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Human Behavior & Decision-Making

Human Behavior & Decision-Making

    • 2014
    • Book

    The Power of Noticing: What the Best Leaders See

    By: 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.

    • 2014
    • Book

    The Power of Noticing: What the Best Leaders See

    By: 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...

    • 2014
    • Article

    Time, Money, and Morality

    By: 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.

    • 2014
    • Article

    Time, Money, and Morality

    By: 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...

    • Article

    Past, Present and Future Research on Multiple Identities: Toward an Intrapersonal Network Approach

    By: 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.

    • Article

    Past, Present and Future Research on Multiple Identities: Toward an Intrapersonal Network Approach

    By: 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...

    • March 2014
    • Article

    Cheating More for Less: Upward Social Comparisons Motivate the Poorly Compensated to Cheat

    By: 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.

    • March 2014
    • Article

    Cheating More for Less: Upward Social Comparisons Motivate the Poorly Compensated to Cheat

    By: 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...

    • 2014
    • Article

    Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men

    By: Alison Wood Brooks, Laura Huang, Sarah Kearney and Fiona 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.

    • 2014
    • Article

    Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men

    By: Alison Wood Brooks, Laura Huang, Sarah Kearney and Fiona 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...

    • 2014
    • Chapter

    Appetite, Consumption, and Choice in the Human Brain

    By: 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.

    • 2014
    • Chapter

    Appetite, Consumption, and Choice in the Human Brain

    By: 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...

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.

Recent Publications

Does Observability Amplify Sensitivity to Moral Frames? Evaluating a Reputation-Based Account of Moral Preferences

By: Valerio Capraro, Jillian J. Jordan and Ben Tappin
  • 2021 |
  • Working Paper |
  • Faculty Research
A growing body of work suggests that people are sensitive to moral framing in economic games involving prosociality, suggesting that people hold moral preferences for doing the “right thing”. What gives rise to these preferences? Here, we evaluate the explanatory power of a reputation-based account, which proposes that people respond to moral frames because they are motivated to look good in the eyes of others. Across four pre-registered experiments (total N = 9,601), we investigated whether reputational incentives amplify sensitivity to framing effects. Studies 1-3 manipulated (i) whether moral or neutral framing was used to describe a Trade-Off Game (in which participants chose between prioritizing equality or efficiency) and (ii) whether Trade-Off Game choices were observable to a social partner in a subsequent Trust Game. These studies found that observability does not significantly amplify sensitivity to moral framing. Study 4 ruled out the alternative explanation that the observability manipulation from Studies 1-3 is too weak to influence behavior. In Study 4, the same observability manipulation did significantly amplify sensitivity to normative information (about what others see as moral in the Trade-Off Game). Together, these results suggest that moral frames may tap into moral preferences that are relatively deeply internalized, such that the power of moral frames is not strongly enhanced by making the morally-framed behavior observable to others.
Keywords: Moral Preferences; Moral Frames; Observability; Trustworthiness; Trust Game; Trade-off Game; Moral Sensibility; Reputation; Behavior; Trust
Citation
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Capraro, Valerio, Jillian J. Jordan, and Ben Tappin. "Does Observability Amplify Sensitivity to Moral Frames? Evaluating a Reputation-Based Account of Moral Preferences." Working Paper, January 2021.

How Venture Capitalists Make Decisions

By: Paul A. Gompers, Will Gornall, Steven Kaplan and Ilya Strebulaev
  • March–April 2021 |
  • Article |
  • Harvard Business Review
For decades now, venture capitalists have played a crucial role in the economy by financing high-growth start-ups. While the companies they’ve backed—Amazon, Apple, Facebook, Google, and more—are constantly in the headlines, very little is known about what VCs actually do and how they create value. To pull the curtain back, Paul Gompers of Harvard Business School, Will Gornall of the Sauder School of Business, Steven N. Kaplan of the Chicago Booth School of Business, and Ilya A. Strebulaev of Stanford Business School conducted what is perhaps the most comprehensive survey of VC firms to date. In this article, they share their findings, offering details on how VCs hunt for deals, assess and winnow down opportunities, add value to portfolio companies, structure agreements with founders, and operate their own firms. These insights into VC practices can be helpful to entrepreneurs trying to raise capital, corporate investment arms that want to emulate VCs’ success, and policy makers who seek to build entrepreneurial ecosystems in their communities.
Keywords: Venture Capital; Investment; Decision Making
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Gompers, Paul A., Will Gornall, Steven Kaplan, and Ilya Strebulaev. "How Venture Capitalists Make Decisions." Harvard Business Review 99, no. 2 (March–April 2021).

