Business and Ethics Conference
May19-20, 2006
Presented by the Center for Business, Government, and Society

Organizer: David Austen-Smith

Conference Schedule

Friday, May 19, 2006
Time Presenter Title
12:30-1:30pm Lunch (Allen Center)
1:50-2:00pm Introductory remarks  
2:00-3:30pm Adam Galinsky The Interplay of Power and Culture: Implications for Organizations and Ethics
3:30-4:00pm Break
4:00-5:30pm Benoit Monin Protecting the Halo: The Importance of Maintaining a Moral Self-Image


Saturday, May 20, 2006
Time Presenter Title
9:00-10:30am Uri Gneezy Deception: The Role of Consequences
10:30-11:00am Break 
11:00-12:30am Maurice Schweitzer Promises and Lies: Restoring Violated Trust (PDF 173 KB)
Lunch: 12:30-1:30pm (Allen Center)
2:00-3:30pm Geoffrey Heal
Doing well by doing good? (PDF 218 KB)
Additional resource
(PDF 176 KB)
3:30-4:00pm Break 
4:00-5:30pm David Baron A Positive Theory of Moral Management, Social Pressure, and Corporate Social Performance (PDF 304 KB) 


Conference Topics and Presenters
Presenter Title
Robert Frank Why Is Consequentialist Moral Reasoning So Controversial?

Consequentialist moral theories identify the morally correct choice as the one that results in the best overall consequences.  Despite this criterion' s sensible ring, it remains deeply controversial.  Many critics object in principle, arguing that a choice may be immoral even though it leads to the best consequences on balance.   Here, I explore an alternative possibility, that although consequentialist theories in their simplest form might be attractive in principle, they might also suffer from serious implementation problems. 

The difficulty stems from the fact that consequentialist moral reasoning requires estimates of the costs and benefits of the relevant alternatives.  These estimates almost invariably involve considerable uncertainty, with the result that a broad range of values must be viewed as reasonable.  Evidence suggests that even people who are committed to doing the right thing have a natural tendency to exploit moral wriggle room, by employing estimates that favor their own interests.  There is a natural tendency, in other words, to estimate the personal benefits of an action at the high end of the reasonable range and to estimate the costs to others of the action at the low end of the reasonable range.  Social comparisons reinforce these biases, creating a dynamic that extends the range of estimates that neutral observers can defend as reasonable. 

The problem, in short, is that consequentialist moral reasoning may fail not because it is wrong in principle, but rather because of an inherent conflict of interest facing those who must estimate the relevant costs and benefits.  As a practical matter, consequentialism may not lead to the best results on balance.

Maurice Schweitzer Promises and Lies: Restoring Violated Trust
Trust is critical for effective negotiations, yet trust violations are common. Prior work has often assumed trust to be fragile—easily broken and difficult to repair. We investigate this proposition in a laboratory study and find that trust harmed by untrustworthy behavior can be effectively restored when individuals observe a consistent series of trustworthy actions. Trust harmed by the same untrustworthy actions and deception, however, never fully recovers—even when deceived participants receive a promise, an apology, and observe a consistent series of trustworthy actions. We also find that a promise to change behavior can significantly speed the trust recovery process, but prior deception harms the effectiveness of a promise in accelerating trust recovery. 
Ray Fisman
Geoffrey Heal

Vinay Nair
Doing well by doing good?
We try to develop and test econometrically an analytical framework for studying corporate social responsibility. We want to know why firms engage in CSR, what types of firms engage in CSR, and how it affects their competitive positions.
Benoit Monin Protecting the Halo: The Importance of Maintaining a Moral Self-Image
An often overlooked and important factor in moral behavior and judgment is one's moral self-image. Business actors may often be less influenced in their ethical behavior by lofty abstract reasoning akin to what is observed in classic moral dilemmas than by how they feel about their own morality at a given point in time. I will illustrate this possibility in the context of everyday moral issues, such as racial discrimination, and present experimental evidence suggesting that making people confident that they are a good people may paradoxically license them to do more problematic things than they would otherwise have (moral credentials). I will also show that the exemplary behavior of moral others, rather than be inspiring, can lead to resentment when it threatens one' s own moral self-image (moral rebels and do-gooder derogation). Based on this research, I will discuss how organizations might contribute to ethical business behavior, and how leaders might be able to serve as moral exemplars without eliciting backlash.
Adam Galinsky The Interplay of Power and Culture: Implications for Organizations and Ethics
This talk will explore how power and culture combine to drive goal directed behavior and affect how others are treated and viewed. Power increases goal directed behavior and attention. As a result the powerful take action and engage in assertive behaviors. The possession of power also alters the way that individuals think about others in two fundamental ways. First, power decreases the tendency to consider the goals and perspectives of others. Second, those in power tend to objectify others (to think about others in instrumental terms, as conduits and facilitators of goal completion). Power also makes people more like their personalities and their culture. As a result, culture appears to be a critical moderating variable in determining whether power leads to action and egocentric self focus vs. when it results in restraint and perspective-taking. In more interdependent cultures (e.g., East Asian), where relationships matter over independent achievement, power produces a sense of responsibility and other-regarding behavior and increases commitment to a Kantian Deontological as opposed to a Utilitarian approach to ethical reasoning.
Uri Gneezy Deception: The Role of Consequences
This paper studies the role of consequences in a person's decision to lie. The empirical findings are based on the results of an experiment with a deception game as well as questionnaire responses. The results provide direct evidence that lying is in itself costly, and it demonstrates that the likelihood of lying is increasing in one's potential gain, and decreasing in another's potential loss. This finding is inconsistent with the standard view that people only care about their own material payoffs, and with the view that telling the truth is a moral imperative. Rather, the decision to lie is a matter of weighing costs and benefits.