Category Archives: Thinking

Thinking

Ethnic Diversity Reduces “Groupthink,” Economic “Bubbles”

Despite progress in raising awareness about implicit bias and stereotypes, most people are less likely to trust recommendations and evaluations from people of different ethnic groups.

Sheen Levine

Sheen Levine

However, this bias may reduce the “herd mentality” that characterized price “bubbles” in U.S. housing and global financial markets, reported Columbia’s Sheen S. Levine, Evan P. Apfelbaum of MIT, Goethe University’s Mark Bernard, Texas A&M’s Valerie L. Bartelt, Edward J. Zajac of Northwestern, and University of Warwick’s David Stark.
They concluded that, “Diversity facilitates friction that enhances deliberation and upends conformity.”

Economic “bubbles” occur when the majority of traders, probably influenced by a type of  “groupthink,” set inaccurate prices.
This leads to a mismatch between market prices and true asset values.

Irving Janis

Irving Janis

Groupthink can occur when three conditions interact, according to Yale’s Irving Janis:

  • Group Cohesiveness
    • Deindividuation,” when group cohesiveness becomes more important than individual dissenting views,
  • Group Structure
    • Homogeneity of group’s social backgrounds and ideology,
    • Group insulation from feedback,
    • Lack of impartial leadership,
    • Lack of norms requiring systematic analysis and decision procedures,
  • Context
    • Stressful external threats,
    • Recent failures,
    • Decision-making difficulties,
    • Moral dilemmas.

      Scott E. Page

A wider range of viewpoints leads to less groupthink and more balanced decisions in a mathematical model developed by University of Michigan’s Scott E. Page and Lu Hong of Loyola University.

Diverse groups ran into fewer “dead ends” when they worked to develop solutions than homogenous groups comprised of individuals who tended to think similarly.

David A. Thomas

David A. Thomas

Likewise, additional experimental evidence by Georgetown’s David A Thomas and Robin J. Ely of Harvard confirmed that identity-diverse groups can outperform homogeneous groups.
Group errors depended on group member ability and member diversity, expressed in the formula:

Collective Accuracy = Average Accuracy + Diversity.

To test the impact of group diversity on market “bubbles,” Levine’s group constructed experimental markets in Singapore and Texas, USA, in which participants traded stocks to earn money.

Evan Apfelbaum

Evan Apfelbaum

More than 175 volunteers with backgrounds in business or finance were randomly-assigned to groups of six ethnically-homogeneous or ethnically- diverse participants.

Traders knew the ethnic composition of their groups, but they couldn’t communicate with each other.
In addition, their “trades” of dividend-paying stock during 10 rounds were anonymous.

Homogeneous groups set inflated selling prices, yet traders in those groups still bought the stock, resulting in increasing stock prices.

Mark Bernard

Mark Bernard

In contrast, traders in diverse groups refused inflated selling prices, so the stock price fell to approximately the price in an “ideal” market with “rational” traders.

When traders and other decision-makers come from similar ethnic, social, and attitudinal backgrounds, they tend to place undue confidence in others’ opinions, and tend not to subject them to rigorous analysis.

Valerie Bartelt

Valerie Bartelt

As a result, they may be more likely to accept prices and deals that deviate from actual underlying values.
Levine’s group concluded that “homogeneity…imbues people with false confidence in the judgment of coethnics, discouraging them from scrutinizing behavior.”

  • How do you mitigate “groupthink” in organizational decision-making?

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Confident Cluelessness = The Dunning-Kruger Effect + Ignorant Bliss

Stav Atir

Stav Atir

Most people overestimate their own expertise, and do not recognize their own incompetence.
It’s called the Dunning-Kruger effect and has been demonstrated for people’s overestimates of their skills in grammar, emotional intelligence, logical reasoning, firearm care and safety, debating, and financial acumen.

Emily Rosenzweig

Emily Rosenzweig

Cornell’s Stav Atir and  Emily Rosenzweig of Tulane asked volunteers if they were familiar with concepts like centripetal force and photon as well as fictitious terms including plates of parallax, ultra-lipid, and cholarine.

