An introduction to behavioral ethics

A quarter of a century ago, as a young criminal defense lawyer, I began to be struck by how different the causes of many white collar crimes were from the then (and still) traditional view. The latter saw (sees) white collar crimes as based largely on rational calculations by profoundly bad individuals – what was then the Ivan Boesky model and now is best associated with Bernie Madoff.  Although there are certainly offenses of this sort, many of the crimes of which I became aware seemed based more on environmental factors than on the indelibly bad characters of those involved.  While the field did not exist at the time, this turned out to be my introduction to what was to become “behavioral ethics.” Fortunately, there are now more efficient (and less frustrating and stressful), ways of learning about the non-obvious causes of wrongdoing than practicing criminal law.

In “Behavioral Ethics: Toward a Deeper Understanding of Moral Judgment and Dishonesty” – a paper being published this month in the Annual Review of Law & Social Science  – Professors Max Bazerman     and Francesca Gino     of the Harvard Business School provide an excellent overview of this still new but rapidly developing approach to ethics. Among other things, their paper describes the:

– Pre-behaviorist approach to ethics, which was dominated by traditional schools of moral reasoning – particularly utilitarianism and deontology. As the authors note, these appear to be ill suited to actually promoting ethical behavior.

– Emergence of the behaviorist approach – one that is more descriptive rather than normative. They define this as the “study of systematic and predictable ways in which individuals make ethical decisions and judge the ethical decisions of others that are at odds with intuition and the benefits of the broader society.”

– Behaviorist research into some surprising aspects of intentional wrongdoing. Among other things, this research shows the remarkable extent to which individuals are likely to cross ethical boundaries due to various environmental factors, including but not limited to situational pressures or the actions of other individuals.  (For instance, a prior moral act can “license” a subsequent immoral one, which is indeed counterintuitive.).

– Behaviorist research into various forms of unknowing wrongdoing. Among the noteworthy findings here are that we are considerably more likely to recognize conflicts of interest in others than in ourselves; that we are more likely to ignore ethical degradation in others when it occurs slowly, rather than abruptly; and that the presence of intermediaries can impair our ability to recognize unethical behavior in others.

Important work of Professor Jonathan Haidt of NYU  in the area of moral intuitionism – a field distinct from but related to behavioral ethics, as it helps undercut the assumption that unethical behavior is necessarily the product of a deliberative process.

– Value of trying to bring what behaviorist pioneer (and Nobel prize winner) Daniel Kahneman, a professor at Princeton, calls “System 2”  thinking  –  meaning more deliberative forms of thought than the automatic forms of cognition (“System 1”) which are prevalent in our lives – to ethical decisions of consequence. As the authors note, this could lead to “profound differences in how we make ethical decisions.”

– Implications of behavioral ethics for different aspects of public policy, such as taking greater measures to ensure independence of auditors. (“Just as we do not trust the most honest parent to assess the brilliance of their child, we should not trust auditors to be independent when they have vast psychological reasons to fail in that objectivity.”)

Finally while the paper is not focused on compliance and ethics programs, I do think behavioral ethics can be useful in that area, too.  In this presentation at the recent SCCE annual conference,  I explore some of the possibilities in this regard, and here are a variety of other postings on that subject which do so in greater detail.


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