Human behavior and decision-making

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, David Garvin in decision-making, and James Sebenius in negotiations was instrumental in shaping today’s research on Human Behavior & Decision-Making. The multi-disciplinary nature of our research brings together faculty from various academic units here at the business school as well as from Harvard Kennedy School, our economics and psychology departments, and other top-tier Universities. We are continuously learning and bringing real-world experience to our research as we advise companies spanning a multitude of industries and governments across the globe. Our research focuses on the individual and explores several topic areas such as:

The influence of personal biases on judgment and decision-making
Cognition and learning processes
How the perception of self and others influences behavior and choices
The impact of ethics on moral judgment
How emotion-induced incentives drive motivation

Our collaborative studies are conducted both in the field as well as the laboratory. As an example, take Michael Norton of the School's Marketing unit and his large field experiment on over 350 visitors at an American amusement park ride and study of over 150 undergraduate students to investigate drivers of prosocial behavior, or Francesca Gino, of the Negotiations, Organizations & Markets unit, and her laboratory experiments on hundreds of University students to test the relationship between honesty and creativity. As our research provides insights into the underpinnings behind how individuals and organizations think and behave, we are helping to improve the world's understanding of how to make individual and organizational decisions more productive and positive going into the future.

Keywords: behavioral finance, social influence, network effects, decisions, social networks, consumer behavior, social perception, trust, personal development, motivation, creativity, gender