Threadless: The Renewal of an Online Community

By: Shane Greenstein, Karim Lakhani and Christian Godwin
  • February 2021 |
  • Case |
  • Faculty Research
Threadless, an online apparel company and artist community which Jake Nickell founded in 2000, continued to maintain its status as a top company in the online apparel industry during its second decade. From 2010 to 2020, Threadless continued to operated its crowd-sourcing platform, while it transitioned away from traditional screen printing to a digital print-on-demand model. Concurrently, the company jettisoned its warehouse and built a worldwide network of manufacturers that could print and ship Threadless orders on demand. Threadless also launched a new platform called Artist Shops that allowed graphic artists to sell apparel in uniquely branded online stores, with the option of having Threadless manage their pricing and promotional events. The software Threadless developed to facilitate its manufacturing network and Artist Shops platform also led Threadless to increasingly view itself as a technology company performing intermediary services, rather than merely an online apparel company. The onset of the COVID-19 pandemic in 2020 accelerated the company’s transition, triggering the sale of Threadless’s office and a move to working from home. Nickell wondered what the next steps for the company should be.
Keywords: Business Model; Decision Making; Entrepreneurship; Innovation And Invention; Leading Change; Management; Marketing; Product Launch; Operations; Supply Chain; Distribution; Networks; Sales; Strategy; Adaptation; Technology; Software; Technology Platform; Apparel And Accessories Industry; Technology Industry; North America
Citation
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Greenstein, Shane, Karim Lakhani, and Christian Godwin. "Threadless: The Renewal of an Online Community." Harvard Business School Case 621-056, February 2021.

The Tulsa Massacre and the Call for Reparations

By: Mihir Desai, Ruth Page, Suzanne Antoniou and Leanne Fan
  • February 2021 |
  • Case |
  • Faculty Research
How should historic social injustices be addressed? Survivors of the 1921 Tulsa Massacre and their descendants, including Representative Regina Goodwin of Tulsa, believe they should be addressed through reparations and have consequently continued to push the government of Tulsa to pay reparations for the massacre. In 2020, after no direct reparations and largely symbolic governmental efforts, proponents of reparations wondered if that call would finally be answered. The upcoming centennial of the massacre, the resurgent Black Lives Matter movement, and discussions within the U.S. about reparations broadly have made the issue more salient. The case guides students to consider the specific issue of reparations for the Tulsa Massacre, the idea of reparations generally, and the use of reparations to respond to the effects of slavery and racist governmental policies in the U.S. The student also considers the role of business in responding to racial justice issues. The link to this multimedia case should be provided to students in advance as preparation for classroom case discussion.
Keywords: Decision Choices And Conditions; Costs And Consequences; Decisions; Judgment And Decision-making; Race; Fairness; Moral Sensibility; Values And Beliefs; Corporate Accountability; Corporate Governance; Policy; Governing Rules, Regulations, And Reforms; Government Legislation; Government And Politics; Government Administration; Lawsuit; Leading Change; Mission And Purpose; Corporate Social Responsibility And Impact; Conflict Resolution; Conflict Management; Motivation And Incentives; Perspective Taking; Prejudice; Bias; Civil Society Or Community; Social Issues; Decision Making; Cost Vs Benefits; Judgments; Race; Ethics; Fairness; Moral Sensibility; Governance; Corporate Accountability; Corporate Governance; Governing Rules, Regulations, And Reforms; Policy; Government And Politics; Government Legislation; History; Lawsuits And Litigation; Legal Liability; Oklahoma; Tulsa; United States
Citation
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Desai, Mihir, Ruth Page, Suzanne Antoniou, and Leanne Fan. "The Tulsa Massacre and the Call for Reparations." Harvard Business School Multimedia/Video Case 221-707, February 2021.

