Predicting moral judgments of corporate responsibility with formal decision heuristics

Predicting Moral Judgments of Corporate Responsibility with Formal Decision Heuristics Anna Coenen (coenen@mpib-berlin.mpg.de) Max Planck Institute for Human Development, Center for Adaptive Behavior and Cognition Lentzeallee 94, 14195 Berlin, Germany Julian N. Marewski (marewski@mpib-berlin.mpg.de) Max Planck Institute for Human Development, Center for Adaptive Behavior and Cognition Lentzeallee 94, 14195 Berlin, Germany Abstract We address the questions (1) how moral decision-making can be formally modeled using established decision models and (2) which of these models are the most accurate in predicting moral judgments. We conducted an experiment with a comparison task in which people had to decide which of two companies behaved more fairly in dealing with the consequences of the current financial crisis. We modeled these judgments of fairness (i) using a compensatory weighted additive model (WADD), (ii) a unit weight linear heuristic (UWL), and (iii) a noncompensatory decision rule (LEX). All strategies could predict people's actual decisions above chance level for a majority of the subjects. This lends support to the modeling approach to moral decision-making. Keywords: moral heuristics; simple heuristics; moral psychology; take-the-best. Introduction In the late summer of the year 2008, financial markets all over the world dropped to historic lows which drove many Western societies into the most severe financial crisis since the Great Depression. The media, as well as public and political discussion remained looking for the scapegoat; eyes turned on CEOs and bankers all over the world in trying to find an explanation of the rapidly evolving recession. Major companies were faced with the difficult task of justifying sudden bankruptcy, massive rationalization programs, and job cuts. Preserving trust in public opinion, customers, and stakeholders became a critical point in dealing with the difficult circumstances of plunging stock markets and decreasing consumption. The debate about corporate responsibilities and social justice that evolved highlights the moral significance that the crisis management of major companies has for a greater part of the public. Evaluating the integrity and responsibility of companies, banks, government, or other public institution plays a great part in our every day dealing with morality. The current study seeks to model the moral evaluation processes that underlie normative judgments such as those involved in assessing corporate crisis management. With respect to current theories of moral decision- making, our study has three aims: (1) To use formal models for describing and predicting moral decisions, (2) to spell out the concept of moral intuitions in terms of the fast and frugal heuristics approach to judgment and decision-making (e.g., Gigerenzer, Todd, and the ABC Research Group, 1999), and (3) to focus on realistic normative decision problems. First, recent work in moral psychology has stressed the importance of intuition for moral decision-making (Greene & Haidt, 2002; Haidt, 2001; Hauser, Cushman, Young, Jin, & Mikhail, 2007). According to this work, people often make moral judgments quickly and unconsciously, without engaging in explicit deliberative reasoning. Only after a judgment has already been reached do they construct reasons for their already-made decisions. If moral decisions have little to do with our post-hoc rationalizations of them, then this leads to the question what the processes and reasons are that underlie moral judgments. Formal models of moral decision-making can help to explicate the notion of moral intuition and draw attention to the reasoning processes involved in moral judgment (Gigerenzer, 2008). Moreover, by building formal models of people’s judgment processes the precision and predictive power of corresponding theories can be increased, which in turn can foster cumulative theory building and, in doing so, aid scientific progress (for an overview of some of the advantages of formal modeling, see Marewski & Olsson, 2009). To our best knowledge, up to today there are not many attempts to study moral judgments in terms of formal, cognitive decision models. In this study, we therefore aim at testing the ability of different models to predict moral decisions. Second, one way of spelling out the fast and intuitive nature of moral judgments is to understand them as being produced by simple rules of thumb, or heuristics (Gigerenzer, 2007, 2008; Sunstein, 2005). The fast and frugal heuristics research program has shown that such heuristics can successfully predict people’s decisions when they answer questions about matters of fact, for instance, when inferring which of two cities is larger, or when making estimates about some other objective criterion (e.g., Bergert & Nosofsky, 2007; Broder & Gaissmaier, 2007; von Helversen & Rieskamp, 2008; Mata, Schooler, & Rieskamp, 2007; Rieskamp & Hoffrage, 2008; Rieskamp & Otto, 2006; for a recent overview see e.g., Marewski, Galesic, Gigerenzer, 2009). Here, we study if and how some well- known examples of these heuristics and related earlier