Sunday, November 23, 2014

Daniel Little — How professionals think

The topic of how actors arrive at their choices and behavior has come up a number of times here. The rational choice model has been considered (link), and other, more pragmatist approaches to agency have been considered as well (link). Finally, a number of posts have considered the idea of character as a key determinant of action (link). 
A team of distinguished experimental economists have recently provided a different perspective from any of these on the subject of agency and action. Alain Cohn, Ernst Fehr, and Michel André Maréchal recently published a provocative piece in Nature that appears to show that a certain segment of white-collar professionals (bankers) make very different decisions about their actions depending on the “frame” within which they deliberate (link). If they are thinking within the everyday frame of personal life and leisure, their actions are as honest as anyone else’s. But if they are prompted to think within the frame of their professional environment, their actions become substantially less honest. That professional environment is the large international bank.… 
This is a striking set of findings for a number of reasons. First, it strongly suggests that there are strong markers and incentives within the social environment of the bank that lead its employees to behave in dishonest ways. There is something about working in and around a financial institution that appears to provoke dishonesty. This sounds like a "culture of workplace" kind of effect. It suggests perhaps that bankers are acculturated over an extended period of experience to possess traits of character and behavior that lead them to behave dishonestly.

But second, the data seem to refute the "culture and character" interpretation. The same set of experiments supports the finding that when these same individuals approach the coin-tossing task with a mental framework oriented towards everyday personal life, their choices revert to the generally honest behavior of the broader population. In other words, these findings do not support the idea that banking either recruits or creates dishonest people. Rather, the findings seem to imply that banking encourages dishonestbehavior within the specific framework of banking business and only while the workplace signals are salient.
Bill Black calls it a criminogenic environment. It's actually well known that institutional culture is highly influential on individual behavior, and that the culture is established by the leadership in that subordinate imitate superiors, regardless of whether this takes place intentionally or not. The buck stops in the corner office.

Understanding Society
How professionals think
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor


Anonymous said...

The headline is wrong. It should be "Bankers cheat". Or perhaps, "Bank and Trust -- Not!".

Anonymous said...

No, "Bankers cheat" is too much of a generalization. How about, "Bankers cheating", since the study is about when some of them do.