120-150words each QN. Total 450words maximum.
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planninganddecisionmakingch8class14.pptxJudgment in Managerial Decision Making 8e Chapter 8 Fairness and Ethics in Decision Making
Copyright 2013 John Wiley & Sons
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In-Group Favoritism
Favoring similar others
This may seems harmless, but it has the unintended consequence of indirect discrimination
Indirect discrimination
People are more likely to associate positive characteristics with in-group (groups they belong to) members than with out-group members.
People are more likely to punish unfair behavior when it is directed at demographically similar others than they are for demographically different others
People often regard the favors they do for in-group members as virtuous
In-group favoritism, is equivalent to punishing people for being different from you
yet helping people who are like us is viewed by society as a nice thing to do, while discriminating against those who are different is viewed as unethical
A vast line of literature exists suggesting that we tend to perform favors for similar others.
This tendency to help out people who are like us seems communal and harmless, but it has the unintended consequence of indirect discrimination.
People are less likely to associate positive characteristics with out-group members than with in-group members.
People are less likely to punish unfair behavior when it is directed at demographically different others than they are for demographically different others.
This tendency to indirectly discriminate against out-group members in favor of in-group members has important consequences.
African-Americans are more likely than Caucasians to have their loan applications denied when controlling for a variety of factors. One reason for this may be that predominately white loan officers are more likely to approve loans to unqualified whites who are similar to themselves than to equally unqualified blacks who are different from themselves.
Many schools admit legacies whose parents attended the university. A consequence of this practice is that less qualified applicants from privileged households with Ivy-League educated parents are more likely to be admitted to top universities than even more qualified applicants from less privileged households who lack the connections necessary to be admitted to top institutions.
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In-Group Favoritism
Consequences
Loans
African-Americans are more likely than Caucasians to have their loan applications denied.
This may be because white loan officers are more likely to approve loans to unqualified whites
Legacy admissions
Less qualified applicants from privileged households with Ivy-League educated parents are more likely to be admitted to top universities than even more qualified applicants from less privileged households who lack the connections necessary to be admitted to top institutions
A vast line of literature exists suggesting that we tend to perform favors for similar others.
This tendency to help out people who are like us seems communal and harmless, but it has the unintended consequence of indirect discrimination.
People are less likely to associate positive characteristics with out-group members than with in-group members.
People are less likely to punish unfair behavior when it is directed at demographically different others than they are for demographically different others.
This tendency to indirectly discriminate against out-group members in favor of in-group members has important consequences.
African-Americans are more likely than Caucasians to have their loan applications denied when controlling for a variety of factors. One reason for this may be that predominately white loan officers are more likely to approve loans to unqualified whites who are similar to themselves than to equally unqualified blacks who are different from themselves.
Many schools admit legacies whose parents attended the university. A consequence of this practice is that less qualified applicants from privileged households with Ivy-League educated parents are more likely to be admitted to top universities than even more qualified applicants from less privileged households who lack the connections necessary to be admitted to top institutions.
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Implicit Attitudes
Most people think of their attitudes as being within the scope of their conscious awareness and under their control
Unconscious prejudice
A plethora of evidence suggest that when we meet someone, our minds automatically activate stereo- types of the person’s race, sex, and age
We are more likely to respond to aggression after seeing a black face than after seeing a white face.
participants in an experiment work on a boring computer task. Meanwhile, the computers flashed subliminal images of either white or black faces, so quickly that participants were not consciously aware of them.
When the computers “broke down” and the participants were informed that their work had been lost, those who had been shown black faces responded with significantly more aggression than those shown white faces, consistent with the common stereotype of African Americans as aggressive and violent
The automatic activation of stereotypes tends to make whites uncomfortable in interracial interactions.
We require conscious effort that is cognitively taxing in order to suppress our negative racial stereotypes.
Overall, there is a plethora of evidence suggesting that we hold implicit attitudes favoring some demographic groups over others.
We are more likely to respond to aggression after seeing a black face than after seeing a white face.
The automatic activation of stereotypes tends to make whites uncomfortable in interracial interactions.
We require conscious effort that is cognitively taxing in order to suppress our negative racial stereotypes.
The IAT is one tool commonly used to assess implicit attitudes.
It involves categorizing items as quickly as possible. For example, a black face may appear and then you may subsequently have to categorize words by indicating whether they are “good” or “bad”.
For example, the more quickly you accurately associate “good” words to white faces relative to black faces, the greater the extent you are considered to have pro-white implicit attitudes.
Though the IAT seems like a strange way to predict actual behavior, it actually has been demonstrated to predict observable behaviors.
People who tend to associate women with communal traits implicitly tend to consider ambitious women as lacking social skills.
Implicit attitudes are associated with nonverbal behaviors towards different groups of people.
Implicit attitudes tend to predict our spontaneous behaviors while they do not predict more deliberative behaviors very well.
One way that we may reduce our implicit biases that favor particular social groups is by lowering prejudice in society as a whole. For example, one study found that after Barack Obama’s election, people became less prejudiced towards blacks than they were before his election. A reason for this may be that he provides a salient positive exemplar of African-Americans.
