Wednesday, June 16, 2010

Dan Ariely: The Mind's Grey Areas -

I just got his second book, The Upside of Irrationality.  (the first was great and is used in class often)

In an example of good timing (probably not coincidental or irrational!).

Dan Ariely: The Mind's Grey Areas

"We have recently seen a number of big corporate frauds and stock market scandals. The question arises: is it just the case of a few bad apples or is it a deeper systemic problem? 

The answer, we've found, lies in conflicts of interest. What happens when you put good people in situations that create conflict? They usually succumb to temptation. You see it in everybody, be it politicians or businessmen. So, how do we understand these influences in order to prevent them?

In our experiments, we find that a lot of people cheat by just a little bit. In standard economics, cheating is supposedly a straight cost benefit analysis. People look at the odds of getting caught and the associated punishment, and then cheat when it makes sense to do so. However, in our experiments we find that people do not act strictly according to this model; they cheat only to the extent that they can continue to feel good about themselves and rationalize their action"

1 comment:

Anonymous said...

A business news ticker script would look great on this blog. Well...just so happens I know where to get a free one!! Have a great day!