In the aftermath of Spygate, reading the deluge of blog postings—especially those by bloggers outside of New England—may have led one to the conclusion that Bill Belichik was a calculated cheat who took planned risks and in the process tarnished the sacred reputation of a national treasure. This is, of course, not the first time that someone in a position of power has engaged in regrettable behavior, and it is also not the first time that the public and the media has rushed to label such behavior as the act of an unethical individual—a “bad apple.” We suggest that this rush to label such behaviors as the actions of one unethical individual often obscures rather than informs our understanding of such behavior, and more importantly it provides no lessons to help us understand and think about how to prevent such behaviors in the future.

It is helpful to think of people as having two fundamental motivations: the desire to see ourselves as honest, good people, and the desire to gain the benefits that come from cheating—on our taxes or on the football field. These two, often conflicting, motivations can be met simultaneously, however, if people not only cheat but also justify their unethical behavior. Our research in the field of behavioral economics has demonstrated that we are marvelous at accomplishing this balance by justifying our cheating, and thus maintaining our self-image as being one of pure honesty. It’s a tricky game, but we are very good at it. This is why we might steal Post-It notes but feel justified because everyone steals from work—even if we have no evidence of such theft. Because cheating is easier when we can justify our behavior, people often cheat in small amounts: We can come up with an excuse for stealing Post-It notes, but it is much more difficult to come up with an excuse for taking $10,000 from petty cash.

At the same time, however, people (including Belichik) sometimes engage in “big” cheating. How might this happen? We think the ability to engage in big cheating often relates to the ambiguous nature of what constitutes a big violation. As mentioned above, people often default to an “everybody does it” justification when engaging in questionable behavior. As the recent controversies about steroid use in both major league baseball and the NFL evidence, cheating appears to be widespread; it is a small step from feeling that everyone else is cheating and getting an unfair advantage by doping to feeling that one’s own cheating (taping signals) is justified. In a world where everyone is behaving honestly, any dishonesty constitutes a big infraction. But, in a world where many people are behaving dishonestly, and the news is filled with stories of their infractions, even big infractions can feel small to the perpetrator.

Thus while it easy to single out Belichik as a bad apple and Spygate as an isolated incident (as the NFL has attempted to do) unethical behavior often arises not as a result of one bad apple but at least in part as the product of systems where dishonesty is pervasive and endemic. This analysis also suggest that if we want to prevent the recurrence of such events in the future, we need to turn our attention not to the single bad apple that has surfaced, but to the system that has most likely produced bad apples by the bushel

(with Michael Norton, Harvard University)

A recent study conducted by Zillow finds what they call a “Not My House! Sentiment,” where despite the evidence that 77% of U.S. homes actually declined in value in the past year, 62% of homeowners believe their own home’s value has increased or stayed the same.

How can this be?

I think that part of the story has to do with the changes and tinkering we do to your homes coupled with our inability to understand that the changes we have made to fit our own individual taste might be ones that others don’t see or don’t value.  

When someone moves to a new house they often make changes to their homes, breaking a wall, changing the tile, fixing a bathroom, adding a porch etc.  As a consequence of this process the house is now tailored to its particular owner with its unique individual taste.  Now their house is great for that person.  

When a home owner compares their own house (who has been tailored to their own taste) to a house that was sold for a low amount down the street they can easily reason why the price of that other house (the one not tailored to their own taste) was so low.  After all that other house was just not as nice, not as great, not as suited to their taste.  There was something in that other house that was just not right, and this must be the reason it did not sell well.  Right?  

Can anyone get over this egocentric bias of looking at our own homes from the perspective of our own preferences?  I suspect it is very hard to do, and maybe the only people who can do it well are those who are unable to tailor their homes (maybe due to some condo regulations).  These people are going to be less susceptible to the “Not My House! Sentiment” and therefore understand more quickly that their values of their homes are going down.  This will probably earn them some depressing sleepless nights thinking about this, but they might also be able to make better decisions about their homes.