Featured Works

Book | 2011
Blind Spots: Why We Fail to Do What's Right and What to Do about It
Max H. Bazerman and Ann E. Tenbrunsel
When confronted with an ethical dilemma, most of us like to think we would stand up for our principles. But we are not as ethical as we think we are. In Blind Spots, leading business ethicists Max Bazerman and Ann Tenbrunsel examine the ways we overestimate our ability to do what is right and how we act unethically without meaning to. From the collapse of Enron and corruption in the tobacco industry, to sales of the defective Ford Pinto and the downfall of Bernard Madoff, the authors investigate the nature of ethical failures in the business world and beyond and illustrate how we can become more ethical, bridging the gap between who we are and who we want to be.
Keywords: Crime and Corruption; Moral Sensibility; Values and Beliefs; Failure; Performance Evaluation; Sales; Consumer Products Industry;
Citation:
Bazerman, Max H., and Ann E. Tenbrunsel. Blind Spots: Why We Fail to Do What's Right and What to Do about It. Princeton University Press, 2011.
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Article | Research in Organizational Behavior | 2011
The Dynamics of Warmth and Competence Judgments, and Their Outcomes in Organizations
Amy J.C. Cuddy, Peter Glick and Anna Beninger
Two traits-warmth and competence-govern social judgments of individuals and groups, and these judgments shape people's emotions and behaviors. This paper describes the causes and consequences of warmth and competence judgments; how, when, and why they determine significant professional and organizational outcomes, such as hiring, employee evaluation, and allocation of tasks and resources. Warmth and competence represent the central dimensions of group stereotypes, the majority of which are ambivalent-characterizing groups as warm but incompetent (e.g., older people, working mothers) or competent but cold (e.g., model minorities, female leaders), in turn eliciting ambivalent feelings (i.e., pity and envy, respectively) and actions toward members of those groups. However, through nonverbal behaviors that subtly communicate warmth and competence information, people can manage the impressions they make on colleagues, potential employers, and possible investors. Finally, we discuss important directions for future research, such as investigating the causes and consequences of how organizations and industries are evaluated on warmth and competence.
Keywords: Judgments; Organizations; Emotions; Behavior; Selection and Staffing; Performance Evaluation; Resource Allocation; Valuation; Competency and Skills; Information; Research;
Citation:
Cuddy, Amy J.C., Peter Glick, and Anna Beninger. "The Dynamics of Warmth and Competence Judgments, and Their Outcomes in Organizations." Research in Organizational Behavior 31 (2011): 73–98.
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Article | Journal of Personality and Social Psychology | 2012
Memory Lane and Morality: How Childhood Memories Promote Prosocial Behavior
F. Gino and S. Desai
Four experiments demonstrated that recalling memories from one's own childhood lead people to experience feelings of moral purity and to behave prosocially. In Experiment 1, participants instructed to recall memories from their childhood were more likely to help the experimenter with a supplementary task than were participants in a control condition, and this effect was mediated by self-reported feelings of moral purity. In Experiment 2, the same manipulation increased the amount of money participants donated to a good cause, and self-reported feelings of moral purity mediated this relationship. In Experiment 3, participants who recalled childhood memories judged the ethically-questionable behavior of others more harshly, suggesting that childhood memories lead to altruistic punishment. Finally, in Experiment 4, compared to a control condition, both positively-valenced and negatively-valenced childhood memories led to higher empathic concern for a person in need, which, in turn increased intentions to help.
Keywords: Moral Sensibility; Behavior; Research; Emotions; Relationships; Judgments;
Citation:
Gino, F., and S. Desai. "Memory Lane and Morality: How Childhood Memories Promote Prosocial Behavior." Journal of Personality and Social Psychology 102, no. 4 (2012): 743–758.
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Article | Social Psychological & Personality Science | January 2011
The Price of Good Intentions
Derek Koehler, Rebecca White and Leslie John
Self-predictions are highly sensitive to current intentions but often largely insensitive to factors influencing the readiness with which those intentions are translated into future behavior. When such factors are under a person's control, they could be used to increase the probability that desired future behavior will be undertaken, but they will be underused if self-predictions underestimate their impact. This hypothesis was borne out in two experiments involving working students attempting to achieve a savings goal: They strongly intended to save, made overly optimistic self-predictions even when it was costly to do so, and were willing to pay very little for a service that could help them save more because they did not anticipate its impact on their future behavior. By contrast, students who were informed of the service's actual impact were willing to pay more for it, and students did not underestimate the impact of the service on fellow students.
Keywords: Planning; Saving; Behavior; Forecasting and Prediction;
Citation:
Koehler, Derek, Rebecca White, and Leslie John. "The Price of Good Intentions." Social Psychological & Personality Science 2, no. 1 (January 2011).
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Article | Journal of Experimental Psychology: Applied | 2011
The Artful Dodger: Answering the Wrong Question the Right Way
Todd Rogers and Michael I. Norton
What happens when speakers try to "dodge" a question they would rather not answer by answering a different question? In 4 studies, we show that listeners can fail to detect dodges when speakers answer similar-but objectively incorrect-questions (the "artful dodge"), a detection failure that goes hand in hand with a failure to rate dodgers more negatively. We propose that dodges go undetected because listeners' attention is not usually directed toward a goal of dodge detection (i.e., Is this person answering the question?) but rather toward a goal of social evaluation (i.e., Do I like this person?). Listeners were not blind to all dodge attempts, however. Dodge detection increased when listeners' attention was diverted from social goals toward determining the relevance of the speaker's answers (Study 1), when speakers answered a question egregiously dissimilar to the one asked (Study 2), and when listeners' attention was directed to the question asked by keeping it visible during speakers' answers (Study 4). We also examined the interpersonal consequences of dodge attempts: When listeners were guided to detect dodges, they rated speakers more negatively (Study 2), and listeners rated speakers who answered a similar question in a fluent manner more positively than speakers who answered the actual question but disfluently (Study 3). These results add to the literatures on both Gricean conversational norms and goal-directed attention. We discuss the practical implications of our findings in the contexts of interpersonal communication and public debates.
Keywords: Interpersonal Communication; Goals and Objectives; Performance Evaluation; Social Issues;
Citation:
Rogers, Todd, and Michael I. Norton. "The Artful Dodger: Answering the Wrong Question the Right Way." Journal of Experimental Psychology: Applied 17 (2011): 139–147.
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Recent Publications

