Person:

Gino, Francesca

Early research and teaching on ethics focused on either a moral development perspective or philosophical approaches, and used a normative approach by focusing on the question of how people should act when resolving ethical dilemmas. In this paper, we briefly describe the traditional approach to ethics and then present a (biased) review on the behavioral approach to ethics. We define behavioral ethics 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. By focusing on a descriptive rather than a normative approach to ethics, behavioral ethics is better suited than traditional approaches to address the increasing demand from society for a deeper understanding of what causes even good people to cross ethical boundaries.

Many written forms required by businesses and governments rely on honest reporting. Proof of honest intent is typically provided through signature at the end of the document, e.g., tax returns or insurance policy forms. Still, people sometimes cheat to advance their financial self-interests—at great costs to society. We test an easy-to-implement method to discourage dishonesty: signing at the beginning rather than at the end of a self-report, thereby reversing the order of the current practice. Using lab and field experiments, we find that signing before rather than after the opportunity to cheat makes ethics salient when it is needed most and significantly reduces dishonesty.

Research on ethics has focused on the factors that help individuals act ethically when they are tempted to cheat. However, we know little about how best to help individuals notice unethical behaviors in others and in themselves. This paper identifies a solution: instilling a mindset of vigilance. In an experiment, individuals playing the role of financial advisers recommended one of four possible investments to their clients. Unbeknown to these advisers, one of the funds under consideration was actually a fraudulent feeder fund of Madoff Investment Securities. Results from this empirical study demonstrate that instilling vigilance by asking individuals to indicate their suspicions prior to making a decision was critical to helping them notice fraudulent behavior and act on that information. In contrast, committing to a decision prior to contemplating suspicions precluded individuals from subsequently integrating critical information about the fund’s fraudulent activity. We extend these findings to other interventions aimed at helping managers notice unethical behavior.

Ethics research developed partly in response to calls from organizations to understand and solve unethical behavior. We examine two approaches to mitigating unethical behavior: (1) values-oriented approaches that broadly appeal to individuals’ preferences to be more moral, and (2) structure-oriented approaches that redesign specific incentives, tasks, and decisions to reduce temptations to cheat in the environment. This paper explores how these approaches can change behavior. We argue that integrating both approaches while avoiding incompatible strategies can reduce the risk of adverse effects that arise from taking a single approach and leverage the strengths of both approaches.