Ethics_Heuristics_Biases

Ethics_Heuristics_Biases - SENATE HALL ACADEMIC PUBLISHING...

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This article is protected by copyright. A licence has been granted to Minette E. Drumwright of the University of Texas at Austin to include it in a featured collection on Ethics in Advertising and is only available to the Aspen Institute’s CasePlace.org academic members to make 1 copy of the paper for personal use only. Apart from this licensed copy, none of the material protected by the copyright notice can be reproduced or used in any form either electronic or mechanical, including photocopying, recording or by any other information recording or retrieval system, without prior written permission from the owner(s) of the copyright. © 2004, Senate Hall Academic Publishing. This article appears in the Journal of Business Ethics Education (JBEE) Volume 1 Issue 1 2004, pps. 57-74. The paper has been peer reviewed by the editorial board of the JBEE. For further information on this textbookjournal please visit the Senate Hall Academic Publishing website at www.senatehall.com where you can subscribe to the journal, and/or order individual issues and /or individual articles. Teaching Ethics, Heuristics, and Biases Robert Prentice University of Texas at Austin Abstract. Although economists often model decision makers as rational actors, the heuristics and biases literature that springs from the work of Nobel Prize winner Daniel Kahneman and his late colleague Amos Tversky demonstrates that people make decisions that depart from the optimal model in systematic ways. These cognitive and behavioral limitations not only cause inefficient decision making, but also lead people to make decisions that are unethical. This article seeks to introduce a selected portion of the heuristics and biases and related psychological literature, to highlight its implications for ethical decision making, and to serve as the basis for a lecture that could inform students regarding these matters. If business actors are on guard against errors in their own decision making processes, perhaps they can avoid some of the ethical pitfalls that recently put Enron and so many other companies in the news. Keywords: attribution theory, behavioral psychology, biases, cognitive dissonance, decision theory, escallation of committment, ethics, framing effects, heuristics, overconfidence, rationality, self-serving bias, sunk costs. 1. Introduction Purely by happenstance I recently found myself at two separate functions sitting next to individuals who had been convicted of white collar crimes in high-profile scandals of the early 1990s. After each event, I described both men as “the nicest guy you’d ever want to meet.” And they certainly seemed to be. This led me to wonder why nice guys (and gals, like my students) break the law and violate ethical conventions. Certainly economists have modeled criminal activity as rational decision making involving the weighing of potential benefits of the crime against the potential punishments multiplied by the chance of detection (Posner, 1977). However, most people who
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This note was uploaded on 09/12/2011 for the course ADVERTISIN 101 taught by Professor Staff during the Spring '10 term at Temple.

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Ethics_Heuristics_Biases - SENATE HALL ACADEMIC PUBLISHING...

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