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. On Wealth and the Diversity of Friendships: High Social Class People around the World have fewer International Friends

    Maurice H. Yearwood, Amy Cuddy, Nishtha Lambaa, Wu Youyoua, Ilmo van der Lowe, Paul K. Piff, Charles Gronin, Pete Fleming, Emiliana Simon-Thomas, Dacher Keltner and Aleksandr Spectre

    Having international social ties carries many potential advantages, including access to novel ideas and greater commercial opportunities. Yet little is known about who forms more international friendships. Here, we propose social class plays a key role in determining people's internationalism. We conducted two studies to test whether social class is related positively to internationalism (the building social class hypothesis) or negatively to internationalism (the restricting social class hypothesis). In Study 1, we found that among individuals in the United States, social class was negatively related to percentage of friends on Facebook that are outside the United States. In Study 2, we extended these findings to the global level by analyzing country-level data on Facebook friends formed in 2011 (nearly 50 billion friendships) across 187 countries. We found that people from higher social class countries (as indexed by GDP per capita) had lower levels of internationalism—that is, they made more friendships domestically than abroad.

    Keywords: friendships; Social Class; internationalism;


    Yearwood, Maurice H., Amy Cuddy, Nishtha Lambaa, Wu Youyoua, Ilmo van der Lowe, Paul K. Piff, Charles Gronin, et al. "On Wealth and the Diversity of Friendships: High Social Class People around the World have fewer International Friends." Personality and Individual Differences 87 (December 2015): 224–229. View Details
  2. The Cambridge Handbook of Consumer Psychology

    Michael I. Norton, Derek D. Rucker and Cait Lamberton

    Why do consumers make the purchases they do, and which ones make them truly happy? Why are consumers willing to spend huge sums of money to appear high status? This handbook addresses these key questions and many more. It provides a comprehensive overview of consumer psychology, examining cutting-edge research at the individual, interpersonal, and societal levels. Leading scholars summarize past and current findings and consider future lines of inquiry to deepen our understanding of the psychology behind consumers' decision making, their interactions with other consumers, and the effects of societal factors on consumption. The Cambridge Handbook of Consumer Psychology will act as a valuable guide for faculty as well as graduate and undergraduate students in psychology, marketing, management, sociology, and anthropology.


    Norton, Michael I., Derek D. Rucker and Cait Lamberton, eds. The Cambridge Handbook of Consumer Psychology. New York: Cambridge University Press, 2015. View Details
  3. Global Teams That Work

    Tsedal Neeley

    Many companies today rely on employees around the world, leveraging their diversity and local expertise to gain a competitive edge. However, geographically dispersed teams face a big challenge: Physical separation and cultural differences can create social distance, or a lack of emotional connection, that leads to misunderstandings and mistrust. To help global team leaders manage effectively, the author shares her SPLIT framework for mitigating social distance. It has five components: • Structure. If a team is made up of groups with different views about their relative power, the leader should connect frequently with those who are farthest away and emphasize unity. • Process. Meeting processes should allow for informal interactions that build empathy. • Language. Everyone, regardless of language fluency, should be empowered to speak up. • Identity. Team members must be active cultural learners and teachers to understand one another's identity and avoid misinterpreting behaviors. • Technology. When choosing between videoconferencing, e-mail, and other modes of communication, leaders should ask themselves if real-time conversation is desirable, if their message needs reinforcement, and if they are opting for the technology they want others to use.


    Neeley, Tsedal. "Global Teams That Work." Harvard Business Review 93, no. 10 (October 2015): 74–81. View Details
  4. Men as Cultural Ideals: Cultural Values Moderate Gender Stereotype Content.

