The Situationist

Archive for June, 2012

The Situation of Fairness – 2

Posted by The Situationist Staff on June 30, 2012

Earlier this month wrote an excellent piece, “titled The Fairness Trap,” for the New Yorker.  Surowiecki considers some of the ways that the widespread preference for fairness may be contributing to some of the global and local economic woes.  Here are a few excerpts from the article.

With Europe’s economic woes dominating the headlines once more, it’s hard not to think of Yogi Berra’s dictum “It’s déjà vu all over again.” As usual, the turmoil centers on Greece, which is in its fifth year of recession and struggling beneath a colossal debt load. This year, in exchange for drastic austerity measures, Greece’s government agreed to an aid package (its second) with the European Union and the International Monetary Fund, totalling $174 billion. But three weeks ago furious Greek voters tossed the ruling parties out of office; attempts to form a coalition government failed, and new elections are scheduled for next month. Now Greek politicians are talking tough about renegotiating, but the E.U., led by Germany, which is the largest contributor to the bailout, says that there will be no more money for Greece if it doesn’t live up to its promises. So policymakers are seriously discussing a so-called Grexit—in which Greece would default on its debts and abandon the euro.

This isn’t an outcome that anyone wants. Even though a devalued currency would make Greece’s exports cheaper and attract tourists, it would do so at a terrible price, destroying huge amounts of wealth and seriously harming the country’s G.D.P. It would be costly for the rest of Europe, too. Greece owes almost half a trillion euros, and containing the damage would likely require the recapitalization of banks, continent-wide deposit insurance (to prevent bank runs), and more aid to Portugal, Spain, and Italy, which seem to be the next countries in line to default. That’s a very high price to pay for getting rid of Greece, and much more expensive than letting it stay.

Rationally, then, this standoff should end with a compromise—relaxing some austerity measures, and giving Greece a little more aid and time to reform. And we may still end up there. But the catch is that Europe isn’t arguing just about what the most sensible economic policy is. It’s arguing about what is fair. German voters and politicians think it’s unfair to ask Germany to continue to foot the bill for countries that lived beyond their means and piled up huge debts they can’t repay. They think it’s unfair to expect Germany to make an open-ended commitment to support these countries in the absence of meaningful reform. But Greek voters are equally certain that it’s unfair for them to suffer years of slim government budgets and high unemployment in order to repay foreign banks and richer northern neighbors, which have reaped outsized benefits from closer European integration. The grievances aren’t unreasonable, on either side, but the focus on fairness, by making it harder to reach any kind of agreement at all, could prove disastrous.

The basic problem is that we care so much about fairness that we are often willing to sacrifice economic well-being to enforce it. Behavioral economists have shown that a sizable percentage of people are willing to pay real money to punish people who are taking from a common pot but not contributing to it. Just to insure that shirkers get what they deserve, we are prepared to make ourselves poorer. Similarly, a famous experiment known as the ultimatum game—one person offers another a cut of a sum of money and the second person decides whether or not to accept—shows that people will walk away from free money if they feel that an offer is unfair. Thus, even when there’s a solution that would leave everyone better off, a fixation on fairness can make agreement impossible.

You can see this in the way the U.S. has dealt with the foreclosure crisis. . . . * * *

The fairness problem is exacerbated by the fact that our definition of what counts as fair typically reflects what the economists Linda Babcock and George Loewenstein call a “self-serving bias” * * * [which] leads us to define fairness in ways that redound to our benefit, and to discount information that might conflict with our perspective. This effect is even more pronounced when bargainers don’t feel that they are part of the same community—a phenomenon that psychologists call “social distance.”  * * *

Read the entire article, including a discussion of the U.S. mortgage crisis here.

Related Situationist posts:

Frans De Waal on Morality

Posted in Conflict, Distribution, Politics, Public Policy | Leave a Comment »

The Situation of the Self

Posted by The Situationist Staff on June 28, 2012

Rebecca Hollander-Blumoff recently posted her intriguing article, “Law and the Stable Self”  (published in the St. Louis University Law Journal, Vol. 54, No. 1173, 2010) on SSRN.  Here is the abstract.

In this Article, I examine several findings in social psychology related to individuals’ preferences, and I explore how those findings subvert the Enlightenment vision of a stable and knowable self in ways that are quite relevant to law. I first explore one well-known finding in the cognitive bias literature, the status quo bias, and marshal some of the research suggesting ways in which this bias may affect individuals’ behavior vis-a-vis legal systems. Second, I discuss the potential ways in which temporal construal research-research on the way in which individuals see things differently depending on the time frame in which the events will occur-may relate to legal systems. Finally, I address how well some of the fundamental premises of our litigation system dovetail with psychological research on what individuals want. Our civil legal system is predicated on the recovery of money for harm done, but research suggests that money damages may be inadequate to meet some basic human desires.

Download the article for free here.

Sample of related Situationist posts:

Image from Flickr.

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Prejudiced at Age 3?