G.I. Joe Phenomena: Understanding the Limits of Metacognitive Awareness on Debiasing

By: Ariella S. Kristal and Laurie R. Santos
  • 2021 |
  • Working Paper |
  • Faculty Research
Knowing about one’s biases does not always allow one to overcome those biases— a phenomenon referred to as the G. I. Joe fallacy. We explore why knowing about a bias doesn’t necessarily change biased behavior. We argue that seemingly disparate G. I. Joe phenomenon biases fall into two main categories based on their cognitive architecture. Some biases are encapsulated— knowledge cannot affect a bias because the representations or emotions that give rise to the bias are informationally encapsulated. Encapsulated biases are the hardest to overcome since they are cognitively impenetrable by their very nature. In contrast, attentional biases are cognitively penetrable enough to be overcome through awareness, yet people still fall prey to such biases under conditions of distraction or limited attention during the moment of decision-making. We conclude by discussing the important implications these two discrete categories have for overcoming these biases and for debiasing efforts generally.
Keywords: Biases; Judgment; Decision-making; Nudge; Debiasing; Illusions; Prejudice And Bias; Decision Making; Behavior; Change
Citation
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Kristal, Ariella S., and Laurie R. Santos. "G.I. Joe Phenomena: Understanding the Limits of Metacognitive Awareness on Debiasing." Harvard Business School Working Paper, No. 21-084, January 2021.

Health Care Measurements That Improve Patient Outcomes

By: Robert S. Kaplan, Lara Jehi, Clifford Y. Ko, Andrea Pusic and Mary Witkowski
  • February 2021 |
  • Article |
  • NEJM Catalyst Innovations in Care Delivery
This article describes the challenges and solutions in determining whether a patient’s treatment has been successful. Such an assessment depends on multiple factors, including the patient’s pretreatment status; the qualifications of personnel performing the treatment; the treating facility’s infrastructure and culture; the use of evidence-based clinical processes; the baseline incidence of treatment complications; and, most challenging, the ability to measure the outcomes that matter to patients. Recent advances in IT and the development of validated measurement instruments now enable consistent collection and analysis of metrics that capture all the relevant dimensions of a patient’s treatment. These data can be mobilized for learning that improves clinical and administrative processes, optimization of care pathways, shared decision-making, accountability, and payment contracting. Providers can now have access to the tools and technology that allow them to be transparent about and accountable for the outcomes that their patients experience.
Keywords: Outcomes Measurement; Health Care And Treatment; Outcome Or Result; Measurement And Metrics
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Kaplan, Robert S., Lara Jehi, Clifford Y. Ko, Andrea Pusic, and Mary Witkowski. "Health Care Measurements That Improve Patient Outcomes." NEJM Catalyst Innovations in Care Delivery 2, no. 2 (February 2021).

The EU's Unsustainable Approach to Stakeholder Capitalism

By: Jesse M. Fried and Charles C.Y. Wang
  • Article |
  • Harvard Business Review Digital Articles
A recent report by the EU claims that investor-driven short-termism is encouraging firms to return cash rather than invest it, which reduces capital available for investment in growth. The authors show that the data behind the report do not support its claims and argue that if the EU implements the recommendations of the report, EU-listed firms will struggle to compete as decision-making slows up and capital gets allocated to questionable ventures.
Keywords: Short-termism; Sustainability; Capital; Investment; Decision Making; Business And Stakeholder Relations; European Union
Citation
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Fried, Jesse M., and Charles C.Y. Wang. "The EU's Unsustainable Approach to Stakeholder Capitalism." Harvard Business Review Digital Articles (January 29, 2021).

Measuring Employment Impact: Applications and Cases

By: Katie Panella and George Serafeim
  • 2021 |
  • Working Paper |
  • Faculty Research
Applying the Impact-Weighted Accounts Initiative’s employment impact methodology on eight leading companies, we document wide variability in employment impacts as a percentage of salaries paid, ranging between 59 and 80 percent. We identify opportunities for improvement and discuss transition plans for companies to create more positive employment impact. We conclude with a call for disclosure of Equal Employment Opportunity Commission EEO-1 reports, paid leave, childcare and healthcare benefits, which would greatly facilitate the comparable and reliable measurement of employment impact in the future.
Keywords: Impact Measurement; Employee Compensation; Employees; Labor; Accounting; Employees; Well-being; Diversity; Wages; Compensation And Benefits
Citation
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Panella, Katie, and George Serafeim. "Measuring Employment Impact: Applications and Cases." Harvard Business School Working Paper, No. 21-082, January 2021.