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Implicit Attitudes
The Implicit Associations Test, or IAT
One tool commonly used to assess implicit attitudes
It involves categorizing items as quickly as possible.
For example, a black face may appear and then you may subsequently have to categorize words by indicating whether they are “good” or “bad”.
Conducted in several rounds. In some, test takers must assign good to white faces, and bad to black faces; while in other rounds, the test taker must do the opposite
For example, the more quickly you accurately associate “good” words to white faces relative to black faces, the greater the extent you are considered to have pro-white implicit attitudes
Overall, there is a plethora of evidence suggesting that we hold implicit attitudes favoring some demographic groups over others.
We are more likely to respond to aggression after seeing a black face than after seeing a white face.
The automatic activation of stereotypes tends to make whites uncomfortable in interracial interactions.
We require conscious effort that is cognitively taxing in order to suppress our negative racial stereotypes.
The IAT is one tool commonly used to assess implicit attitudes.
It involves categorizing items as quickly as possible. For example, a black face may appear and then you may subsequently have to categorize words by indicating whether they are “good” or “bad”.
For example, the more quickly you accurately associate “good” words to white faces relative to black faces, the greater the extent you are considered to have pro-white implicit attitudes.
Though the IAT seems like a strange way to predict actual behavior, it actually has been demonstrated to predict observable behaviors.
People who tend to associate women with communal traits implicitly tend to consider ambitious women as lacking social skills.
Implicit attitudes are associated with nonverbal behaviors towards different groups of people.
Implicit attitudes tend to predict our spontaneous behaviors while they do not predict more deliberative behaviors very well.
One way that we may reduce our implicit biases that favor particular social groups is by lowering prejudice in society as a whole. For example, one study found that after Barack Obama’s election, people became less prejudiced towards blacks than they were before his election. A reason for this may be that he provides a salient positive exemplar of African-Americans.
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Implicit Attitudes
The IAT reveals the relative strength of implicit attitude but not their absolute strength
It cannot reveal whether or not someone is racist, sexist, and so on. Rather, it measures the strength of an individual’s implicit association between two pairs of categories(4 categories in total) , such as White/Black and Good/Bad
For example, if the test reveals that you associate good with white, it does not mean that you love white and hate black. It only means that you love both, but favor the whites a bit more
Overall, there is a plethora of evidence suggesting that we hold implicit attitudes favoring some demographic groups over others.
We are more likely to respond to aggression after seeing a black face than after seeing a white face.
The automatic activation of stereotypes tends to make whites uncomfortable in interracial interactions.
We require conscious effort that is cognitively taxing in order to suppress our negative racial stereotypes.
The IAT is one tool commonly used to assess implicit attitudes.
It involves categorizing items as quickly as possible. For example, a black face may appear and then you may subsequently have to categorize words by indicating whether they are “good” or “bad”.
For example, the more quickly you accurately associate “good” words to white faces relative to black faces, the greater the extent you are considered to have pro-white implicit attitudes.
Though the IAT seems like a strange way to predict actual behavior, it actually has been demonstrated to predict observable behaviors.
People who tend to associate women with communal traits implicitly tend to consider ambitious women as lacking social skills.
Implicit attitudes are associated with nonverbal behaviors towards different groups of people.
Implicit attitudes tend to predict our spontaneous behaviors while they do not predict more deliberative behaviors very well.
One way that we may reduce our implicit biases that favor particular social groups is by lowering prejudice in society as a whole. For example, one study found that after Barack Obama’s election, people became less prejudiced towards blacks than they were before his election. A reason for this may be that he provides a salient positive exemplar of African-Americans.
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Implicit Attitudes
Implicit attitudes predict actual behavior
Females and social skills
People who tend had strong implicit attitudes connecting women with common traits implicitly (e.g. helpful) tend to consider ambitious women as lacking social skills
Implicit attitudes are associated with nonverbal behaviors towards different groups of people
Implicit attitudes tend to predict our spontaneous behaviors while explicit attitudes predict more deliberative behaviors very well
Lowering prejudice in society could be a solution
For example, after Barack Obama’s election, people became less prejudiced towards blacks than they were before his election. A reason for this may be that he provides a salient positive exemplar of African-Americans
Though the IAT seems like a strange way to predict actual behavior, it actually has been demonstrated to predict observable behaviors.
People who tend to associate women with communal traits implicitly tend to consider ambitious women as lacking social skills.
Implicit attitudes are associated with nonverbal behaviors towards different groups of people.
Implicit attitudes tend to predict our spontaneous behaviors while they do not predict more deliberative behaviors very well.
One way that we may reduce our implicit biases that favor particular social groups is by lowering prejudice in society as a whole. For example, one study found that after Barack Obama’s election, people became less prejudiced towards blacks than they were before his election. A reason for this may be that he provides a salient positive exemplar of African-Americans.
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Prescription Drug Prices
Imagine that a major pharmaceutical company is the sole marketer of a particular cancer drug. The drug is not profitable, due to high fixed costs and a small market size, yet the patients who do buy the drug depend on it for their survival. The pharmaceutical company currently produces the drug at a total cost of $5/pill and only sells it for $3/pill. A price increase is unlikely to decrease use of the drug, but will impose significant hardship on many users.