Posted by The Situationist Staff on June 27, 2012

Excerpts from a recent Boston Globe article about recent work Situationist Contributor, Mahzarin Banaji:

For more than four decades, the notion that racism and physical prejudice don’t fully develop in humans until the teen or adult years has been at the root of research into racism. Popular scientific belief had been that children, who only develop the ability to express racial preferences at around age 3, gradually develop those preferences over time and only cement them well into their teen years.

But new research not yet published by Mahzarin Banaji, a renowned Harvard University psychologist, brain researcher, and racism and physical prejudice expert, and colleagues suggests that even though they may not understand the “why’’ of their feelings, children exposed to racism tend to accept and embrace it as young as age 3, and in just a matter of days.

“We have known for a very long time that children process information differently than adults. That is a given,’’ says Banaji. “But what has changed, where racism and other prejudice are concerned, is that we had far over-calculated how long it takes for these traits to become imbedded in a child’s brain. It’s quite shocking really, but the gist of it is that 3- and 4-year-olds demonstrate the same level and type of bias as adults. This tells us that children ‘get it’ very, very quickly, and that it doesn’t require a mature level of cognition to form negative biases.’’

Banaji’s study, conducted with two Harvard peers, examined how children and adults identified ambiguously featured faces as happy (smiling) or angry (frowning). They showed 263 white children, between the ages of 3 and 14, a number of graphically drawn facial images in different skin tones from very light tan to brown, and asked them to describe them as happy or angry.

One part of the test showed the children a set of faces that were an “inconclusive’’ light tan color that could have represented a white person or a black person. In that segment, most of the children, without prompting, described the faces as black, and also, no matter the facial expression in the drawing, as angry.

Conversely, those faces the children said they believed to be white – even the faces bearing frowns – were almost exclusively described as happy.

When the white children were asked to compare white faces with Asian faces, the outcome was the same . . . .

A group of black children tested in the study revealed equal favorability and negativity biases, regardless of whether they perceived the test faces to be black or white. . . .

More.

Related Situationist posts:

Image from Flickr.

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The Situation of State Judiciaries

Posted by The Situationist Staff on June 26, 2012

From The Anerican Scholar:

The hearing room of the Wisconsin Supreme Court could be a Beaux-Arts museum, exhibiting images of justice as idealized in America for centuries: ornate, dignified, above reproach. Light pours in through a huge leaded-glass skylight, radiating off veined white marble. Large murals set high off the floor dominate each wall, depicting the venerable sources of Wisconsin law—Roman, English, Native American, and federal. The one to the left of the room’s mahogany bench portrays King John of England reluctantly granting the Great Charter, or Magna Carta, which, in June 1215, ended his lawless seizure of nobles’ land and began an era of legal rights embodied in English, then American, common law.

Article 40 of the Magna Carta pledged, “To no one will we sell, to no one will we refuse or delay right or justice.” But recently, in a string of expensive and increasingly contested elections, candidates to be justices of the Wisconsin Supreme Court have flouted the not-for-sale principle, demeaning the courtroom’s grandeur.

Wisconsin is not alone. In state after state, campaign contributions and related spending by special interests have risen dramatically in the past decade and are expected to swell in the wake of the U.S. Supreme Court’s 2010 Citizens United decision, which removed any limits on independent spending. Wisconsin is one of 22 states that elect judges to their highest courts, or one of 38 if you count states that have so-called retention elections by which appointed judges run to retain their seats. In all of them, independent spending threatens to overwhelm the system of electing judges, making them and the candidates running against them dependent on private money and eroding the public’s confidence in the courts.

Because judicial elections occur on different cycles and are subject to the push and pull of different forces in different jurisdictions, Citizens United has not increased spending uniformly in each state. But across the country, the ruling has caused spending to continue to rise at an ever-accelerating rate. This year, races in Florida, Michigan, and West Virginia have already set new highs for independent spending. Nowhere, though, are the pernicious effects more evident than in Wisconsin, which stands as a warning of just how bad things can get.

In 2007, in a Wisconsin Supreme Court race in which the two candidates spent a total of $2.7 million and special interests spent $3.1 million, Annette Kingsland Ziegler was elected and kept for conservatives a seat being vacated by another judge. The following year, the two candidates together spent “only” $1.2 million, joined by $3.4 million from special interests, much of it on distorted attack ads, which helped Michael Gableman defeat Louis Butler, the court’s first African-American justice, and swung the seven-member bench from liberal to conservative. And things have only gotten worse—over the past five years, special interests in Wisconsin have spent $14.8 million on TV ads to influence judicial elections, more than in any state except Pennsylvania, which has more than twice Wisconsin’s population.

After his defeat, Butler appeared at a conference on judicial selection reform. Holding up a copy of John Grisham’s 2008 novel, The Appeal, he said, “Welcome to my world.” In the novel, a chemical company’s industrial waste poisons the water in a Mississippi town, causing widespread cancer and death. The company stage-manages and heavily funds a successful campaign to replace a liberal justice with a conservative one, who shifts the state supreme court from left to right and casts the deciding vote to overturn a $41 million verdict against the company. The ads that defeated the liberal incumbent attacked her record on crime and other social issues, but really it was her lack of favoritism to business that led the company to take her down.