About 90% of participants claimed some knowledge of at least one of the nine fake concepts, and people who thought they were most knowledgeable also said they recognized more of the meaningless terms.

David Dunning

David Dunning

Atir and Rosenzweig concluded that poor performers lack insight about their lack of skill because they ”don’t know what they don’t know.”

Another study by University of California San Diego’s Elanor Williams, Justin Kruger of NYU, and Cornell’s David Dunning asked volunteers to complete a logical reasoning task, an intuitive physics problem, a financial acumen challenge.

Elanor Williams

Elanor Williams

Some participants achieved perfect scores and expressed confidence in their answers, yet those who achieved no correct answers expressed the same degree of confidence as the most able performers.

Both high and low achievers made judgments based on intuitive “rules,” so they felt confident based on having a clear rationale.
Williams’ team concluded, “Rule-based confidence is no guarantee of self-insight into performance.”

Justin Kruger

Justin Kruger

Another example is high confidence in financial acumen among people who filed for bankruptcy, suggesting that their confidence was not supported by their financial management skills.

More than 25,000 people rated their financial knowledge, completed the 2012 National Financial Capability Study, conducted by the Financial Industry Regulatory Authority with the U.S. Treasury.
Of these, 800 respondents said they filed bankruptcy within the previous two years.

Bankruptcy filers achieved financial knowledge scores in the lowest third of respondents, but they rated their knowledge more positively than financially-solvent respondents.
Nearly a quarter of the recently bankrupted respondents gave themselves the highest possible rating, whereas only 13 percent of other respondents were equally confident.

Deborah Keleman

Deborah Keleman

Even 80 professionally-credentialed physical scientists at top universities provided a number of inaccurate purpose-driven (“teleological”) explanations about “why things happen” in the natural world.

Joshua Rottman

Joshua Rottman

When these professional scientists provided explanations under time constraints, they were twice as likely to endorse inaccurate rationales, reported Boston University’s Deborah Kelemen, Joshua Rottman, and Rebecca Seston.

Rebecca Seston

Rebecca Seston

Scientists were equally likely as humanities scholars to endorse inaccurate arguments despite most physical scientists’ rejection of purpose-driven explanations for natural phenomena.

These results suggest that “teleological propositions are a default explanatory preference” among humans, and could explain their presence in myth and religion across cultures.

As a result, most people hold a positive view of their capabilities even when faced with contrary evidence.
However, some groups, such as women, may hold an unrealistically modest view of capabilities despite affirming feedback.
These biases in self assessment point to the importance of realistic recalibration of confidence, aligned with consensual feedback.

-*How do you minimize the risks of “Clueless Confidence”?

-*How can systematic underestimates of competence be reduced to increase “Realistic Confidence”?

Related Post:

Useful Fiction: Optimism Bias of Positive Illusions

Least Skillful Performers May Have Greatest Self-Delusions of Skill: Pointy-Haired Boss Effect

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Comparative Rankings May Reduce Gender Bias in Career Advancement

Iris Bohnet

Iris Bohnet

An “evaluation nudge” is a decision framing aid that may reduce biased judgments in hiring, promotion, and job assignments, according to Harvard’s Iris Bohnet, Alexandra van Geen, and Max H. Bazerman.

Alexandra van Geen

Alexandra van Geen

They recommended that organizations evaluate multiple employees simultaneously rather than each person independently.
This approach differs from “Stack Ranking” (“Rank and Yank”), advocated by GE’s Jack Welch and critiqued by many.

Multiple simultaneous evaluations are frequently used for hiring decisions, but less frequently when considering employee candidates for developmental job assignments and promotions.

Max Bazerman

Max Bazerman

Bazerman and Sally B. White, then of Northwestern with George F. Loewenstein of Carnegie Mellon demonstrated preference reversals between joint and separate evaluation.

George F. Loewenstein

George F. Loewenstein

Lack of comparison information in separate evaluation typically leads people to rely on internal referents as decision norms. These internal criteria may be biased preferences, according to Princeton’s Nobel laureate Daniel Kahneman and Dale T. Miller of Stanford.