How ethical would it be for the company to raise the price of the drug from $3/pill to $9/pill?
Take a moment to consider this scenario.
Most people consider it unethical for the company to raise its prices and impose hardship on those who depend on it.
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Prescription Drug Prices
Now imagine that, instead of raising the price, the company sold the rights to produce the drug to a smaller, lesser-known pharmaceutical company. At a meeting between the two companies, a young executive from the smaller firm says: “Since our reputation is not as critical as yours, and we are not in the public’s eye, we can raise the price five fold to $15/pill.”
Would selling the manufacturing and marketing rights to the other firm be more or less ethical?
Now, consider this adapted version of the scenario.
In this case, the company is not directly raising the price, but is doing it indirectly by selling production rights to a relatively unknown company.
Additionally, the price will ultimately raise to $7 higher that in the previous scenario.
Despite the higher price, due to the indirect nature of the price increase, people believe that this outcome is more fair than the previous outcome.
However, when people are asked to evaluate this scenario and the prior scenario jointly, they tend to believe that this outcome is more unfair than the previous outcome.
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Prescription Drug Prices
When evaluating each of these two options individually, participants found it more unethical to raise the drug price to $9 per pill than to sell off the product to another firm
When asked to compare the two options, they found the behavior that led to a $15 per pill price to be more unethical.
People typically observe only one behavior at a time rather than comparing and contrasting two options
Now, consider this adapted version of the scenario.
In this case, the company is not directly raising the price, but is doing it indirectly by selling production rights to a relatively unknown company.
Additionally, the price will ultimately raise to $7 higher that in the previous scenario.
Despite the higher price, due to the indirect nature of the price increase, people believe that this outcome is more fair than the previous outcome.
However, when people are asked to evaluate this scenario and the prior scenario jointly, they tend to believe that this outcome is more unfair than the previous outcome.
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Indirectly Unethical Behavior
Impression management
Protection of self-perceptions
People who carry out such “indirect unethical behavior” may do so as much to protect their self-perceptions as ethical individuals
As suggested by the prior examples, one important aspect of indirect behavior is that it allows people to manage the impressions that others form of them. A study finding that people are more likely to sacrifice $1 than to allocate the entire pie of money to themselves in a dictator game so that they can prevent their counterpart from knowing that they had received an unequal allocation.
People also go through great lengths to protect their perception of themselves as ethical individuals.
One study found that people will keep themselves ignorant about the economic outcomes of others when they have the opportunity to select an option that is in their economic best interest. This probably allowed participants to feel that any potential harm to others was indirectly caused by them since they did not have a conscious awareness of others’ payoffs.
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Indirectly Unethical Behavior
Participants in a study played a peculiar dictator game in which half of them had to choose between two options. One option gave them $5 and the other person $5. The second option gave them $6 but gave the other person $1.
Participants in the “baseline” condition had all of this information. 74% of them chose the first option over the second option, giving an equal $5 payment to each player.
By contrast, participants in the “hidden payoff” condition saw that the first option would pay them $5 and that the second option would pay them $6; however, they would have to click on a box to learn what the consequence of their decision would be for the other party.
Half of these participants chose not to click, and chose option 2
Remaining willfully ignorant of the larger consequences of their choices allowed them to choose selfishly
As suggested by the prior examples, one important aspect of indirect behavior is that it allows people to manage the impressions that others form of them. A study finding that people are more likely to sacrifice $1 than to allocate the entire pie of money to themselves in a dictator game so that they can prevent their counterpart from knowing that they had received an unequal allocation.
People also go through great lengths to protect their perception of themselves as ethical individuals.
One study found that people will keep themselves ignorant about the economic outcomes of others when they have the opportunity to select an option that is in their economic best interest. This probably allowed participants to feel that any potential harm to others was indirectly caused by them since they did not have a conscious awareness of others’ payoffs.
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Indirectly Unethical Behavior
Participants in another study had a choice: either (1) play a standard dictator game in which they could allocate $10 between themselves and another person who would know about the game and their choice, or (2) exit the game silently and receive $9, knowing that the other person would receive nothing and would never even know about the existence of the game.
Roughly one third of participants took the “silent exit” option, a choice that is difficult to justify as rational,
As a self-interested person should play the standard dictator game and simply allocate the entire $10 to himself or herself
The people who chose the $9 silent exit apparently wanted to behave selfishly but felt more comfortable doing so when they could keep their selfishness secret
As suggested by the prior examples, one important aspect of indirect behavior is that it allows people to manage the impressions that others form of them. A study finding that people are more likely to sacrifice $1 than to allocate the entire pie of money to themselves in a dictator game so that they can prevent their counterpart from knowing that they had received an unequal allocation.
People also go through great lengths to protect their perception of themselves as ethical individuals.
One study found that people will keep themselves ignorant about the economic outcomes of others when they have the opportunity to select an option that is in their economic best interest. This probably allowed participants to feel that any potential harm to others was indirectly caused by them since they did not have a conscious awareness of others’ payoffs.
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