Like Grisham’s successful challenger, Michael Gableman was a little-known county trial judge with thin credentials, recruited by business to run against Butler. He became the first candidate to defeat a sitting justice since 1967; only three other justices in state history had been defeated in the previous 115 years—in 1947, 1908, and 1855.

Gableman’s TV ads accused Butler of having worked “to put criminals on the street,” pointing to the rapist of an 11-year-old girl. The ad was so misleading that the Wisconsin Judicial Commission charged Gableman with misconduct for “reckless disregard for the truth.” As a judge or justice, Butler never heard a case involving the rapist. But as a public defender years before, he had unsuccessfully sought a new trial for the man because of a breach of criminal procedure in a rape case. The rapist served out his time, and after his release, when he was no longer Butler’s client, he sexually assaulted another girl. Nevertheless, a review board rejected the misconduct charge against Gableman, finding that each individual assertion in the ad was true, so their sum could not be false.

Butler was not targeted for his views on crime, however. Gableman shifted the Wisconsin court to the right and cast the pivotal vote in 2011 when, by 4-3, the court overturned a trial court’s stay of a Republican-backed state law curbing the collective bargaining rights of public employees, effectively upholding the law—the legal fight that made Wisconsin a battleground between the rabid new right and the outraged old left in American politics.

Read the entire article here.

Related Situationist posts:

For a PBS Frontline website on “Justice for Sale,” click here. To download the “New Politics for Judicial Elections Report for 2006,” by the Justice at Stake Campaign, click here. For an NPR interview (audio) of Justice O’Connor about judicial independence by Nina Totenberg, click here. For a PBS interview (transcript, audio, or streaming video) of Justices O’Connor and Breyer on the topic of judicial independence, click here.

Posted in Deep Capture, Law, Politics | Leave a Comment »

The Waiting Game

Posted by The Situationist Staff on June 23, 2012

From Financial Times (snippets of an article by Frank Partnoy inspired by his latest book):

During the two weeks of play that begin on Monday, professional tennis players at Wimbledon will return thousands of first serves. Many of those returns will be entertaining. Some will be remarkable. But all will give spectators an opportunity to improve on the personal and professional decisions we make in all aspects of our lives: by helping us learn to manage delay.

Watch Novak Djokovic. His advantage over the other professionals at Wimbledon won’t be his agility or stamina or even his sense of humour. Instead, as scientists who study superfast athletes have found, the key to Djokovic’s success will be his ability to wait just a few milliseconds longer than his opponents before hitting the ball. That tiny delay is why most players won’t have a chance against him. Djokovic wins because he can procrastinate – at the speed of light.

During superfast reactions, the best-performing experts in sport, and in life, instinctively know when to pause, if only for a split-second. The same is true over longer periods: some of us are better at understanding when to take a few extra seconds to deliver the punchline of a joke, or when we should wait a full hour before making a judgment about another person. Part of this skill is gut instinct, and part of it is analytical. We get some of it from trial and error or by watching experts, but we also can learn from observing toddlers and even animals. There is both an art and a science to managing delay.

* * *

A tennis court, baseline to baseline, is 78ft long. First serves are launched at well over 100mph. Some volleys come even faster. That means a player returning a shot has just 400 to 500 milliseconds from when the ball leaves their opponent’s racket until it hits his or her own. Just half a second.

Hitting a tennis ball at this speed is a paradoxical act. On one hand, it is a largely unconscious physical reaction. It has to be, given the speed of the ball. There is not enough time to consider spin or angle. Conscious contemplation takes at least half a second, so anyone who even tries to think about how to return a shot will end up helplessly watching the ball fly by.

On the other hand, tennis involves a range of sophisticated and creative responses. Ideally, a player should react to both the placement and trajectory of an incoming ball. The position and movement of an opponent are also crucial. Great tennis returners respond to the information cascade of an incoming ball as if they had taken time to process it consciously, even though we know that is not possible.

Professional tennis players are no faster than we are at pure visual reaction time. Imagine that you and Novak Djokovic are playing a video game. We can measure visual reaction time by having both of you simply press a button when you first see the ball leave an opponent’s racket. Both of you would take about 200 milliseconds. Most people are about that fast, and no one is much faster.

That means virtually anyone who can see a distance of 78ft can react visually to any tennis serve or shot in plenty of time. As even the slowest video gamer can attest, if all you have to do is “see” and then press a button to swing — if you don’t even have to get off the sofa — anyone could return a professional-speed serve.

In real tennis, the difficulty arises in the second stage of the service return. The remaining period of, say, 300 milliseconds is the time players have to react physically – to adjust themselves to what they know about the ball’s flight and then try to hit it how and where they’d like.

Having just 300 milliseconds to hit a ball is a serious problem for most of us. Amateurs cannot move to the correct spot and produce a swing with accuracy or power in 300 milliseconds. Most of us can barely adjust our rackets by a few inches. Many solid professionals cannot do much more.

