Business System Analysis

1
Business System Analysis Decision Making-
Lecture 9

• Zhangxi Lin
• ISQS 5340
• July 2006

2
Chapter 8 Bounded Ethicality

• Overclaiming Credit
• Implicit Attitudes
• In-Group Favoritism
• Discounting the Future
• The Psychology of Conflict of Interest

3
Bounded Ethicality in E-Commerce

• The case of eBay trading. See negative feedbacks
• Problems may occur if
• A seller did not advertise all known information
  about the status of the product being auctioned,
  particularly the negative aspect. He simply pay
  less attention to that aspect. He believe this is
  a normal way people doing it more confirmative
• A seller did not provide enough help information
  to buyers when selling something.
• A seller tend to compare his price with the
  highest price in the market, claiming that his
  product is a better deal
• A seller tend to compare the quality of his
  product with the one with lowest quality in the
  market, claiming that his product is a better deal

4
China Fights For Its Wireless Standard Against
Intel-Backed 802.11i

• Chinese officials say the approval process for a
  wireless security standard was unfairly stacked
  against its WAPI. It could be the start of more
  such disputes. (InformationWeek, 03/31/2006
  http//www.informationweek.com/news/showArticle.jh
  tml?articleID188700275)
• The problems of the WAPI proposal
• Not well supported by Chinas domestic companies
• May negatively affect stakeholders interest
• Compatibility is not good enough yet to other
  Wi-Fi standards
• However, it does not mean it makes no sense.
  Should it be blocked for the normal approval
  procedure?
• Incidence
• Intel Chinese delegation was to attend an IEEE
  workshop last year held in the US, but the key
  technical persons visa application were denied.
• Any ethicality factor behind the situation?
  http//wifinetnews.com/archives/006612.html

5
Overclaiming Credit

• Coauthors often overclaim credit for their joint
  work
• Nobel Prize winners overclaim their credit in the
  contribution
• How to stop overclaiming?
• Thinking about others contributions first

6
Implicit Attitudes

• The case of John Smiths VC decision making
• Harvards research website https//implicit.harva
  rd.edu/implicit/
• Implicit attitude are rooted in ordinary mental
  processes of categorization, perception, memory,
  and judgment -gt ordinary prejudice
• Highly predictable in nonverbal behaviors to
  different groups of people
• More likely to occur when decision makers are
  operating under System 1 thinking

7
In-Group Favoritism

• We tend to identify with people who are a lot
  like us. We are more comfortable doing favors for
  those with whom we identify than for those
  noticeably different from us.
• Two situations
• Favor
• Allocating scarce resources

8
Discounting the Future

• We are consuming environmental resources at an
  ever-increasing rate.
• Our ever-increasing desire to consume more than
  we did in the past causes us future harm.
• Spending too much hurts our funds for retirement

9
The Psychology of Conflict of Interest

• Conflict of interest exists in many of our
  businesses
• I am coauthoring papers with my colleagues. Some
  of them are in the same seniority status of
  faculty we are junior faculty. Should will
  compete for the limited number of tenure
  positions a few years later?

10
The Psychology of Conflict of Interest

• ADT Security Company suggested you that the new
  area you are moving in needs better security. So
  they can install the alarm system for you but you
  need to pay the company 35/month for the
  contract of three years. Is the security
  condition really bad in the area?
• Everybody knows that spyware and addware are bad.
  Some companies made special spyware/addware they
  just bothering you now and then. A message then
  advice you go to their website to do free scan.
  The outcome of the scan is horrible Your
  computer has been infected with 500 different
  spyware/addware many of them are high risk
  they may steal your secret information, such as
  your bank account login information. Then you are
  offered to buy their anti-spyware product, which
  costs you 50 bucks.
• Actually, these companies do not really want to
  make too much damage to your computer or personal
  informatino security. They simply want you to pay
  for their services.

11
Conclusions

• It becomes clear that it would not have been
  possible for just a few people to create the
  problems if others around them behave ethically.
  
• Most people hold a stable view of themselves as
  moral, competent, deserving, and immune from
  ethical challenges. This high self-esteem keeps
  us from monitoring our own behavior and makes
  bounded ethicality all the more likely.