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.

Featured Works

Book | 2014
The Power of Noticing: What the Best Leaders See
Max Bazerman
This book will examine the common failure to notice critical information due to bounded awareness. The book will document a decade of research showing that even successful people fail to notice the absence of critical and readily available information in their environment due to the human tendency to focus on a limited set of information. This work is still in its formative stages, and I welcome comments about how bounded awareness affects you and your organization and how you have created solutions to such problems.
Keywords: Interpersonal Communication; Judgments; Negotiation; Negotiation Process; Relationships;

Citation:
Bazerman, Max. The Power of Noticing: What the Best Leaders See. New York: Simon & Schuster, 2014. View Details
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Article | Psychological Science | 2014
Time, Money, and Morality
F. Gino and C. Mogilner
Money, a resource that absorbs much daily attention, seems to be present in much unethical behavior thereby suggesting that money itself may corrupt. This research examines a way to offset such potentially deleterious effects—by focusing on time, a resource that tends to receive less attention than money but is equally ubiquitous in our daily lives. Across four experiments, we examine whether shifting focus onto time can salvage individuals' ethicality. We found that implicitly activating the construct of time, rather than money, leads individuals to behave more ethically by cheating less. We further found that priming time reduces cheating by making people reflect on who they are. Implications for the use of time versus money primes in discouraging or promoting dishonesty are discussed.
Keywords: Money; Ethics;

Citation:
Gino, F., and C. Mogilner. "Time, Money, and Morality." Psychological Science 25, no. 2 (February 2014): 414–421. View Details
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Article | Journal of Experimental Psychology: General
The (Perceived) Meaning of Spontaneous Thoughts
Carey K. Morewedge, Colleen Giblin and Michael I. Norton
Spontaneous thoughts, the output of a broad category of uncontrolled and inaccessible higher-order mental processes, arise frequently in everyday life. The seeming randomness by which spontaneous thoughts arise might give people good reason to dismiss them as meaningless. We suggest that it is precisely the lack of control over and access to the processes by which they arise that leads people to perceive spontaneous thoughts to reveal meaningful self-insight. Consequently, spontaneous thoughts potently influence judgment. A series of experiments provides evidence supporting two hypotheses. First, we hypothesize that the more a thought is perceived to be spontaneous, the more it is perceived to provide meaningful self-insight. Participants perceived more spontaneous kinds of thought to reveal greater self-insight than more controlled kinds of thought in Study 1 (e.g., intuition versus deliberation), and perceived thoughts with the same content and target to reveal greater self-insight when spontaneously than deliberately generated in Studies 2 and 3 (i.e., childhood memories and impressions formed, respectively). Second, we hypothesize that greater self-insight attributed to thoughts that are (perceived to be) spontaneous leads those thoughts to more potently influence judgment. Participants felt more sexually attracted to an attractive person whom they thought of spontaneously than deliberately in Study 4, and reported their commitment to a current romantic relationship would be more affected by the spontaneous than deliberate recollection of a good or bad experience with their partner in Study 5.
Much human thought arises unbidden, spontaneously intruding upon consciousness. The thought and name of a former lover might come to mind during dinner with one's spouse. Or worse, it may be blurted out during an intimate moment. Because no trace of the past lover is present, the thought lacks an apparent cause. In the latter case it almost certainly occurs without intent, given its potential consequences. The seeming randomness of such thoughts might provide reason to dismiss them as the wanderings of a restless mind. We propose that it is precisely the lack of control over and access to the process by which spontaneous thoughts come to mind that leads them to be perceived to reveal special self-insight. Drawing on previous theory and research, we propose that the greater self-insight they are attributed leads spontaneous thoughts to exert a greater impact on attitudes and behavior than similar deliberate thoughts.
Compare a wife's thought of a former lover while perusing her yearbook to that same thought during an intimate moment with her husband. In the former case, the reason for the production of that thought is clear ("I thought of him because I looked at his picture while reminiscing about the past"). In the latter case, she lacks both control over the thought and access to its origin. We suggest that its apparent spontaneity should lead her to attribute it special meaning ("Why would I think of him in this moment unless it is important?"), and it should consequently exert a greater influence on her judgment ("I must still have feelings for him"). In this paper, we report a series of five studies examining how the perceived spontaneity of thought influences the extent to which it is believed to yield meaningful self-insight and influences judgment.
Keywords: Spontaneous Thoughts; Self-Insight; Meaning; attribution; Judgment and Decision Making; Decision Making; Cognition and Thinking;