Even Djokovic does not successfully return every shot. But for most returns, he has plenty of time. He is so skilled and practised that he can produce near-instantaneous muscle contractions to move his body and execute a swing in perhaps 100 milliseconds. For him, the physical part of hitting the ball is almost as easy as pressing a button.

Djokovic’s physical speed frees up time for him to prepare during the phase tennis coaches call “ball identification”. This is when he absorbs the crush of data generated after the ball leaves his opponent’s racket. He splits up the time available during a return shot; because he is so fast, he has extra time to gather and process information. Finally, at the last possible instant, he commits to his choice and swings. He can sandwich a lot of preparing between seeing and hitting.

Because Djokovic needs less time to hit, he has more time to gather and process information. He sees, prepares and, finally, only after he has processed as much information as possible, he hits. His preconscious time management and his extraordinary ability to delay enable him to stretch out a split-second and pack in a sequence of interpretation and action that would take most of us much longer.

* * *

Partnoy’s terrific article goes on to review the science of delayed reaction and to connect that research to all sorts of decisions, including investment decisions.  Better yet, Partnoy suggests how the underlying research may help explain the financial crisis.

Partnoy’s book, Wait: The useful art of procrastination’ will be published by Profile Books on July 5.

Related Situationist posts:

Why Goalies Often Dive To The Right

Image from Flickr.

Posted in Book, Situationist Sports, Social Psychology | Leave a Comment »

Rebecca Onie on the Situation of Health (and Health Care)

Posted by The Situationist Staff on June 22, 2012

From

Rebecca Onie asks audacious questions: What if waiting rooms were a place to improve daily health care? What if doctors could prescribe food, housing and heat in the winter? At TEDMED she describes Health Leads, an organization that does just that — and does it by building a volunteer base as elite and dedicated as a college sports team.

Related Situationist posts:

Posted in Distribution, Education, Law, Life, Morality, Video | Leave a Comment »

The Situation of Perceived Time

Posted by The Situationist Staff on June 21, 2012

Melanie Rudd, Kathleen Vohs, and Jennifer Lynn Aaker recently posted their latest paper, “Awe Expands People’s Perception of Time, Alters Decision Making, and Enhances Well-Being” (forthcoming Psychological Science) on SSRN. For those of you who have time to read it, here is the abstract.

When do people feel as if they are rich in time? Not often, research and daily experience suggest. However, three experiments showed that participants who felt awe, relative to other emotions, felt they had more time available (Experiments 1, 3) and were less impatient (Experiment 2). Participants who experienced awe were also more willing to volunteer their time to help others (Experiment 2), more strongly preferred experiences over material products (Experiment 3), and experienced a greater boost in life satisfaction (Experiment 3). Mediation analyses revealed that these changes in decision making and well-being were due to awe’s ability to alter the subjective experience of time. Experiences of awe bring people into the present moment, which underlies awe’s capacity to adjust time perception, influence decisions, and make life feel more satisfying than it would otherwise.

Download the paper for free here.

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Image from Flickr.

Posted in Abstracts, Emotions, Life | 1 Comment »

Uncovering the Interior Situation

Posted by The Situationist Staff on June 18, 2012

From :

Every aspect of our mental lives plays out in two versions: one conscious, which we are constantly aware of, and the other unconscious, which remains hidden from us. Over the past two decades researchers have developed remarkable new tools for probing the unconscious, or subliminal, workings of the mind. This explosion of research has led to a sea change in our understanding of how the mind affects the way we live. As a result, scientists are becoming increasingly convinced that how we experience the world–our perception, behavior, memory, and social judgment–is largely driven by the mind’s subliminal processes and not by the conscious ones, as we have long believed.

A small sample of related Situationist posts:

Posted in Book, Implicit Associations, Social Psychology, Video | Leave a Comment »

Race and Dehumanization

Posted by Adam Benforado on June 15, 2012

I was very sorry to miss the Implicit Racial Bias Across the Law Book Launch Conference yesterday.  It’s rare for such a great set of law and mind sciences speakers to assemble in one spot and the topic continues to be of great importance for all those committed to ironing out injustice in our legal system.  But stuck in Philly, I did manage to “participate” vicariously . . . or, perhaps, more accurately: while doing some background research for some experiments that I am running with Penn’s Geoff Goodwin, I came across an article that I had overlooked a few years back that is of certain interest to all those who study law and race.

The article, Not Yet Human: Implicit Knowledge, Historical Dehumanization, and Contemporary Consequences, offers a fascinating investigation of the mental association between Blacks and apes and its devastating consequences.  As the authors (Phillip Atiba Goff, Jennifer L. Eberhardt, Melissa J. Williams, and Matthew Christian Jackson) explain,

Historical representations explicitly depicting Blacks as apelike have largely disappeared in the United States, yet a mental association between Blacks and apes remains. Here, the authors demonstrate that U.S. citizens implicitly associate Blacks and apes. In a series of laboratory studies, the authors reveal how this association influences study participants’ basic cognitive processes and significantly alters their judgments in criminal justice contexts. Specifically, this Black–ape association alters visual perception and attention, and it increases endorsement of violence against Black suspects. In an archival study of actual criminal cases, the authors show that news articles written about Blacks who are convicted of capital crimes are more likely to contain ape-relevant language than news articles written about White convicts.  Moreover, those who are implicitly portrayed as more apelike in these articles are more likely to be executed by the state than those who are not. The authors argue that examining the subtle persistence of specific historical representations such as these may not only enhance contemporary research on dehumanization, stereotyping, and implicit processes but also highlight common forms of discrimination that previously have gone unrecognized.

