Across the globe, many people and institutions suffered large costs from the 2008 financial meltdown. Among the victims is the financial sector itself—whose reputation has been questioned after scandals involving the manipulation of interest rates and fraudulent deals. In trying to make sense of the crisis, some have pointed the fingers to individual bankers and banks, others to institutional pressures. But new research suggests that one important cause may reside elsewhere: in the banking culture itself. A paper recently published in Nature magazine found that the financial sector’s culture encourages dishonesty.
This is an important finding, as it suggests that good conduct starts with having the right culture. Finance CEOs and upper management need to change cultural norms, so that they can model good behavior at all levels of banks and assure that performance incentives don’t inadvertently reward dishonesty. But what, you may be wondering, is unique about banking culture? The fact that there is a lot of focus on money and number crunching.
For the study published in Nature, Alain Cohn and his colleagues divided 128 employees of a large bank into two groups. In the first group, bankers were primed to think about their professional identity, with questions such as “what is your function at this bank?” Bankers in the second group, instead, completed a survey about their wellbeing and everyday life that did not include questions about to their professional life. Next they all tossed a virtual coin 10 times, in private, knowing each time which outcome would earn them $20 for the flip. They then had to report their results online to claim any winnings. The second group of bankers behaved honestly—reporting half heads, half tails—but there was cheating among those whose professional identity had been primed. In their case, in fact, the percentage of winning tosses came in at an incredibly fortunate 58.2 percent. Interestingly, the researchers also conducted the same experiment in other industries but did not find the same skewing when employees were primed to think about their work.
The authors conclude that the prevailing business culture in the banking industry weakens and undermines honesty. Research in moral psychology and behavioral ethics, however, suggests that the dishonesty may be due something more basic: money and number crunching are an important part of the banking industry. When people are focused on money, research shows, they behave in self-interested ways. Even thinking about money leads people to be less helpful and fair in their dealings with others, to be less sensitive to social rejection, and to work harder toward personal goals. In fact, money can make us so focused on our selfish motives that it can even lead to unethical behavior. In my own research, for instance, I find that university students were more likely to cheat after seeing 7,000 dollar bills than after seeing 24. Similarly, study participants across a variety of studies were more likely to cheat when they were primed to think about money.
The banking industry is not only about money: it also involves a lot of number crunching. And, research suggests, even basic math calculations increase people’s likelihood of engaging in selfish and unethical behavior. Research by Long Wang (City University of Hong Kong) Chen-Bo Zhong (University of Toronto), and J. Keith Murnighan (Northwestern University) finds that number crunching put people in a “calculative mindset” that makes them more likely to focus on a quantitative approach to solving a problem, overlooking a decision’s moral consequences. This narrowly focused “crunch the numbers” approach, they show, has unintended consequences in the way that organizations approach decision-making. After engaging in a calculative task, participants in their experiments were more likely to succumb to the temptations of higher payoffs by acting more selfishly or dishonestly. Thus, the mere act of calculating can activate a calculative mindset that crowds out moral concerns.
Together, this body of work may seem very discouraging. After all, money is ubiquitous in our daily lives, and number crunching is very prominent in our Western culture’s psyche. But money is not the only ubiquitous resource. Another one is time. Benjamin Frank once said that “time is money,” thus suggesting that the two resources are equal. Yet, we treat them differently. Whereas money is a self-serving resource, time is an interpersonally connecting and more personally meaningful resource. For instance, research by Cassie Mogilner and Jennifer Aaker shows that people induced to think about time, rather than money, are more likely to choose to spend time with loved ones over work obligations. Additionally, time is used in more intimate situations than money: people use money in transactions with everyone from close friends to perfect strangers, but they use time almost exclusively for the people and things that really matter to who they are. Thinking about time triggers greater self-reflection than money. Such self-reflection may be a simple exercise, but it is an important one: it reminds us of that we want to be good people.
In my own research, I find that thinking about time encourage people to reflect on who they are, making them more conscious of how they conduct themselves. Given that people desire to see themselves as good people, triggers that encourage them to reflect on who they are affect their behavior. Priming people to think about time, rather than money, lead to less selfish and more ethical behavior. For instance, in one study, half of the study participants completed a series of task while sitting in a cubicle with a mirror on their desk. Participants who had been primed to think about money cheated 39 percent of the time when a mirror was present but 67 percent when it was not. Those who had been primed to think about time cheated 32% of the time in the presence of the mirror and 36 percent in its absence—a percentage that is statistically the same. In this study, the mirror triggered self-reflection. This made a difference for those participants thinking about money: they behaved more honestly. But for those participants thinking about time, it was the time prime who triggered self-reflection and thus the mirror was unnecessary.
The French author and philosopher Albert Camus once said, “Man is the only creature that refuses to be what he really is.” Having the strong desire to be a good person is important, but it may not be enough to assure our actions reflect such desire. By recognizing the pervasive effects money can have, we can be more mindful of our actions, and we can make sure we have opportunities in our busy lives to stop and reflect—to make time to think about time.
Are you a scientist who specializes in neuroscience, cognitive science, or psychology? And have you read a recent peer-reviewed paper that you would like to write about? Please send suggestions to Mind Matters editor Gareth Cook. Gareth, a Pulitzer prize-winning journalist, is the series editor of Best American Infographics and can be reached at garethideas AT gmail.com or Twitter @garethideas.