If it’s difficult to pronounce, it might not be risky: The effect of fluency on judgment of risk does not generalize to new stimuli

Processing fluency is used as a basis for various types of judgment. For example, previous research has shown that people judge food additives with names that are more difficult to pronounce (i.e., that are disfluent) to be more harmful. We explored the possibility that the association between disfluency and perceived harmfulness might be in the opposite direction for some categories of stimuli. Although we found some support for this hypothesis, an improved analysis and further studies indicated that the effect was strongly dependent on the stimuli used. We then used stimulus sampling and showed that the original association between fluency and perceived safety was not replicable with the newly constructed stimuli. We found the association between fluency and perceived safety using the newly constructed stimuli in a final study, but only when pronounceability was confounded with word length. The results cast doubt on generalizability of the association between pronounceability and perceived safety and underscore the importance of treating stimulus as a random factor.

Citation: Bahník, Š., & Vranka, M. (2017). If it’s difficult to pronounce, it might not be risky: The effect of fluency on judgment of risk does not generalize to new stimuli. Psychological Science

Is Behavioral Ethics Ready for Giving Business and Policy Advice?

This essay is a critical perspective of the applicability of behavioral ethics in business and policy interventions. I summarize a series of proposed interventions to increase people’s honesty, inspired by ethical dissonance theory, such as increasing salience of moral norms, visibility, and self-engagement. Although I agree that behavioral ethics could offer simple, low-cost interventions with the potential of reducing unethical behavior (not only) in organizations, there are several risks and methodological limitations not sufficiently discussed. The interventions thus could eventually lead to weaker positive impacts or even long-term negative consequences. I suggest several alternative approaches to decrease dishonesty such as making the moral choice easier, implementing salient accountability, and removing dishonesty temptations and dishonest employees. The article concludes with a warning that unrealistic expectations may damage the credibility of behavioral ethics.

Citation: Houdek, P. (2017). Is Behavioral Ethics Ready for Giving Business and Policy Advice? Journal of Management Inquiry. ISSN: 1056-4926. doi: 10.1177/1056492617712894

A Perspective on Research on Dishonesty: Limited External Validity Due to the Lack of Possibility of Self-Selection in Experimental Designs

The aim of this perspective article is to show that current experimental evidence on factors influencing dishonesty has limited external validity. Most of experimental studies is built on random assignments, in which control/experimental groups of subjects face varied sizes of the expected reward for behaving dishonestly, opportunities for cheating, means of rationalizing dishonest behavior etc., and mean groups’ reactions are observed. The studies have internal validity in assessing the causal influence of these and other factors, but they lack external validity in organizational, market and other environments. If people can opt into or out of diverse real-world environments, an experiment aimed at studying factors influencing real-life degree of dishonesty should permit for such an option. The behavior of such self-selected groups of marginal subjects would probably contain a larger level of (non)deception than the behavior of average people. The article warns that there are not many studies that would enable self-selection or sorting of participants into varying environments, and that limits current knowledge of the extent and dynamics of dishonest and fraudulent behavior. The article focuses on suggestions how to improve dishonesty research, especially how to avoid the experimenter demand bias.

Citation: Houdek, P. (2017). A Perspective on Research on Dishonesty: Limited External Validity Due to the Lack of Possibility of Self-Selection in Experimental Designs.Frontiers in Psychology, 8(1566). doi: 10.3389/fpsyg.2017.01566

Registered Replication Report: Rand, Greene, & Nowak (2012)

In an anonymous 4-person economic game, participants contributed more money to a common project (i.e., cooperated) when required to decide quickly than when forced to delay their decision (Rand, Greene & Nowak, 2012), a pattern consistent with the social heuristics hypothesis proposed by Rand and colleagues. The results of studies using time pressure have been mixed, with some replication attempts observing similar patterns (e.g., Rand et al., 2014) and others observing null effects (e.g., Tinghög et al., 2013; Verkoeijen & Bouwmeester, 2014). This Registered Replication Report (RRR) assessed the size and variability of the effect of time pressure on cooperative decisions by combining 21 separate, preregistered replications of the critical conditions from Study 7 of the original article (Rand et al., 2012). The primary planned analysis used data from all participants who were randomly assigned to conditions and who met the protocol inclusion criteria (an intent-to-treat approach that included the 65.9% of participants in the time-pressure condition and 7.5% in the forced-delay condition who did not adhere to the time constraints), and we observed a difference in contributions of -0.37 percentage points compared with an 8.6 percentage point difference calculated from the original data. Analyzing the data as the original article did, including data only for participants who complied with the time constraints, the RRR observed a 10.37 percentage point difference in contributions compared with a 15.31 percentage point difference in the original study. In combination, the results of the intent-to-treat analysis and the compliant-only analysis are consistent with the presence of selection biases and the absence of a causal effect of time pressure on cooperation.