Check out the whole article here.

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The Exaggerated Situation of Polarization

Posted by The Situationist Staff on June 14, 2012

Situationist friend Dave Nussbaum has more terrific posts over at, Random AssignmentsBelow, we have re-blogged portions of his timely piece about how “extremists exaggerate polarization.”

Why have American politics become so polarized? Maybe they haven’t – maybe it’s just you? New research reveals that partisans, especially those on the extremes, overestimate the amount of polarization that actually exists. The phenomenon, called polarization projection,helps us to understand how it is that people on both ends of the political spectrum mistakenly assume that there is a much wider gap between the two sides than there actually is.

Making the problem worse, people at the political extremes – those who have exaggerated views of how polarized the country is – are also the ones who are most politically active. This can end up translating extreme partisans’ mistaken views into the election of politicians who are more extreme than the people they represent, particularly in the context of intra-party primaries (Nate Silver recently documented this effect among Senate Republicans).

When the gap between the two parties appears to be enormous, compromise becomes difficult. We become less likely to see our political adversaries as having the same basic goals as us (like improving the country and the lives of its citizens) while having different opinions of how to achieve those goals. Instead, they become the enemy. And compromising with the enemy is not pragmatic, it’s disloyal.

Just ask Richard Mourdock who recently ousted six-term Republican senator Dick Lugar in the Indiana GOP primary. He told Brian Howey of the Evansville Courier and Press:

“I recognize there are times when our country is incredibly polarized in that political sense. Right now is one of those times. The leadership of the Republican Party and the leadership of the Democratic Party are not going to be able to reach compromise on big issues because they are so far apart in principle. My idea of bipartisanship going forward is to make sure that we have such a Republican majority in the U.S. House and U.S. Senate and in the White House, that if there’s going to be bipartisanship, it’s going to be Democrats coming our way, instead of them trying to pull Republicans their way.”

Dick Lugar’s biggest sin, it seems, is that he was occasionally willing to side with Obama and the Democrats. He worked with then-Senator Obama on a bill that to secure nuclear material abroad, and voted to confirm President Obama’s Supreme Court nominees, Sonia Sotomayor and Elena Kagan. As Obama himself said in a statement released after Lugar’s defeat, “While Dick and I didn’t always agree on everything, I found during my time in the Senate that he was often willing to reach across the aisle and get things done.” A willingness to compromise meant the end of Senator Lugar, or, as Tea Partiers in Indiana liked to refer to him, “Obama’s favorite Republican.” Another moderate Republican Senator, Maine’s  Olympia Snowe, also decided not to seek re-election, saying that she does “not realistically expect the partisanship of recent years in the Senate to change over the short term.”

But let’s get back to the research – what’s the evidence that suggests that it’s the extremists that overestimate the amount of political polarization? . . . [continued]

Read the entire post on Random Assignments.

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Implicit Bias in the Law Conference – This Thursday

Posted by The Situationist Staff on June 12, 2012

Date: Thursday, June 14, 2012, 9:00 AM
Location: Austin Hall, Ames Courtroom, Harvard Law School
Address: 1515 Massachusetts Ave., Cambridge, MA

Presenters include Situationist Contributors Mahzarin Banaji, Jon Hanson, Jerry Kang.

From the conference web page:

Despite cultural progress in reducing overt acts of racism, stark racial disparities continue to define American life. This conference considers what emerging social science can contribute to the discussion of race in American law, policy, and society. The conference will explore how scientific evidence on the human mind might help to explain why racial equality is so elusive. This new evidence reveals how human mental machinery can be skewed by lurking stereotypes, often bending to accommodate hidden biases reinforced by years of social learning. Through the lens of these powerful and pervasive implicit racial attitudes and stereotypes, the conference, designed to coincide with the launch of the book “Implicit Racial Bias Across the Law”, examines both the continued subordination of historically disadvantaged groups and the legal system’s complicity in the subordination.

The conference will bring together scholars, judges, practitioners, and community leaders to explore the issues surrounding implicit racial bias in law and policy. It will begin with a compelling overview of the social science. What does science teach us about automatic biases? And what do we still not know? Leaders in the areas of criminal justice, housing law and policy, education, and health care will then present overviews of the impact of implicit bias in their fields. Attendees will hear federal judges’ and leading scholars’ perspective on implicit bias claims in the courtroom and hear experts’ assessment of the future of implicit bias in the law. A lively afternoon session will include simultaneous break-out sessions and roundtable discussions of specific implicit bias related topics. Audience participation will be welcomed and encouraged. The conference will close with a discussion of setting a forward looking and collaborative implicit bias agenda.”