    Amy Cuddy, Elizabeth Baily Wolf, Peter Glick, Susan Crotty, Jihye Chong and Michael I. Norton

    Four studies tested whether cultural values moderate the content of gender stereotypes, such that male stereotypes more closely align with core cultural values (specifically, individualism vs. collectivism) than do female stereotypes. In Studies 1 and 2, using different measures, Americans rated men as less collectivistic than women, whereas Koreans rated men as more collectivistic than women. In Study 3, bicultural Korean Americans who completed a survey in English about American targets rated men as less collectivistic than women, whereas those who completed the survey in Korean about Korean targets did not, demonstrating how cultural frames influence gender stereotype content. Study 4 established generalizability by reanalyzing Williams and Best's (1990) cross-national gender stereotype data across 26 nations. National individualism– collectivism scores predicted viewing collectivistic traits as more—and individualistic traits as less—stereotypically masculine. Taken together, these data offer support for the cultural moderation of gender stereotypes hypothesis, qualifying past conclusions about the universality of gender stereotype content.

    Keywords: gender stereotypes, stereotype content, culture, individualism, collectivism;


    Cuddy, Amy, Elizabeth Baily Wolf, Peter Glick, Susan Crotty, Jihye Chong, and Michael I. Norton. "Men as Cultural Ideals: Cultural Values Moderate Gender Stereotype Content." Journal of Personality and Social Psychology 109, no. 4 (October 2015): 622–635. View Details
  5. Deflategate and the National Football League

    Marco Iansiti and Christine Snively

    On January 18, 2015, the New England Patriots faced the Indianapolis Colts in the AFC Championship game. In the second quarter, a Colts player intercepted a pass from Patriots quarterback Tom Brady. Colts equipment personnel alerted NFL officials that the ball's air pressure was below the required 12.5 PSI (pounds per square inch). Some argued that lower PSI provided a competitive advantage as it made the ball easier to grip and harder to fumble. At halftime, game officials found the air pressure in 11 of the 12 Patriots game balls to be under 12.5 PSI. The NFL launched an investigation into what became known in the media as "Deflategate," and commissioned attorney Ted Wells to investigate whether or not the balls had been intentionally deflated. Wells' team, with expert consultants, examined air pressure data recorded by referees, the temperature on game day, the behavior of Patriots players, and other evidence. Did the Deflategate investigation reveal any actual evidence of cheating? Were there flaws in Wells' investigation?

    Keywords: "deflategate"; analytics; National Football League; NFLPA; Roger Goodell; Tom Brady; Operations; United States;


    Iansiti, Marco, and Christine Snively. "Deflategate and the National Football League." Harvard Business School Case 616-008, September 2015. View Details
  6. How Best-Self Activation Influences Emotions, Physiology and Employment Relationships

    Daniel M. Cable, Jooa Julia Lee, Francesca Gino and Bradley R. Staats

    It may be possible to offer people a new understanding of their best-self concepts, leading to positive personal and social change. We developed theory about how best-self activation can lead to both immediate and long-term outcomes through recursion, interaction, and subjective construal between the self concept and the social system. In two lab experiments and a field experiment in a global consulting firm, we tested the hypotheses by offering people reflections on times they were at their best. Results confirmed that best-self activation inspired improvements in people's emotions, resistance to disease, resilience to stress and burnout, creative problem solving, performance under pressure, and relationships with their employer. Results also revealed that best-self activations are more effective in creating improvements when they feature information from one's social network rather than personal reflections.

    Keywords: best-self activation; resilience to stress; employee socialization; psychological contracts;


    Cable, Daniel M., Jooa Julia Lee, Francesca Gino, and Bradley R. Staats. "How Best-Self Activation Influences Emotions, Physiology and Employment Relationships." Harvard Business School Working Paper, No. 16-029, September 2015. View Details
  7. Efficiencies and Regulatory Shortcuts: How Should We Regulate Companies like Airbnb and Uber?

    Benjamin G. Edelman and Damien Geradin

    New software platforms use modern information technology, including full-featured web sites and mobile apps, to allow service providers and consumers to transact with relative ease and increased trust. These platforms provide notable benefits including reducing transaction costs, improving allocation of resources, and information and pricing efficiencies. Yet they also raise questions of regulation, including how regulation should adapt to new services and capabilities, and how to correct market failures that may arise. We explore these challenges and suggest an updated regulatory framework that is sufficiently flexible to allow software platforms to operate and deliver their benefits, while ensuring that service providers, users and third parties are adequately protected from harms that may arise.