Citation: Bouwmeester, S., Verkoeijen, P. P. J. L., Aczel, B.,… Houdek, P.,… Wollbrant, C. E. (2017). Registered Replication Report: Rand, Greene, & Nowak (2012). Perspectives on Psychological Science, 12(3), 527-542. doi:10.1177/1745691617693624

Rewards for Falling Off a Horse: Bad Corporate Governance Is Enabling Managers to Receive Pay for Luck

Source: http://houdekpetr.cz/%21data/papers/Houdek_2017.pdf

Citation: Houdek, P. (2017). Rewards for Falling Off a Horse: Bad Corporate Governance Is Enabling Managers to Receive Pay for Luck. Organizational Dynamics. ISSN: 0090-2616. doi: 10.1016/j.orgdyn.2017.05.004

Professional Identity and Dishonest Behavior

This essay discusses the fraud triangle, or how factors such as opportunity to cheat, motivation to cheat or ability to rationalize or justify dishonest behavior lead to dishonesty. The fraud triangle is applied on behavior of professionals active in fields such as medicine, education, research and science or clergy. Evidence shows that even in these fields, which attract more altruistic individuals, the fraud triangle factors predicts emergence of behavior in breach of ethical standards. In the conclusion several measures for reducing dishonesty are discussed. Disciplines such as forensic economics or behavioral ethics are emphasized to provide wider variety of tools to detect and reduce dishonest behavior.

Citation: Houdek, P. (2017). Professional Identity and Dishonest Behavior. Society. ISSN: 0147-2011. doi: 10.1007/s12115-017-0132-y

Causality Illusion and Overconfidence in Predicting (Quasi)Stochastic Events

We argue that individuals systematically interpret sequences of events in a causal manner. The aim of this article is to show that people do so even if they are aware of the stochastic nature of the respective sequence. The bias can explain some anomalous behaviour of investors in financial markets. Small as well as professional investors may illusorily perceive causality of former random success and future yield. Laboratory experiments testing the interpretation of stochastically occurring events in financial designs as well as analyses of real trading data from financial markets confirm that investors indeed interpret (quasi)random events casually; they make incorrect predictions and they egocentrically allocate responsibility for their success. The causality illusion induces overconfidence, inefficient investment and risk seeking. In the conclusion, we discuss factors that may limit effects of the causality illusion and suggest future areas for research.

Citation: Houdek, P., Koblovský, P., Plaček, J., & Smrčka, L. (2017). Causality Illusion and Overconfidence in Predicting (Quasi)Stochastic Events. Acta Oeconomica Pragensia, 25(1), 51–63. doi: 10.18267/j.aop.568 [in Czech as: Iluze kauzality a nadměrná důvěra ve schopnost predikce (kvazi)náhodných finančních událostí:

Puppet Master: Possible Influence of the Parasite Toxoplasma gondii on Managers and Employees

The article reviews recent literature on the effects of host manipulation by the parasiteToxoplasma gondii (prevalent in about a third of the world’s population) on perception, cognition, and behavior of humans, and on the changes in their physical appearance and personality characteristics. I argue that the mind-affecting parasite paradigm offers many research opportunities for management sciences, especially for organizational psychology and neuroscience. The article summarizes the parasite’s physiological mechanisms of affecting the host; highlights important behavioral effects of the infection in humans; and speculates on the possible impacts on skills and careers of employees and managers, organizational dynamics, intercultural management, and gender work roles. The conclusion shows limitations of the presented speculations and possible directions for future research on Toxoplasma’s effect on organizational dynamics.

Citation: Houdek, P. (2017). Puppet Master: Possible Influence of the Parasite Toxoplasma gondii on Managers and Employees. Academy of Management Perspectives, 31(1), 63-81. doi: 10.5465/amp.2015.0163

Economics of sex: Cost benefit analysis

The article presents an application of the cost-benefit analysis to human sexual behavior. We suggest that an event or occasion which lowers the costs of sex – such as increasing free time, decreasing health risks of sexually transmitted diseases or lowering the probability of parenthood (or costs connected with parenthood) – usually leads to an increase in sexual activity. Although the reviewed studies concerning these effects confirm our predictions, findings are not robust, e.g. a vaccination against STDs does not always lead to an increase in sexual activity. In the conclusion, we make several socioeconomic recommendations resulting from the application of the economics of sex.

Citation: Houdek, P., & Koblovský, P. (2017). Economics of sex: Cost benefit analysis. Society, 54(1), 18-22. doi: 10.1007/s12115-016-0089-2

Behavioural economics of organization: Employees and managers

This short perspective article presents an overview of empirical evidence on the behavioural organizational economics on the basis of the extended standard model of worker’s behaviour. The advancements of behavioural economics theories, new detailed and structured data on actions of economic actors, and increasingly used fi elds experiments provide a strong basis for the creation of more precise and more robust models of the behaviour of employers and employees. In this article we analyse 4 stylized extensions of standard model of worker’s behaviour. Firstly, we give several examples of worker’s reference dependent decision-making. Secondly, we utilize Akerlof’s hypothesis on the relationship between an employer and an employee which is as predicted very reciprocal, similarly to the gifts exchange paradigm. We show that the more the employee thinks s/he is trusted by the employer, the harder and more effi ciently s/he works. Thirdly, we show several instances of the importance of extrinsic and intrinsic motivation in employees and how those two motivations interfere with each other and crowd each other out in some situations. The research shows that meaningfulness of the work can be a signifi cant driver of the employees’ effi ciency as well. In the last section devoted to employees we provide evidence on the impacts of relative performance compensation on cooperation, reciprocity, and sabotage in fi rms. The last part is devoted to analysing behavioural regularities of managers in their day-to-day decision-making. The overview briefly expands particularly on their over-optimism and on their possibly undeserved remuneration resulting from random events and market changes rather than from the managerial skills. The article concludes by proposing possible directions for further field research.

Citation: Houdek, P., & Koblovský, P. (2017). Behavioural economics of organization: Employees and managers. E&M Ekonomie a Management, 20(1), 4-15. doi: 10.15240/tul/001/2017-1-001