RSVP for the conference here.

Here is the conference agenda.

Posted in Events, Implicit Associations, Law, Legal Theory, Situationist Contributors | Leave a Comment »

The Situation of Chicago School “Law and Economics”

Posted by The Situationist Staff on June 10, 2012

From Business Week (an article, by Peter Coy, including several quotations from Situationist Editor, Jon Hanson):

Q: How many Chicago School economists does it take to change a light bulb?
A: None. If the light bulb needed changing, the market would have done it by now.

Chicago-style free-market economics is an easy target for satire, but the movement that flourished at the University of Chicago’s economics department in the 1960s, ’70s, and ’80s really did change the world. Giants such as Milton Friedman, Gary Becker, Robert Lucas, and Eugene Fama provided the intellectual foundation for the political philosophy of President Ronald Reagan and British Prime Minister Margaret Thatcher. In his approach to tax cuts and deregulation, Republican presidential candidate Mitt Romney is an heir to that tradition.

It wasn’t just economics that Chicago revolutionized. Across campus at the University of Chicago Law School, scholars such as Ronald Coase, George Stigler, and Richard Posner were inspired to apply economic analysis to laws and regulations, developing a field that came to be called “law and economics.” It was law and economics types who promoted the now-conventional idea that the benefits of a regulation must be weighed against its costs. Placing a dollar figure on society’s valuation of a human life went from appalling to standard.

They rethought antitrust law, junking simplistic big-is-bad formulations to focus on whether a giant like IBM (IBM) or Microsoft (MSFT) could actually raise prices with impunity. In tort law, they questioned punitive damages that seemed to them motivated by righteous indignation rather than a cool calibration of how to discourage future wrongs. At the apogee of the Reagan-Thatcher era, Chicago Law drew enthusiastic support from businesses and foundations that embraced its small-government message. “Chicago can rightly claim to have been extraordinarily influential in the growth of the field,” says Jon Hanson, a Harvard Law School professor and specialist in psychology and law.

Now Chicago’s law and economics program is coping with problems born of its success. Its intellectual dominance has triggered a pushback from other social scientists who say it’s bloodless—treating people as if they are, or ought to be, perfectly rational calculators of their own self-interest. Even some true believers complain that the field has become too technical. Posner, a federal appellate judge in Chicago, wrote last year in the alumni magazine of the risk that “economic analysis of the law may lose influence by becoming too esoteric, too narrow, too hermetic, too out of touch with the practices and institutions that it studies.” Finally, so many other law schools have launched law and economics programs, and so many judges have learned the lingo, that today law and economics “is like the air you breathe. It’s just pervasive,” says David Weisbach, a Chicago Law professor. That ubiquity has made Chicago less distinctive.

Chicago Law doesn’t take such matters lightly. Last October, Dean Michael Schill announced a major initiative to deal with the challenges, to capitalize on the school’s place in history, and to keep law and economics relevant for the 21st century. He called it, predictably, Law and Economics 2.0. “Just as Chicago was at the forefront of the first wave of law and economics, so it shall be in the future,” he wrote to alumni.

Schill’s big idea is to open new frontiers, both intellectual and geographic. This summer the school will play host to 75 Chinese legal scholars, who will get to meet stars like professor emeritus Ronald Coase—still writing in the field at the age of 101. “Coase is a god in China,” says Omri Ben-Shahar, who is directing a newly created University of Chicago Institute for Law and Economics.

Meanwhile, Chicago Law professors are lobbing new bombs into the arena—fresh ideas for injecting economic thinking into law and regulation. Chicago Law professor Todd Henderson proposes paying bank examiners in part with “phantom” securities linked to the banking companies they regulate. The phantom bonds, essentially derivatives, would rise and fall in concert with a bank’s debt. If banks took too much risk, regulators would feel a hit to their own wealth. To keep regulators from getting so cautious that they ban legitimate transactions, Henderson would throw some phantom stock into their pay packages as well. “There is no reason we can think of why bank regulators should not be paid for performance,” he wrote in the spring 2012 issue of Regulation, a magazine published by the libertarian Cato Institute.

Chicago Law isn’t all about law and economics. President Barack Obama, after all, taught there from 1992 to 2004. So did Supreme Court Justice Antonin Scalia, from 1977 to 1982. (If only they’d overlapped!) Scalia’s brand of constitutional “originalism,” which deeply respects the intent of the Founding Fathers, is an alien idea to the law and economics crowd, who view law as something more useful than sacred.

Even within law and economics there’s ideological diversity. “I don’t think it lines up to any political agenda,” says Lee Ann Fennell, a specialist in property law. Fennell, daring to challenge a central tenet of law and economics, has written that sometimes property rights can be too strong—say, allowing irrational homeowners to block worthy projects even when accommodating them somehow would be better for all. Her solution: Create an exchange where property owners could surrender certain veto powers over land use for a price before conflicts ever arose. That would help new projects sail through.