Citation:
Morewedge, Carey K., Colleen Giblin, and Michael I. Norton. "The (Perceived) Meaning of Spontaneous Thoughts." Journal of Experimental Psychology: General 143, no. 4 (August 2014): 1742–1754. View Details
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Article | Academy of Management Annals
Past, Present and Future Research on Multiple Identities: Toward an Intrapersonal Network Approach
Lakshmi Ramarajan
Psychologists, sociologists, and philosophers have long recognized that people have multiple identities—based on attributes such as organizational membership, profession, gender, ethnicity, religion, nationality, and family role(s) and that these multiple identities shape people's actions in organizations. The current organizational literature on multiple identities, however, is sparse and scattered and has yet to fully capture this foundational idea. I review and organize the literature on multiple identities into five different theoretical perspectives: social psychological; microsociological; psychodynamic and developmental; critical; and intersectional. I then propose a way to take research on multiple identities forward using an intrapersonal identity network approach. Moving to an identity network approach offers two advantages: first, it enables scholars to consider more than two identities simultaneously, and second, it helps scholars examine relationships among identities in greater detail. This is important because preliminary evidence suggests that multiple identities shape important outcomes in organizations, such as individual stress and well-being, intergroup conflict, performance, and change. By providing a way to investigate patterns of relationships among multiple identities, the identity network approach can help scholars deepen their understanding of the consequences of multiple identities in organizations and spark novel research questions in the organizational literature.
Keywords: Networks; Research; Organizations; Identity;

Citation:
Ramarajan, Lakshmi. "Past, Present and Future Research on Multiple Identities: Toward an Intrapersonal Network Approach." Academy of Management Annals 8 (2014): 589–659. View Details
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Article | Organizational Behavior and Human Decision Processes | March 2014
Cheating More for Less: Upward Social Comparisons Motivate the Poorly Compensated to Cheat
Leslie K. John, George Loewenstein and Scott Rick
Intuitively, people should cheat more when cheating is more lucrative, but we find that the effect of performance-based pay rates on dishonesty depends on how readily people can compare their pay rate to that of others. In Experiment 1, participants were paid 5 cents or 25 cents per self-reported point in a trivia task, and half were aware that they could have received the alternative pay rate. Lower pay rates increased cheating when the prospect of a higher pay rate was salient. Experiment 2 illustrates that this effect is driven by the ease with which poorly compensated participants can compare their pay to that of others who earn a higher pay rate. Our results suggest that low pay rates are, in and of themselves, unlikely to promote dishonesty. Instead, it is the salience of upward social comparisons that encourages the poorly compensated to cheat.
Keywords: dishonesty; decision making; social comparison; fairness; pay secrecy; Motivation and Incentives; Fairness; Decision Making; Compensation and Benefits;

Citation:
John, Leslie K., George Loewenstein, and Scott Rick. "Cheating More for Less: Upward Social Comparisons Motivate the Poorly Compensated to Cheat." Special Issue on Behavioral Ethics. Organizational Behavior and Human Decision Processes 123, no. 2 (March 2014): 101–109. View Details
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Article | Proceedings of the National Academy of Sciences of the United States of America | 2014
Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men
A.W. Brooks, L. Huang, S.W. Kearney and F. Murray
Entrepreneurship is a central path to job creation, economic growth, and prosperity. In the earliest stages of start-up business creation, the matching of entrepreneurial ventures to investors is critically important. The entrepreneur's business proposition and previous experience are regarded as the main criteria for investment decisions. Our research, however, documents other critical criteria that investors use to make these decisions: the gender and physical attractiveness of the entrepreneurs themselves. Across a field setting (three entrepreneurial pitch competitions in the United States) and two experiments, we identify a profound and consistent gender gap in entrepreneur persuasiveness. Investors prefer pitches presented by male entrepreneurs compared with pitches made by female entrepreneurs, even when the content of the pitch is the same. This effect is moderated by male physical attractiveness: attractive males were particularly persuasive, whereas physical attractiveness did not matter among female entrepreneurs.
Keywords: Prejudice and Bias; Entrepreneurship; Investment; Gender;