Dale T. Miller

Dale T. Miller

Lack of comparative referents also can lead evaluators to rely on easily calibrated attributes, found University of Chicago’s Christopher K. Hsee.
Both of these mental shortcuts can systematically exclude members of under-represented groups.

Christopher K. Hsee

Christopher K. Hsee

Another problem is the “want/should” battle of emotions and preferences, outlined by Bazerman and Ann E. Tenbrunsel of Notre Dame, with Duke’s Kimberly A. Wade-Benzoni in their provocatively titled article, “Negotiating with Yourself and Losing.”

Ann E. Tenbrunsel

Ann E. Tenbrunsel

They argue that the want self” tends to dominate when deciding on a single option because there’s less information and less need to justify the decision.
In contrast, the more analytic “should self” is activated by the need to explain decision rationales.

Kimberly Wade-Benzoni

Kimberly Wade-Benzoni

Bohnet’s team asked more than 175 volunteer “employees” to perform a math task or a verbal task, then 554 “employer” evaluators (44% male, 56% female) received information on “employees’” past performance, gender, and the average past performance for all “employees.”

“Employers” were paid based on their “employees’’” performance in future tasks, similar to managerial incentives in many organizations.
Consequently, “employers” were rewarded for selecting people they considered effective performers.
Based on information about “employee” performance, evaluators decided to:

  • “Hire” the “employees,” or
  • Recommend the “employees” to perform the task in future, or
  • Return “employees” to the pool for random assignment to an employer.
Keith E. Stanovich

Keith E. Stanovich

The Harvard team found that “employers” who evaluated “employees” in relation to each other’s performance were more likely to select employees based on past performance, rather than relying on irrelevant criteria like gender.

Richard F. West

Richard F. West

In contrast, more than 50% of “employers” evaluated each candidate separately without reference to other “employees,” selected under-performing people for advancement.
Only 8% of employers selected under-performers when comparing “employees” to each other, and multiple raters for multiple candidates also tended to select the higher performing “employees.”

Team Bohnet suggested that people have two distinct and situation-specific modes of thinking, “System 1” and “System 2,” illustrated by University of Toronto’s Keith E. Stanovich and Richard F. West of James Mason University.

Keith Stanovich-Richard West System 1- System 2 ThinkingThese cognitive patterns can lead evaluators to select incorrect decision norms, leading to biased outcomes.

Decision tools like the “evaluative nudge” decision-framing can reduce bias in hiring and promotion decisions, leading to a more equitable workplace opportunity across demographic groups.

-*What other evaluation procedures can reduce unconscious bias in performance appraisal and career advancement selection processes?

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Reframing Non-Comparable Choices to Make Them Simpler, More Satisfying

Life’s most baffling decisions are among non-comparable choices: “apples-to-oranges” comparisons.

Eunice Kim

Eunice Kim

University of Toronto’s Eunice Kim Cho collaborated with Uzma Khan of Stanford and Yale’s Ravi Dhar to investigate whether non-comparable choices may be made easier and more satisfying by changing their “level of representation,” or decision context.

Uzma Khan

Uzma Khan

Cho and team drew on Construal Level Theory (CLT) discussed by NYU’s Yaacov Trope, Nira Liberman of Tel Aviv University and Cheryl Wakslak, now of USC, to differentiate decisions construed as concrete, specific, contextualized, and personal from more abstract, distant options based on future time, remote space, social distance, and hypothetical probability.

Ravi Dhar

Ravi Dhar

Trope and team reported that these differing construals can determine people’s predictions, decisions, and behavior.

Yaacov Trope

Yaacov Trope

Kim’s team offered volunteers a gift card and asked half of the participants to choose between comparable choices (different types of chess sets or different types of consumer electronics).

Nira Liberman

Nira Liberman

The remaining subjects chose between non-comparable options (chess set vs. cheese sampler or consumer electronic device vs. event tickets), and all  participants chose between these options for themselves (specific context) or for an acquaintance (abstract context).

Cheryl Wakslak

Cheryl Wakslak

When people chose for themselves, at the more personal, specific construal level, they found it easier to select between more similar choices, the two chess sets, but not the dissimilar choice of chess set vs. cheese platter.

