Even ordinary people are prone to shocking ethical lapses. As the empirical study of ethics has surged in the past two decades, clear evidence has emerged that ethical thinking and behavior are prone to many of the same mental processes and pitfalls as the rest of human thinking and behavior. Just as we humans are prone to systematic and predictable cognitive errors, we appear to be prone to systematic and predictable ethical errors.
This tendency seems ingrained. Earlier research with patients who incurred brain damage suggested that visceral, automatic flashes of affect guide moral choices, independent of learned knowledge about morality. Indeed, neuroscientific data has illustrated that the areas of the brain tooled for cognitive reasoning and those generating more automatic responses were both activated during moral decision-making. Similarly, it has been posited that moral intuition precedes moral reasoning, and that one’s overall moral judgment is heavily biased towards the leanings of a rapid and automatic process, rather than a slower, more thoughtful one.
In our study, we explored the effect of this apparent reflex tendency on the consciousness and behavior of decision-makers in the moment of ethical choice. What is the role of the decision-maker’s cognitive framing of the situation vis-à-vis the time he may have to make a decision? We turned to the concept of framing as the foundation of our inquiry. In our case, a framing effect occurs when objectively identical situations generate dramatically different decisions based on whether they are presented, or perceived, as potential losses or gains. It has been shown that people are loss-averse; that is, they are willing to go to greater lengths to avoid a loss than to obtain a similarly sized gain.
We considered the implications of framing effects for ethics. When making decisions, individuals often choose from an array of possible responses, with some choices being more or less ethical than others. Our study showed an “ethical framing effect”, such that individuals who perceive a potential outcome as a loss will go to greater lengths, and engage in more unethical behavior, such as using insider information or lying, to avert that loss than individuals perceiving a similarly sized gain.
"The results showed that when people viewed situations as potential losses, it influenced their behavior and ability to make ethical judgments. People trying to avoid a loss were more likely to make lower-road ethical choices than people trying to attain a gain."
Framing is less likely to have an effect when decision-makers are able to fully process the information. Brain imaging experiments have shown that brain activation patterns that occur when an individual demonstrates the effect of framing differ from those that occur when an individual does not demonstrate the framing effect, suggesting that “automatic” processes that are more or less reflexive in nature produce the framing effect, while engagement in more deliberative mental processes can reverse it.
The effect of framing seems most likely to occur under conditions that demand an automatic, versus reasoned, response. Because reasoning is fueled by cognitive resources, such as time for deliberation, researchers have shown that reasoning under time pressure is vulnerable to being rushed, fragmented, or skipped altogether. Thus, framing offers an opportunity to examine the automatic response in action during ethical decision-making. In the absence of sufficient cognitive resources for reasoning, we expected to find that when a situation is framed as a potential loss, the influence on ethical decision-making is heightened. We further expected that the influence of the framing effect would be greater when decision-makers are under time pressure, thus heightening the automatic nature of the decision generated by the framing effect.
In this work, we manipulated the frame of the decision-maker by either describing the probability of a potential gain or the probability of a potential loss in the situation. Importantly, the gain and loss conditions presented identical problems, simply expressed in different language so as to manipulate the participant’s framing of the situation. Three experiments, each with unique dependent measures and samples, offered evidence for our hypotheses. We tested for a main effect of frame using a judgment task assigned to 55 undergraduates. Then, with a group of 92 part-time MBA students at two northeastern colleges, we added in behavioral measures of misrepresentation and false promises. Finally, we both explicitly imposed and removed time pressure, with 93 recruits, in order to test whether the framing effect on ethics is the result of an automatic process.
The Sad Truth
The results showed that when people viewed situations as potential losses, it influenced their behavior and ability to make ethical judgments. People trying to avoid a loss were more likely to make lower-road ethical choices than people trying to attain a gain. We explain this tendency using the theory of framing effects. Furthermore, we demonstrated how this effect can be eliminated by removing time pressure, suggesting that people make poor ethical choices when they react automatically, without time to think things through. They make better choices when that time pressure is absent. The experiments involved what was, in truth, a gain. Simply framing the outcome as a loss or gain was sufficient to generate the effect.
What makes these framing effects most ethically worrisome is the absolute consistency and transparency of the underlying reality facing both loss-framed and gain-framed decision-makers. It is unsurprising that desperate people engage in desperate behaviors. However, decision-makers need not face desperate circumstances to be at ethical risk. As we discovered, framing effects are responses to gains or losses relative to a reference point; the ethical risk does not require absolute desperation, only relative levels of loss.
DOLLY CHUGH is assistant professor of management and organizations at NYU Stern. MARY C. KERN is assistant professor of management at Zicklin School of Business at CUNY’s Baruch College.