Article | Journal of Economic Geography | May 2013
From Russia with Love: The Impact of Relocated Firms on Incumbent Survival
Oliver Falck, Christina Guenther, Stephan Heblich and William R. Kerr
We identify the impact of local firm concentration on incumbent performance with a quasi-natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resources.
Citation:
Falck, Oliver, Christina Guenther, Stephan Heblich, and William R. Kerr. "From Russia with Love: The Impact of Relocated Firms on Incumbent Survival." Journal of Economic Geography 13, no. 3 (May 2013): 419–449.
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Book | 2013
Keeping Up with the Quants: Your Guide to Understanding and Using Analytics
Thomas H. Davenport and Jinho Kim
Managers today need to be able to analyze and make sense of data. They need to be conversant with analytical technology and methods and to make decisions on quantitative analysis. This book offers a variety of practical tools and examples to improve a manager's understanding of business analytics, and to enhance their thinking and decision processes.
Keywords: statistics; business analytics; big data;
Citation:
Davenport, Thomas H., and Jinho Kim. Keeping Up with the Quants: Your Guide to Understanding and Using Analytics. Harvard Business Review Press, 2013.
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Article | International Economic Review | May 2013
Hybrid Innovation in Meiji Japan
Tom Nicholas
Japan's hybrid innovation system during the Meiji era of technological modernization provides a useful laboratory for examining the effectiveness of complementary mechanisms to patents. Patents were introduced in 1885, and by 1911, 1.2 million mostly non-pecuniary prizes were awarded at 8,503 competitions. Prizes provided a strong boost to patent outcomes, especially in less developed prefectures, and they also induced large spillovers of technical knowledge in prefectures adjacent to those with prizes, relative to distant control prefectures without prizes. Linking competition expenditures with the expected market value of patents induced by the prizes permits a cost-benefit assessment of the prize competitions to be made.
Keywords: patents; Prizes; Technological Innovation; System; Patents; Knowledge; Value; Cost vs Benefits; Factories, Labs, and Plants; Performance Effectiveness; Japan;
Citation:
Nicholas, Tom. "Hybrid Innovation in Meiji Japan." International Economic Review 54, no. 2 (May 2013): 575–600.
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Article | Social Cognitive and Affective Neuroscience | April 2013
An fMRI Investigation of Racial Paralysis
Michael I. Norton, Malia F. Mason, Joseph A. Vandello, Andrew Biga and Rebecca Dyer
We explore the existence and underlying neural mechanism of a new norm endorsed by both black and white Americans for managing interracial interactions: "racial paralysis," the tendency to opt out of decisions involving members of different races. We show that people are more willing to make choices—Who is more intelligent? Who is more polite?—between two white individuals (same-race decisions) than between a white and a black individual (cross-race decisions), a tendency that was enhanced when judgments involved traits related to black stereotypes. We use fMRI to examine the mechanisms underlying racial paralysis, revealing greater recruitment of brain regions implicated in socially appropriate behavior (VMPFC), conflict detection (ACC), deliberative processing (DLPFC), and inhibition (VLPFC). We discuss the impact of racial paralysis on the quality of interracial relations.
Keywords: Decision Choices and Conditions; Race Characteristics; Judgments; Personal Characteristics; Behavior; Conflict and Resolution; Recruitment; United States;
Citation:
Norton, Michael I., Malia F. Mason, Joseph A. Vandello, Andrew Biga, and Rebecca Dyer. "An fMRI Investigation of Racial Paralysis." Social Cognitive and Affective Neuroscience 8, no. 4 (April 2013): 387–393.
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Article | Organization Science | March–April 2013
Language Matters: Status Loss & Achieved Status Distinctions in Global Organizations
Tsedal Neeley
How workers experience and express status loss in organizations has received little scholarly attention. I conducted a qualitative study of a French high-tech company that had instituted English as a lingua franca, or common language, as a context for examining this question. Results indicate that nonnative English-speaking employees experienced status loss regardless of their English fluency level. Yet variability in their self-assessed fluency—an achieved status marker—was associated with differences in language performance anxiety and job insecurity in a non-linear fashion: those who believed they had medium level fluency were the most anxious compared to their low and high fluency co-workers. In almost all cases where they differed, self-assessed rather than objective fluency determined how speakers explained their feelings and actions. Although nonnative speakers shared a common attitude of resentment and distrust toward their native English-speaking co-workers, their behavioral responses—assertion, inhibition, or learning—to encounters with native speakers differed based on their self-perceived fluencies. No status differences materialized among nonnative speakers as a function of diverse linguistic and national backgrounds. I discuss the theoretical and practical implications of these findings for status, achieved characteristics, and language in organizations.
Keywords: Organizations; Status and Position; Loss; Spoken Communication; Emotions; Attitudes; Behavior;
