Stern Business Fall / Winter 2009

Page 28

By Mary C. Kern and Dolly Chugh

BAD BEHAVIOR People act more unethically when facing a possible loss than the opportunity of a gain

ven ordinary people are prone to shocking ethical lapses. As the empirical study of ethics has surged in the past two decades, clear evidence has emerged that ethical thinking and behavior are prone to many of the same mental processes and pitfalls as the rest of human thinking and behavior. Just as we humans are prone to systematic and predictable cognitive errors, we appear to be prone to systematic and predictable ethical errors. This tendency seems ingrained. Earlier research with patients who incurred brain damage suggested that visceral, automatic flashes of affect guide moral choices, independent of learned knowledge about morality. Indeed, neuroscientific data has illustrated that the areas of the brain tooled for cognitive reasoning and those generating more automatic responses were both activated during moral decision-mak-

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ing. Similarly, it has been posited that moral intuition precedes moral reasoning, and that one’s overall moral judgment is heavily biased towards the leanings of a rapid and automatic process, rather than a slower, more thoughtful one. In our study, we explored the effect of this apparent reflex tendency on the consciousness and behavior of decision-makers in the moment of ethical choice. What is the role of the decision-maker’s cognitive framing of the situation vis-à-vis the time he may have to make a decision? We turned to the concept of framing as the foundation of our inquiry. In our

case, a framing effect occurs when objectively identical situations generate dramatically different decisions based on whether they are presented, or perceived, as potential losses or gains. It has been shown that people are lossaverse; that is, they are willing to go to greater lengths to avoid a loss than to obtain a similarly sized gain. We considered the implications of framing effects for ethics. When making decisions, individuals often choose from an array of possible responses, with some choices being more or less ethical than others. Our study showed an “ethical framing effect”, such that individuals who perceive a potential outcome as a loss will go to greater lengths, and engage in more unethical behavior, such as using insider information or lying, to avert that loss than individuals perceiving a similarly sized gain.


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