Citation:
Brooks, A.W., L. Huang, S.W. Kearney, and F. Murray. "Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men." Proceedings of the National Academy of Sciences of the United States of America 111, no. 12 (March 25, 2014): 4427–4431. View Details
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Chapter | The Interdisciplinary Science of Consumption | 2014
Appetite, Consumption, and Choice in the Human Brain
Brian Knutson and Uma R. Karmarkar
Although linked, researchers have long distinguished appetitive from consummatory phases of reward processing. Recent improvements in the spatial and temporal resolution of neuroimaging techniques have allowed researchers to separately visualize different stages of reward processing in humans. These techniques have revealed that evolutionarily conserved circuits related to affect generate distinguishable appetitive and consummatory signals, and that these signals can be used to predict choice and subsequent consumption. Review of the literature surprisingly suggests that appetitive rather than consummatory activity may best predict future choice and consumption. These findings imply that distinguishing appetite from consumption may improve predictions of future choice and illuminate neural components that support the process of decision making.

Citation:
Knutson, Brian, and Uma R. Karmarkar. "Appetite, Consumption, and Choice in the Human Brain." Chap. 9 in The Interdisciplinary Science of Consumption, edited by Stephanie D. Preston, Morten L. Kringelbach, and Brian Knutson, 163–184. Cambridge, MA: MIT Press, 2014. View Details
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Recent Publications

Case | HBS Case Collection | March 2019
Profits, Politics, and Pipelines: Europe, Russia, and the Challenge of Nord Stream 2 (A)
Rawi Abdelal, Galit Goldstein, Cressida Arkwright and Khilola Zakhidova
Proposed in 2012, Nord Stream 2 was a pipeline project that aimed to bring natural gas directly from Russia to Europe beneath the Baltic Sea. Gazprom, an energy company with deep ties to the Russian state, hoped to manage the project in association with a consortium of European companies. The pipeline appeared to be a rational investment for these companies, many of whom had working relationships with Gazprom. However, some European voices argued that the project went against the European Union’s security and foreign policy goals. Nord Stream 2 would allow Gazprom to bypass Ukraine as a gas transit country, threatening Ukraine’s economy and energy security. The European Union attempted to influence the project through new, supranational regulations meant to uphold transparency and competition in European gas markets. The beginning of the Ukraine crisis in 2014 significantly upped the stakes for Nord Stream 2, as some began to question Europe’s ability to meaningfully take action in the face of kinetic provocation. It was unclear whether pro- or anti-Nord Stream 2 actors would emerge successful, in a battle of wills that would have resonating consequences for Russia’s economy, the European Union’s legitimacy, and the emerging multipolar world order at large.
Keywords: Analysis; Business Ventures; Business Plan; Communication Strategy; Cost vs Benefits; Decisions; Trade; Energy; Energy Sources; Non-Renewable Energy; Geography; Global Range; Geopolitical Units; Country; Globalization; Cross-Cultural and Cross-Border Issues; Global Strategy; Globalized Economies and Regions; Globalized Firms and Management; Globalized Markets and Industries; Multinational Firms and Management; Government and Politics; Government Legislation; International Relations; National Security; Law; Contracts; Lawfulness; Laws and Statutes; Problems and Challenges; Relationships; Business and Government Relations; Business and Shareholder Relations; Risk and Uncertainty; Society; Public Opinion; War; Strategy; Business Strategy; Diversification; Expansion; Energy Industry; Utilities Industry; Russia; Europe; Germany; Poland; North and Central America; North America; United States;