Still, there is something to the critique that economics can blind legal scholars to other perspectives. The first generation of law and economics scholars reduced people to stick-figure profit-maximizers who would make rational choices every time. “They came into law schools saying, ‘We are social scientists and you are not,’” says Harvard Law’s Hanson. Their authority was undermined when a new wave of social scientists, including Daniel Kahneman, Amos Tversky, and Chicago’s Richard Thaler, presented evidence that people can be irrational, lack willpower, and have shifting, inconsistent senses of what’s in their own best interest.

The human actor in some of the newest law and economics writing is truer to life. Henderson, for example, acknowledges that for some people money isn’t the motivation: “Once diligence has been priced, perhaps some regulators will slack,” he wrote in Regulation.

But Hanson wonders whether law and economics scholars on the whole have gone far enough in incorporating humanity. A case in point: Should the question of motivation matter in assessing damages? A dispassionate law and economics analysis still might say no, while an ordinary juror would say unequivocally yes. As the great jurist Oliver Wendell Holmes Jr. once wrote, “Even a dog distinguishes between being stumbled over and being kicked.”

Defenders of Chicago-style law and economics want to be seen not as ideologues, but as realists. Posner again: “We ask not whether the economic approach to law is adequately grounded” in any particular ethical system, “but whether it is the best approach for the contemporary American legal system to follow.” That’s an appeal to an older Chicago intellectual tradition—pragmatism.

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Posted in Behavioral Economics, Choice Myth, Deep Capture, Ideology, Legal Theory | Tagged: , , | Leave a Comment »

The Situation of Inequality

Posted by The Situationist Staff on June 9, 2012

From  :

Talk by Richard Wilkinson and Kate Pickett co-authors of “The Spirit Level: Why Greater Equality Makes Societies Stronger” recorded January 8, 2010 at Hogness Auditorium, University of Washington, Seattle.

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Posted in Distribution, Life, Politics, Video | Tagged: , | 1 Comment »

The Political Situation of Support and Opposition to Gay Marriage

Posted by The Situationist Staff on June 6, 2012

Situationist friend Dave Nussbaum continues to write terrific posts over at, Random AssignmentsBelow, we have re-blogged portions of his recent post about how President Obama’s support of gay marriage led Republicans to become more opposed to it.

Yesterday, Andrew Sullivan posted a new Washington Post/ABC News poll tracking changes in approval for legalizing same sex marriage. Sullivan noted that following Obama’s announcement this month that his support of equal rights for same sex couples has “evolved” into support for marriage, there has been a rise in support for legalizing gay marriage among Democrats and Independents. Meanwhile, among Republicans the reverse is true:

“As the country as a whole grows more supportive of gay equality, the GOP is headed in the other direction. Republican support for marriage equality has declined a full ten points just this year – a pretty stunning result. Have they changed their mind simply because Obama supports something? In today’s polarized, partisan climate, I wouldn’t be surprised.

I wouldn’t be surprised either. This is how partisans often react to anything coming from the other side: whatever it is, they don’t like it. Partisans will argue that they are opposed to whatever it is the other side is proposing purely on its merits. We all like to believe that when we evaluate a policy we are responding to the policy’s content, but very often we’re far more influenced by who is proposing it.

For example, in a pair of studies published in 2002, Lee Ross and his colleagues asked Israeli participants to evaluate a peace proposal that was an actual proposal submitted by either the Israeli or the Palestinian side. The trick they played was that, for some participants, they showed them the Israeli proposal and told them it was the Palestinian one, or they showed them the Palestinian proposal and told them it came from the Israeli side (the other half of participants saw a correctly attributed proposal). What they found was that the actual content of the plan didn’t matter nearly as much as whose plan they thought it was. In fact, Israeli participants felt more positively toward the Palestinian plan when they thought came from the Israeli side than they did toward the Israeli plan when they thought it came from the Palestinians. Let me repeat that: when the plans’ authorship was switched, Israelis liked the Palestinian proposal better than the Israeli one.

The same is true when it comes to Democrats and Republicans. In a series of studies published by Geoffrey Cohen in 2003 (PDF), he asked liberals and conservatives to evaluate both a generous and a stringent proposed welfare policy. Although liberals tend to prefer a generous welfare policy and conservatives tend to prefer a more stringent one, the actual content of the policy mattered far less than who proposed it. Not only were liberal participants perfectly happy to support a stringent policy when it was proposed by their own party (while the reverse was true for conservative participants), neither side was aware of the influence of the source of the policy proposal. So even though their partisan affiliations were more important than the content of the policy, both liberal and conservative participants claimed that they were basing their evaluations of the welfare policy strictly on its content. New research by Colin Tucker Smith and colleagues, published in the current issue of the journal Social Cognition (4), suggests that the influence of the policy’s source on our evaluation of the policy’s content happens at an automatic level and can happen without our awareness.

So perhaps it should not be terribly surprising that President Obama’s support for marriage equality has led to increased support among Democrats and more opposition from Republicans. . . . [continued]

Read the entire post on Random Assignments.

