Salter, Malcolm S. "Crony Capitalism, American Style: What Are We Talking About Here?" Harvard Business School Working Paper, No. 15-025, October 2014. View Details
  3. Do Experts or Collective Intelligence Write with More Bias? Evidence from Encyclopædia Britannica and Wikipedia

    Which source of information contains greater bias and slant—text written by an expert or that constructed via collective intelligence? Do the costs of acquiring, storing, displaying and revising information shape those differences? We evaluate these questions empirically by examining slanted and biased phrases in content on US political issues from two sources—Encyclopædia Britannica and Wikipedia. Our overall slant measure is less (more) than zero when an article leans towards Democrat (Republican) viewpoints, while bias is the absolute value of the slant. Using a matched sample of pairs of articles from Britannica and Wikipedia, we show that, overall, Wikipedia articles are more slanted towards Democrat than Britannica articles, as well as more biased. Slanted Wikipedia articles tend to become less biased than Britannica articles on the same topic as they become substantially revised, and the bias on a per word basis hardly differs between the sources. These results have implications for the segregation of readers in online sources and the allocation of editorial resources in online sources using collective intelligence.

    Keywords: Information; Prejudice and Bias; Online Technology;

    Citation:

    Greenstein, Shane, and Feng Zhu. "Do Experts or Collective Intelligence Write with More Bias? Evidence from Encyclopædia Britannica and Wikipedia." Harvard Business School Working Paper, No. 15-023, October 2014. View Details
  4. Caesars Entertainment

    This case describes the introduction of a regression analysis model for forecasting guest arrivals to Caesars Palace hotel in Las Vegas, Nevada. The company will use the forecast to staff the front desk in the hotel. The staff is unionized and the company has little flexibility to change staffing levels on a short term basis. The case is set in the context of industry overcapacity and lower customer demand. The case describes several models that could be used to forecast guest arrivals, including a moving average technique and a multiple regression model. The multiple regression model includes over 40 independent variables, including dummy variables (e.g., to represent day of week, month, year, holidays, paydays) as well as continuous variables to represent customer segment and average daily room rate. The case contains tables showing the output of the regression model, and compares the fit of the moving average and regression models. The case introduces allows students to understand how such a model is developed within an organization and to evaluate the models presented. Students may work with a data file with several years of historical data or they may work with the model description and output results in the case.

    Keywords: Forecasting; staffing; gaming; gaming industry; hotel industry; Decision Making; Forecasting and Prediction; Human Resources; Selection and Staffing; Entertainment; Games, Gaming, and Gambling; Operations; Service Delivery; Service Operations; Accommodations Industry; Travel Industry; Tourism Industry; Food and Beverage Industry; Las Vegas;

    Citation:

    Hammond, Janice H., and Aldo Sesia. "Caesars Entertainment." Harvard Business School Case 615-031, October 2014. View Details
  5. Teckentrup: A Door to Managing Difference

    For Kai Teckentrup, the owner and co-CEO of the German “Mittelstand” door manufacturer Teckentrup, balancing competitive pressures, demographic realities and values were at the heart of the diversity program that he had started and championed at the company. Beyond this, attracting skilled workers to Germany was a national imperative; as the native population aged and its numbers in the workforce shrank, it would be critical to find new workers to fund and maintain the retirement and social service programs provided by the government. The company had made significant progress, and Kai was a recognized leader in German business for his attention to and success in managing diversity, but he knew there was much more to do.

    Keywords: Diversity Management; "Corporate Values," Manufacturing Industry, Competitiveness, Demographics; Change Management; Transformation; Diversity Characteristics; Ethnicity Characteristics; Gender Characteristics; Literacy Characteristics; Nationality Characteristics; Race Characteristics; Residency Characteristics; Corporate Accountability; Corporate Social Responsibility and Impact; Organizational Culture; Economic Growth; Fairness; Moral Sensibility; Values and Beliefs; Immigration; Employee Relationship Management; Civil Society or Community; Manufacturing Industry; Construction Industry; Consumer Products Industry; Europe; Germany; Russia; Turkey;

    Citation:

    Rose, Clayton, Jerome Lenhardt, and Daniela Beyersdorfer. "Teckentrup: A Door to Managing Difference." Harvard Business School Case 315-016, October 2014. View Details
  6. IDEO: Human-Centered Design

    The case describes IDEO, one of the world’s leading design firms, and its human-centered innovation culture and processes. It is an example of what managers can do to make their own organizations more innovative. In reaction to a rapidly changing competitive landscape, a team of IDEO designers have been hired by Cineplanet, the leading movie cinema chain in Peru, to reinvent the movie going experience for Peruvians. Cineplanet wishes to better align their operating model with the needs and behaviors of its customers.