Aster DM Healthcare: Budgeting for a Crisis

By: V.G. Narayanan and Amy Klopfenstein
  • January 2021 |
  • Case |
  • Faculty Research
In April 2020, Alisha Moopen, Deputy Managing Director of Aster DM Healthcare, a network of clinics, hospitals, and pharmacies in the Middle East and India, must create her company’s budget for the 2021 fiscal year in light of the onset of Covid-19. The pandemic had forced Aster to indefinitely cancel elective procedures, which represented 70% of the company’s revenue. Meanwhile, materials costs increased as the Aster team had to procure enough personal protective equipment (PPE) to keep frontline staff safe from the virus, even as revenue from clinics and pharmacies declined. To offset the impact of the pandemic, Alisha and her team must decide whether to implement austerity measures, such as temporary salary decreases, whether to request temporary rent reductions from their landlords, and whether to renegotiate their debt covenants with their lenders. They must also decide what assumptions they can make about revenue: when elective procedures will resume, whether their new telehealth practice will gain traction, and when clinic and pharmacy revenue will recover.
Keywords: Decision Making; Decisions; Forecasting And Prediction; Judgments; Decision Choices And Conditions; Cost Vs Benefits; Budgets And Budgeting; Health Pandemics; Health Industry; Asia; India; United Arab Emirates; Dubai
Citation
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Narayanan, V.G., and Amy Klopfenstein. "Aster DM Healthcare: Budgeting for a Crisis." Harvard Business School Case 121-001, January 2021.

Snapp: Scaling Under Sanctions in Iran (A)

By: Meg Rithmire and Gamze Yucaoglu
  • January 2021 |
  • Case |
  • Faculty Research
"The case opens in November 2019 as Eyad Alkassar and Mahmoud Fouz, co-founders of Iran’s first and leading ride-hailing platform, Snapp, find out about Apple’s and Google’s decision to remove all Iranian apps from their respective application stores.
The case takes us through the founding story of Snapp in 2014 to how the company grew to reach two million daily rides in Iran servicing 30 million customers through its two million registered drivers in 100 cities in Iran. The case then goes into detail about how the removal of all Iran-based apps from application stores limited Snapp’s operations and its go-to-market channels. Next, the case chronicles how the co-founders focused on finding operational and technological solutions to minimize Snapp’s reliance on U.S. technology following the U.S.’ withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May 2018 and instating the secondary sanctions on Iran.
The case highlights the challenges of operating under sanctions and the different ways the co-founders try to find to keep Snapp alive in a market that had been out of reach for Western investors. In 2019, Snapp had become the largest Internet company in the Middle East yet it was increasingly difficult to navigate the operational hurdles. The co-founders could not help but think whether it was now time to reach out to major media outlets and launch a public relations campaign to create awareness around the unexpected decision that had put the very existence of many companies at risk, including Snapp’s. Alkassar and Fouz needed to weigh it against Snapp’s realities. The case then asks: Should they go public with their story, or would it be better to stay under the radar and focus on efficiency and sustainability of operations?"
Keywords: Sanctions; Change Management; Disruption; Volatility; Decision Choices And Conditions; Cross-cultural And Cross-border Issues; Government And Politics; International Relations; National Security; Risk Management; Crisis Management; Transportation Industry; Iran; Middle East
Citation
Educators
Related
Rithmire, Meg, and Gamze Yucaoglu. "Snapp: Scaling Under Sanctions in Iran (A)." Harvard Business School Case 721-020, January 2021.
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HBS Working Knowlege

    • 17 Dec 2020

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    • 06 Dec 2020

    'Repayment-by-Purchase' Helps Consumers to Reduce Credit Card Debt

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    • 13 Oct 2020

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Harvard Business Publishing

    • March 2014
    • Article

    Why China Can't Innovate

    By: Regina M. Abrami, William C. Kirby and F. Warren McFarlan
    • February 2021
    • Case

    The Tulsa Massacre and the Call for Reparations

    By: Mihir Desai, Ruth Page, Suzanne Antoniou and Leanne Fan
    • 2013
    • Book

    The Good Struggle: Responsible Leadership in an Unforgiving World

    By: Joseph L. Badaracco Jr.
→More Harvard Business Publishing
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