Citation:
Neeley, Tsedal. "Language Matters: Status Loss & Achieved Status Distinctions in Global Organizations." Organization Science 24, no. 2 (March–April 2013): 476–497.
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Article | Psychological Science | April 2013
Gendered Races: Implications for Interracial Marriage, Leadership Selection, and Athletic Participation
Adam D. Galinsky, Erika V. Hall and Amy J.C. Cuddy
Six studies explored the overlap between racial and gender stereotypes and the consequences of this overlap for interracial dating, leadership selection, and athletic participation. Two initial studies, utilizing explicit and implicit measures, captured the stereotype content of different racial groups: the Asian stereotype was seen as more feminine whereas the Black stereotype more masculine compared to the White stereotype. Study 3 found that preferences for masculinity versus femininity mediated White participants' attraction to Blacks relative to Asians. Analysis of the 2000 United States Census replicated this pattern with interracial marriages. In Study 5, Blacks were more likely and Asians less likely to be selected for a masculine leadership position compared to Whites. Study 6 analyzed the NCAA Student-Athlete Ethnicity Report and found Blacks were more heavily represented in masculine versus feminine sports relative to Asians. These studies demonstrate that the association between racial and gender stereotypes has important real-world consequences.
Keywords: stereotypes; race; gender; attraction; leadership;
Citation:
Galinsky, Adam D., Erika V. Hall, and Amy J.C. Cuddy. "Gendered Races: Implications for Interracial Marriage, Leadership Selection, and Athletic Participation." Psychological Science 24, no. 4 (April 2013): 498–506.
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Article | Journal of Economics & Management Strategy | Spring 2013
Salience in Quality Disclosure: Evidence from the U.S. News College Rankings
Michael Luca and Jonathan Smith
How do rankings affect demand? This paper investigates the impact of college rankings, and the visibility of those rankings, on students' application decisions. Using natural experiments from U.S. News and World Report College Rankings, we present two main findings. First, we identify a causal impact of rankings on application decisions. When explicit rankings of colleges are published in U.S. News, a one-rank improvement leads to a 1-percentage-point increase in the number of applications to that college. Second, we show that the response to the information represented in rankings depends on the way in which that information is presented. Rankings have no effect on application decisions when colleges are listed alphabetically, even when readers are provided data on college quality and the methodology used to calculate rankings. This finding provides evidence that the salience of information is a central determinant of a firm's demand function, even for purchases as large as college attendance.
Keywords: Rank and Position; Demand and Consumers; Quality; Decisions; Newspapers; United States;
Citation:
Luca, Michael, and Jonathan Smith. "Salience in Quality Disclosure: Evidence from the U.S. News College Rankings." Journal of Economics & Management Strategy 22, no. 1 (Spring 2013): 58–77.
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Lecture | 18 Mar 2013
Business and the Public Good: Ethics in Action
Lynn S. Paine
Citation:
Paine, Lynn S. "Business and the Public Good: Ethics in Action." University of Arizona, Tucson, AZ, March 18, 2013.
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Working Paper | HBS Working Paper Series | 2013
Monitoring and the Portability of Soft Information
Dennis Campbell and Maria Loumioti
We study the portability of soft information in a decentralized financial institution. Theories from a variety of literatures suggest that difficulties in capturing, storing, and communicating soft information can inhibit its portability over time and across individuals within the organization. Using unique data on lending decisions made by employees in a highly decentralized financial services organization, we show that a monitoring system which captures soft information for vertical communication (to superiors) purposes also facilitates the horizontal communication of soft information (across employees) for decision-making purposes. Contrary to prevailing views on the limited portability of soft information, our results provide evidence that the "stock" of soft information accumulated in this system has persistent effects on the lending decisions of employees. We show that employees rely on this information to increase access to credit for borrowers, provide more favorable pricing terms, and reduce the ex post risk of their lending decisions. These effects remain even when this information was acquired by employees other than the decision-maker, and they are not diminished by the physical separation of employees working in different business units.
Citation:
Campbell, Dennis, and Maria Loumioti. "Monitoring and the Portability of Soft Information." Harvard Business School Working Paper, No. 13–077, March 2013.
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Working Paper |
Institutional Access and Failure: Colonial Legal Systems and Persistent Institutional Inadequacy in Tropical Africa
Catherine S. M. Duggan
Citation:
Duggan, Catherine S. M. "Institutional Access and Failure: Colonial Legal Systems and Persistent Institutional Inadequacy in Tropical Africa." Working Paper.
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