    Keywords: design thinking; innovation; service delivery; service management; service;

    Citation:

    Buell, Ryan W., and Andrew Otazo. "IDEO: Human-Centered Design." Harvard Business School Case 615-022, October 2014. View Details
  7. Indus Towers: From Infancy to Maturity

    Indus Towers, the world's largest telecom tower company, is a joint venture between three telecom rivals in India. These rivals—Bharti Airtel, Vodafone India, and Idea Cellular—combined their telecom towers to provide “shared telecom infrastructure” to wireless telecom operators on a nondiscriminatory basis. The CEO has transformed Indus from a struggling startup with a monopolistic mindset into a customer-centric organization. He now wants to grow Indus. To achieve this, however, he needs to reconcile conflicting objectives among Indus’s shareholders. All three shareholders are also his customers; often these dual roles engender different perspectives and lead to different requirements. The CEO needs to determine how to convince the board to take a decision that keeps Indus’s best interests in mind while balancing the operators’ interests.

    Keywords: Decisions; Judgments; Customer Focus and Relationships; Management; Technology; Mobile Technology; Technology Networks; Telecommunications Industry; India;

    Citation:

    Gulati, Ranjay, Maxim Sytch, and Rachna Tahilyani. "Indus Towers: From Infancy to Maturity." Harvard Business School Case 415-005, October 2014. View Details
  8. Management Practices, Relational Contracts and the Decline of General Motors

    General Motors was once regarded as one of the best managed and most successful firms in the world, but between 1980 and 2009 its share of the U.S. market fell from 62.6% to 19.8%, and in 2009 the firm went bankrupt. In this paper we argue that the conventional explanation for this decline—namely high legacy labor and health care costs—is seriously incomplete and that GM's share collapsed for many of the same reasons that many of the other highly successful American firms of the 50s, 60s, and 70s were forced from the market, including a failure to understand the nature of the competition they faced and an inability to respond effectively once they did. We focus particularly on the problems GM encountered in developing the relational contracts essential to modern design and manufacturing. We discuss a number of possible causes for these difficulties, including GM's historical practice of treating both its suppliers and its blue collar workforce as homogeneous, interchangeable entities as well as its view that expertise could be partitioned so that there was minimal overlap of knowledge amongst functions or levels in the organizational hierarchy and decisions could be made using well-defined financial criteria. We suggest that this dynamic may have important implications for our understanding of the role of management in the modern, knowledge-based firm, and for the potential revival of manufacturing in the United States.

    Keywords: Organizational Design; Management Practices and Processes; Insolvency and Bankruptcy; Manufacturing Industry; Auto Industry; United States;

    Citation:

    Helper, Susan, and Rebecca Henderson. "Management Practices, Relational Contracts and the Decline of General Motors." Journal of Economic Perspectives 28, no. 1 (Winter 2014): 49–72. View Details
  9. A 'Present' for the Future: The Unexpected Value of Rediscovery

    Although documenting everyday activities may seem trivial, four studies reveal that creating records of the present generates unexpected benefits by allowing future rediscoveries. In Study 1, we use a "time capsule" paradigm to show that individuals underestimate the extent to which rediscovering experiences from the past will be curiosity-provoking and interesting in the future. In Studies 2 and 3, we find that people are particularly likely to underestimate the pleasure of rediscovering ordinary, mundane experiences compared to rediscovering extraordinary experiences. Finally, Study 4 demonstrates that underestimating the pleasure of rediscovery leads to time-inconsistent choices: individuals forgo opportunities to document the present but then prefer to rediscover those moments in the future. Underestimating the value of rediscovery is linked to people's erroneous faith in their memory of everyday events. By documenting the present, people provide themselves with the opportunity to rediscover mundane moments that may otherwise have been forgotten.

    Keywords: History; Information Management; Cognition and Thinking;

    Citation:

    Zhang, Ting, Tami Kim, Alison Wood Brooks, Francesca Gino, and Michael I. Norton. "A 'Present' for the Future: The Unexpected Value of Rediscovery." Psychological Science 25, no. 10 (2014): 1851–1860. View Details
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