Citation:
Abdelal, Rawi, Galit Goldstein, Cressida Arkwright, and Khilola Zakhidova. "Profits, Politics, and Pipelines: Europe, Russia, and the Challenge of Nord Stream 2 (A)." Harvard Business School Case 719-060, March 2019. View Details
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Article | Organizational Behavior and Human Decision Processes
Choice Architects Reveal a Bias Toward Positivity and Certainty
David P. Daniels and Julian Zlatev
Biases influence important decisions, but little is known about whether and how individuals try to exploit others’ biases in strategic interactions. Choice architects—that is, people who present choices to others—must often decide between presenting choice sets with positive or certain options (influencing others toward safer options) versus presenting choice sets with negative or risky options (influencing others toward riskier options). We show that choice architects’ influence strategies are distorted toward presenting choice sets with positive or certain options across thirteen studies involving diverse samples (executives, law/business/medical students, adults) and contexts (public policy, business, medicine). These distortions appear to primarily reflect decision biases rather than social preferences, and they can cause choice architects to use influence strategies that backfire.
Keywords: nudges; Biases; strategic decision making; social influence; Choice architects; choice architecture; Reflection effect; Certainty effect; Loss aversion; Decision Making; Risk and Uncertainty; Power and Influence;

Citation:
Daniels, David P., and Julian Zlatev. "Choice Architects Reveal a Bias Toward Positivity and Certainty." Organizational Behavior and Human Decision Processes 151 (March 2019): 132–149. View Details
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Book | 2019
Disciples of the State?: Religion and State-Building in the Former Ottoman World
Kristin Fabbe
As the Ottoman Empire crumbled, the Middle East and Balkans became the site of contestation and cooperation between the traditional forces of religion and the emergent machine of the sovereign state. Yet such strategic interaction rarely yielded a decisive victory for either the secular state or for religion. By tracing how state-builders engaged religious institutions, elites, and attachments, this book problematizes the divergent religion-state power configurations that have developed. There are two central arguments. First, states carved out more sovereign space in places like Greece and Turkey, where religious elites were integral to early centralizing reform processes. Second, region-wide structural constraints on the types of linkages that states were able to build with religion have generated long-term repercussions. Fatefully, both state policies that seek to facilitate equality through the recognition of religious difference and state policies that seek to eradicate such difference have contributed to failures of liberal democratic consolidation.
Keywords: Ottoman Empire; secularism; state-building; Religion; Governing Rules, Regulations, and Reforms; History; Turkey; Greece; Middle East;

Citation:
Fabbe, Kristin. Disciples of the State?: Religion and State-Building in the Former Ottoman World. Cambridge University Press, 2019. View Details
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Case | HBS Case Collection | February 2019
India: State Capacity and Unity in Diversity
Alberto Cavallo, Matthew Weinzierl and Robert Scherf
As 2018 drew to a close, India prepared to once again carry out the largest democratic exercise in human history, as in less than six months more than 850 million eligible voters would have the chance to choose their representatives to the Lok Sabha—the country’s lower house of parliament—and, thus, their country’s Prime Minister and cabinet.[i] The election would pit the ruling party—the Bharatiya Janata Party (Indian People’s Party, known as the BJP) led by Prime Minister Narendra Modi—against a collection of parties that included the once-dominant Indian National Congress party (Congress). The 2019 elections would serve as a referendum on Modi’s first term in office and, therefore, on a high stakes question: had India’s implausibly robust democracy produced the right leader for the right moment, or had it taken the wrong path?
Keywords: Political Elections; Government and Politics; Public Opinion; India;