In contrast, when participants chose a gift for a more socially-distant person, an acquaintance, they found it easier to select between dissimilar items.
Kim and team concluded that it’s easier to make dissimilar choices when the options are represented at a higher level of abstraction to enable “big picture thinking.”

Marketers use this principle to position dissimilar choices more abstractly, like “level of enjoyment” rather than focusing on specific specific product features, to help consumers make decisions more quickly.

Decision-making ease is crucial because it is associated with greater satisfaction with the decision.
When taking a decision is complex and stressful, many people doubt the decision and feel less content.

Jens Forster

Jens Forster

Liberman and Jens Forster, now of University of Amsterdam, demonstrated that complex, non-comparable, or confusing choices are associated with lower decision satisfaction and greater likelihood of choosing the previously rejected option in a subsequent decision.

Individuals can consider more abstract, “big-picture” criteria when deciding between differing options, such as equal expenditures on a a material possession or an experience, to increase ease and speed of decision-making.

The next post considers which type of purchase – material or experiential – most people find more satisfying.

-*How do you make decisions when the choices are not directly comparable?

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Intrinsic Motives, not Positive Consequences Linked to Achieving Goals, Career Performance

Amy Wrzesniewski

Amy Wrzesniewski

Sustained effort toward a goal may be intrinsically motivated by personal commitment to a larger “mission.”
At the same time, goal-seeking activity may be extrinsically motivated by external rewards, counteracting intrinsic motivation’s positive impact on effective career performance.

Xiangyu Cong

Xiangyu Cong

This complex interaction of internal and external motives was investigated among more than 10,000 people admitted to the United States Military Academy (“West Point”) by Yale’s Amy Wrzesniewski, Xiangyu Cong, Michael Kane, Audrey Omar, and Thomas Kolditz, with Barry Schwartz of Swarthmore.

Michael John Kane

Michael John Kane

Wrzesniewski’s team considered the long-term impact of holding both intrinsic motives (desire to serve and protect citizens) and extrinsic motives (have a respected career) for attending West Point cadets on:

-Promotion to commissioned officer rank,

-Extending officer service beyond the minimum required period of 5 years,

-Selection for early career promotions.

Audrey Omar

Audrey Omar

Cadets who were intrinsically motivated were more likely to accomplish these goals.
However, those who also reported extrinsic motivation were less likely to achieve these career distinctions.

Richard Koestner

Richard Koestner

A meta-analytic review of nearly 130 experiments by University of Rochester’s Edward Deci and Richard Ryan with Richard Koestner of McGill confirmed the undermining effects of extrinsic rewards on intrinsic motivation from childhood through adulthood.

Mark Lepper

Mark Lepper

People may report less intrinsic motivation when extrinsic rewards are available, a phenomenon called the “overjustification hypothesis”  by Stanford’s Mark Lepper, David Greene, and Richard Nisbett of University of Michigan.

Clark McCauley

Clark McCauley

People typically view their work as being intrinsically or extrinsically motivated in a typology that differentiated

Job, mostly extrinsically motivated,

-Career, some intrinsic and extrinsic motivation,

C-alling, intrinsically motivated by fulfillment from the work itself, resulting in greater satisfaction and better performance than the other two orientations, according to Wrzesniewski’s work with Schwartz, collaborating with Bryn Mawr’s Clark McCauley and Paul Rozin of Penn.

Paul Rozin

Paul Rozin

These results  empirically support guidance to find meaning in work rather than to focus on positive consequences of goal achievement.

Thomas Kolditz

Thomas Kolditz

This is especially relevant because the U.S. Military employs extrinsic motive appeals in marketing messages to recruit cadets, suggesting that military services provides “money for college,” “career training,” and enables members to “see the world.”

However, extrinsic motives tend to be associated with less career recognition and tenure than those who find meaning in the organization’s mission.

-*How do you increase intrinsic motivation when extrinsic motivation may seem more appealing?

-*What elements make your work “a calling”?