    Keywords: platforms; regulation; sharing economy; Uber; Airbnb; universal service; Insurance; Lawfulness; Two-Sided Platforms; Industry Structures; Business Strategy; Competitive Strategy; Transportation Industry; Accommodations Industry;


    Edelman, Benjamin G., and Damien Geradin. "Efficiencies and Regulatory Shortcuts: How Should We Regulate Companies like Airbnb and Uber?" Harvard Business School Working Paper, No. 16-026, September 2015. View Details
  8. How Beliefs about Self-creation Inflate Value in the Human Brain

    Raphael Koster, Tali Sharot, Rachel Yuan, Benedetto De Martino, Michael I. Norton and Raymond J. Dolan

    Humans have a tendency to overvalue their own ideas and creations. Understanding how these errors in judgement emerge is important for explaining suboptimal decisions, as when individuals and groups choose self-created alternatives over superior or equal ones. We show that such overvaluation is a reconstructive process that emerges when participants believe they have created an item, regardless of whether this belief is true or false. This overvaluation is observed both when false beliefs of self-creation are elicited (Experiment 1) or implanted (Experiment 2). Using brain imaging data we highlight the brain processes mediating an interaction between value and belief of self-creation. Specifically, following the creation manipulation there is an increased functional connectivity during valuation between the right caudate nucleus, where we show BOLD activity correlated with subjective value, and the left amygdala, where we show BOLD activity is linked to subjective belief. Our study highlights psychological and neurobiological processes through which false beliefs alter human valuation and in doing so throw light on a common source of error in judgements of value.

    Keywords: fMRI; amygdala; hippocampus; medial temporal lobe; caudate nucleus; Values and Beliefs;


    Koster, Raphael, Tali Sharot, Rachel Yuan, Benedetto De Martino, Michael I. Norton, and Raymond J. Dolan. "How Beliefs about Self-creation Inflate Value in the Human Brain." Art. 473. Frontiers in Human Neuroscience 9 (September 2015): 1–10. View Details
  9. Materiality in Corporate Governance: The Statement of Significant Audiences and Materiality

    Robert G. Eccles and Tim Youmans

    Under the prevailing ideology of "shareholder primacy" most boards of directors believe that they are prevented from considering stakeholders other than shareholders in determining material issues and materiality for strategy and reporting. New research is showing that legal foundations exist for directors to indeed consider other stakeholders. To many boards, this is new thinking. In order to assist boards in this new realm of taking into account multi-stakeholder significance, we have structured this paper in four parts and a conclusion. In Part I we review fiduciary duty focusing on to whom this duty is owed. In Part II, we review the relevance of materiality in corporate governance. In Part III, we review our audience-focused materiality determination approach and in Part IV we discuss the new idea of an annual board "Statement of Significant Audiences and Materiality." We conclude with some preliminary research results, ideas for future research, and next steps.


    Eccles, Robert G., and Tim Youmans. "Materiality in Corporate Governance: The Statement of Significant Audiences and Materiality." Harvard Business School Working Paper, No. 16-023, September 2015. View Details
  10. Diversity and Team Performance in a Kenyan Organization

    Benjamin Marx, Vincent Pons and Tavneet Suri

    We present findings from a field experiment in Kenya where staff was randomly allocated to teams. Staff members for a canvassing exercise were randomly assigned a teammate and a manager for the duration of the activities, inducing exogenous variation in the ethnic and demographic composition of each team. We find that ethnic homogeneity between teammates increases team productivity, while a manager having the same ethnicity as any one teammate has the opposite effect. The effect of ethnic homogeneity is more than twice the size of the effect of homogeneity along gender or age lines. Ethnically homogeneous teams also perform better at more difficult tasks. Qualitative results from a survey of the staff suggest that social norms within groups, rather than heterogeneous preferences or communication technology, are driving the effects of homogeneity on team productivity.


    Marx, Benjamin, Vincent Pons, and Tavneet Suri. "Diversity and Team Performance in a Kenyan Organization." Working Paper, 2015. View Details
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