Citation:
Cavallo, Alberto, Matthew Weinzierl, and Robert Scherf. "India: State Capacity and Unity in Diversity." Harvard Business School Case 719-061, February 2019. View Details
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Case | HBS Case Collection | February 2019
Extend Fertility: Conceiving the Market for Egg Preservation (A)
Debora L. Spar and Olivia Hull
In April 2003, entrepreneur and MBA student Christy Jones was planning a new venture to help women preserve their fertility. Her company, Extend Fertility, would commercialize a technique known as egg freezing, in which a woman’s eggs were extracted and stored at low temperatures until she was ready to become a mother. To date, the emerging technology had mostly been used to preserve the fertility of cancer patients whose treatment course could damage their eggs. Jones’s business would target a massively broader population: healthy women wishing to postpone motherhood. Before Jones could launch Extend Fertility, she needed to answer two pressing questions. What, exactly, would an egg-freezing service be selling? And to whom?
Keywords: Assisted reproduction; entrepreneur; health and wellness; fertility; infertility; Women's health; Creating markets; egg freezing; fertility clinic; Strategy; Demographics; Gender; Entrepreneurship; Health Care and Treatment; Innovation and Invention; Marketing; Science; Technology; Innovation Strategy; Technological Innovation; Commercialization; Science-Based Business; Marketing Strategy; Business Plan; Product Marketing; Product Launch; Product Positioning; Mission and Purpose; Personal Development and Career; Social Issues; Integration; Health; Ethics; Health Industry; United States;

Citation:
Spar, Debora L., and Olivia Hull. "Extend Fertility: Conceiving the Market for Egg Preservation (A)." Harvard Business School Case 719-019, February 2019. View Details
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Working Paper | HBS Working Paper Series | 2019
Strict ID Laws Don't Stop Voters: Evidence from a U.S. Nationwide Panel, 2008–2016
Enrico Cantoni and Vincent Pons
U.S. states increasingly require identification to vote—an ostensive attempt to deter fraud that prompts complaints of selective disenfranchisement. Using a difference-in-differences design on a 1.3-billion-observations panel, we find the laws have no negative effect on registration or turnout overall or for any group defined by race, gender, age, or party affiliation. These results hold through a large number of specifications and cannot be attributed to mobilization against the laws, measured by campaign contributions and self-reported political engagement. ID requirements have no effect on fraud either—actual or perceived. Efforts to improve elections may be better directed at other reforms.
Keywords: Voting; Identity; Laws and Statutes; Outcome or Result; United States;

Citation:
Cantoni, Enrico, and Vincent Pons. "Strict ID Laws Don't Stop Voters: Evidence from a U.S. Nationwide Panel, 2008–2016." NBER Working Paper Series, No. 25522, February 2019. (Also Harvard Business School Working Paper, No. 19-076, February 2019.) View Details
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Working Paper | HBS Working Paper Series | 2019
The Consequences of Invention Secrecy: Evidence from the USPTO Patent Secrecy Program in World War II
Daniel P. Gross
This paper studies the effects of the USPTO's patent secrecy program in World War II, under which approximately 11,200 U.S. patent applications were issued secrecy orders which halted examination and prohibited inventors from disclosing their inventions or _ling in foreign countries. Secrecy orders were issued most heavily in areas important to the war effort { such as radar, electronics, and synthetic materials { and nearly all rescinded at the end of the war. I find that compulsory invention secrecy was effective at keeping affected technology out of the public domain, but it appears to have reduced and delayed follow-on invention, restricted commercialization, and temporarily hampered post-war entry into patenting. The results shed light on the consequences of invention secrecy, which is widely used by inventors to protect and appropriate the returns to innovation, and yield lessons for ongoing policy debates over potential measures to protect U.S. invention against the growing incidence of foreign IP theft today.
Keywords: Invention secrecy; invention disclosure; trade secrecy; secrecy orders; patents; cummulative innovation; commercialization; Wold War 2; Patents; National Security; History; Innovation and Invention; Outcome or Result; Intellectual Property; Policy; United States;