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Perceived Diversity = “Like Me”

Christopher Bauman

Christopher Bauman

Judgments of “diversity” are rarely completely objective:
People tend to rate a group as “diverse” when it includes members of the evaluator’s race, found University of California, Irvine’s Christopher W. Bauman, Sophie Trawalter of University of Virginia and UCLA’s Miguel M. Unzueta.

Sophie Trawalter

Sophie Trawalter

Almost 1900 volunteers from diverse racial groups rated headshots of a fictional company’s six-person management team for its “ethnically diversity”:

  • Caucasian team” included six white headshots (100% white),
  • Asian team” showed four white and two Asian people (mirroring the 66% majority of white people in the U.S.),
  • Black team” featured four white and two black people (66% white),
  • Asian + Black” team had four white, one black, and one Asian person (66% white).
Miguel Unzueta

Miguel Unzueta

Members of racial minority groups rated leadership groups as “more diverse” when they included members of their own racial group rather than members of other racial minority groups.

Participants rated groups as it “less racially diverse” when they did not include at least one member of their own racial group.
This “in-group representation effect” was stronger for African Americans than for Asian Americans.

In another study, more than 1,000 volunteers read news articles about the prevalence of prejudice, then provided ratings.
They showed no “in-group representation effect,” suggesting that reading about how another minority group suffers from prejudice reduced raters’ self-referential evaluation bias.

These results indicate that people’s expectations affect perceptions of diversity.
Priming awareness and empathy for similar experiences encountered by other groups reduced in-group biases.

Jim Sidanius

Jim Sidanius

African Americans are often judged as experiencing:

Lower social status,

More negative stereotypes,

More discrimination, reported Harvard’s Jim Sidanius and Felicia Pratto of University of Connecticut.

Felicia Pratto

Felicia Pratto

In contrast, Asian Americans tend to be attributed higher status so report less discrimination than other racial minority groups.

Andrea Romero

Andrea Romero

Despite this advantage, Asian Americans have a lower return on their investment in education than Whites, even though they achieve higher levels of education and income than other racial minority groups, reported University of Arizona’s Andrea Romero with Robert Roberts of University of Texas and another group led by UT colleague Myrtle P. Bell with David A. Harrison and Mary E. McLaughlin.

Myrtle P Bell

Myrtle P Bell

Higher levels of “diversity” have been linked to greater:

Valerie Purdie-Vaughns

Valerie Purdie-Vaughns

These findings were confirmed in studies by Columbia’s Valerie Purdie-Vaughns and Ruth Ditlmann, Claude M. Steele of Stanford, University of British Columbia’s Paul G. Davies and Jennifer Randall Crosby of Williams College and separate work by UCLA’s Jaana Juvonen and Sandra Graham with University of California Davis’s Adrienne Nishina 

Jaana Juvonen

Jaana Juvonen

Diversity is “in the eye of the beholder” because a team may appear more diverse to raters when the group’s composition aligns with the observers’ own characteristics.

-*How do you reduce personal in-group biases based on individual expectations and experiences?


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Creating Productive Thought Patterns through “Thought Self-Leadership”

Albert Ellis

Albert Ellis

Leaders’ actions actions are influenced by internal commentaries and judgments.
Often, these thoughts are self-critical, provoking anxiety.

Aaron Beck

Aaron Beck

Cognitive Behavior Therapy (CBT), developed by University of Pennsylvania’s Aaron Beck, provides a systematic way to restructure “irrational self-talk“,  as do Albert Ellis‘s Rational-Emotive Behavior Therapy (RET), and David Burnssynthesis of CBT and RET.

David Burns

David Burns

Arizona State University’s Charles Manz and Chris Neck  translated these self-management concepts to managerial development.
They outlined a Thought Self-Leadership Procedure as a five-step feedback loop:

Charles Manz

Charles Manz

1. Observe and record thoughts,
2. Analyze thoughts,
3. Develop new thoughts,
4. Substitute new thoughts,
5. Monitor and Maintain new, productive thoughts.

-*What practices do you use to develop and apply productive thought patterns under pressure?

Chris Neck

Chris Neck

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