Citation:
Gross, Daniel P. "The Consequences of Invention Secrecy: Evidence from the USPTO Patent Secrecy Program in World War II." Harvard Business School Working Paper, No. 19-090, February 2019. (Revised March 2019.) View Details
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Working Paper | HBS Working Paper Series | 2019
Calculators for Women: When Identity Appeals Provoke Backlash
Tami Kim, Kate Barasz, Leslie John and Michael I. Norton
From “Chick Beer” to “Dryer sheets for Men,” identity-based labeling is frequently deployed to appeal to people who hold the targeted identity. However, five studies demonstrate that identity appeals can backfire, alienating the very individuals they aim to attract. We begin by demonstrating backlash against identity appeals in the field during the 2016 presidential election (Study 1) and in the lab (Study 2). This (in)effectiveness of identity appeals is driven by categorization threat—feeling unwillingly reduced to a single identity—which is induced when a) the identity deployed is that of a typically marginalized group (Studies 3-4) and b) the appeal evokes a stereotype about that identity (Study 5). Ironically, identity appeals often drive identity-holders away from options they would have preferred in the absence of that appeal.
Keywords: identity; Identity; Labels; Gender; Perception;

Citation:
Kim, Tami, Kate Barasz, Leslie John, and Michael I. Norton. "Calculators for Women: When Identity Appeals Provoke Backlash." Harvard Business School Working Paper, No. 19-086, February 2019. View Details
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Working Paper | HBS Working Paper Series | 2019
Mitigating the Negative Effects of Customer Anxiety Through Access to Human Contact
Michelle A. Shell and Ryan W. Buell
It is a well-established result in social psychology that when people feel anxious, they seek advice from others. However, increasingly companies that operate in high-anxiety settings (like financial services, health care, and education) are deploying self-service technologies (SSTs), through which anxious customers transact without human contact. The impact of customer anxiety on service relationships is neither well understood, nor consistently factored into service design. In this paper, two laboratory experiments and one field experiment, conducted in financial service contexts, document the negative effects of anxiety on customer choice satisfaction, firm trust, and long-term engagement and explore the impact of giving self-service consumers the option to interact with a person. Participants engaged in an online investing simulation who are made to feel anxious due to market downturns are less satisfied with their choices and report lower levels of trust in the firm. Providing participants with the opportunity to interact with an expert, or even another participant, dampens anxiety’s negative effects on choice satisfaction and, by extension, firm trust. Interestingly, we find that very few participants who are offered the option to interact with a person take advantage of the opportunity, which is consistent with the idea that it is the mere availability of human contact that mitigates anxiety’s deleterious effects. Finally, in a field experiment conducted with a credit union’s self-service term loan approval process, the incorporation of access to human contact increased customer loan acceptance by 16%, suggesting that access to human contact can improve long-term service engagement.
Keywords: Anxiety; Customers; Emotions; Service Delivery; Interpersonal Communication; Customer Satisfaction; Trust;

Citation:
Shell, Michelle A., and Ryan W. Buell. "Mitigating the Negative Effects of Customer Anxiety Through Access to Human Contact." Harvard Business School Working Paper, No. 19-089, February 2019. View Details
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Article | Strategic Management Journal | February 2019
Frame Flexibility: The Role of Cognitive and Emotional Framing in Innovation Adoption by Incumbent Firms
Ryan Raffaelli, Mary Ann Glynn and Michael Tushman
Why do incumbent firms frequently reject nonincremental innovations? Beyond technical, structural, or economic factors, we propose an additional factor: the degree of the top management team's (TMT) frame flexibility, i.e., their capability to cognitively expand an innovation's categorical boundaries and to cast the innovation as emotionally resonant with the organization's identity, competencies, and competitive boundaries. We argue that inertial forces generally constrict how TMTs perceive innovations, but that frame flexibility can overcome these constraints, increasing the likelihood of adoption and broadening the organization's innovation practices. We advance a theoretical model that relaxes the assumption that cognitive frames are static, showing how they become flexible via categorical positioning, and introduce a role for emotional frames that appeal to organizational members' sentiments and aspirations in innovation adoption.
Keywords: innovation adoption; cognition; framing; emotional resonance; incumbent inertia;

Citation:
Raffaelli, Ryan, Mary Ann Glynn, and Michael Tushman. "Frame Flexibility: The Role of Cognitive and Emotional Framing in Innovation Adoption by Incumbent Firms." Strategic Management Journal 40, no. 2 (February 2019). View Details
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