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Posted in Classic Experiments, Conflict, Emotions, Ideology, Morality, Naive Cynicism, Social Psychology | Tagged: , , | Leave a Comment »

Malcolm Gladwell on the Situation of Equality Discourse

Posted by The Situationist Staff on June 5, 2012

Malcolm Gladwell discusses America’s dramatically changing notions of wealth and income inequality since the mid-20th century. Gladwell notes that top-earning Americans faced a 91% income tax rate during most of the 1950s.

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Posted in Distribution, Ideology, Politics, Video | Tagged: | Leave a Comment »

The Power of Stereotypes and Need for “Affirmative Meritocracy”

Posted by The Situationist Staff on June 3, 2012

From Stanford University News:

When it comes to affirmative action, the argument usually focuses on diversity. Promoting diversity, the Supreme Court ruled in 2003, can justify taking race into account.

But some people say this leads to the admission of less qualified candidates over better ones and creates a devil’s choice between diversity and merit.

Not so, says Stanford psychologist Greg Walton. Diversity and meritocracy are not always at odds.

In fact, sometimes it is only by taking race and gender into account that schools and employers can admit and hire the best candidates, Walton argues in a paper slated for publication in the journal Social Issues and Policy Review with co-authors Steven J. Spencer of the University of Waterloo and Sam Erman of Harvard University.

Walton, an assistant professor of psychology, and Spencer plan to present their findings to the Supreme Court in an amicus brief in Fisher v. University of Texas, a case the justices are scheduled to hear next fall and that many court watchers believe threatens to upend affirmative action. (Supreme Court rules bar Erman, who was a recent Supreme Court clerk, from participating in the brief.)

“People have argued that affirmative action is consistent or is not consistent with meritocracy,” Walton said. “Our argument is not that it’s consistent or inconsistent. Our argument is that you need affirmative action to make meritocratic decisions – to get the best candidates.”

The researchers say that people often assume that measures of merit like grades and test scores are unbiased – that they reflect the same level of ability and potential for all students.

Under this assumption, when an ethnic-minority student and a non-minority student have the same high school grades, they probably have the same level of ability and are likely to do equally well in college. When a woman and a man have the same score on a math test, it’s assumed they have the same level of math ability.

The problem is that common school and testing environments create a different psychological experience for different students. This systematically disadvantages negatively stereotyped ethnic minority students like African Americans and Hispanic Americans, as well as girls and women in math and science.

“When people perform in standard school settings, they are often aware of negative stereotypes about their group,” Walton says. “Those stereotypes act like a psychological headwind – they cause people to perform worse. If you base your evaluation of candidates just on performance in settings that are biased, you end up discriminating.”

The conclusion comes out of research on what is called stereotype threat – the worry people have when they risk confirming a negative stereotype about their group. That worry prevents people from performing as well as they can, hundreds of studies have found.

As a consequence, Walton says, “Grades and test scores assessed in standard school settings underestimate the intellectual ability of students from negatively stereotyped groups and their potential to perform well in future settings.”

Walton gives an example of how stereotype threat relates to preferences in admissions or hiring.

A woman and a man each apply to an elite engineering program, he says. The man has slightly better SAT math scores than the woman. He gets accepted to the program, but she does not.

“If stereotype threat on the SAT undermined the woman’s performance and as a consequence caused her SAT score to underestimate her potential, then by not taking that bias into account, you have effectively discriminated against the woman,” Walton says.

Walton and his colleagues argue that schools need to take affirmative steps to level the playing field and to make meritocratic decisions. If the SAT underestimates women’s math ability or the ability of African American students, taking this into account will help schools both admit better candidates and more diverse ones.

While courts have ruled that diversity justifies taking race into account in admissions decisions, justices have not considered meritocracy as a reason for sorting by race.

“Our argument is that it is only by considering race that you can make meritocratic decisions,” Walton says. “It’s a separate argument from the diversity argument.”

Walton’s research provides the justices with another reason for upholding affirmative action.

But confronting legal questions is only part of the issue.

Walton says remedies need to be found in policy, as well. Environments need to be created that are fair and allow people to do well.

“The first step is for organizations to fix their own houses,” he says.

Testing officials should look at how they administer tests and ask what they can do to mitigate the psychological threats that are present in their settings that cause people to do poorly, Walton says.

Schools and employers, he continues, should look into their own internal environments and ask how they can make those environments safe and secure so everyone can do well and stereotypes are off the table.

But if stereotype threat was present in a prior environment, hiring and admissions decisions need to take that into account.

“In taking affirmative steps,” Walton, Spencer and Erman write, “organizations can promote meritocracy and diversity at once.”

The Citation: Walton, G. M., Spencer, S. J., & Erman, S. (in press). Affirmative meritocracy (pdf). Social Issues and Policy Review.

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For a collection of previous Situationist posts discussing how situation influences standardized test scores, click here.

Image from Flickr.

Posted in Abstracts, Conflict, Distribution, Education, Implicit Associations, Social Psychology | Tagged: , , , , | 1 Comment »

Corporations, Cars, the U.S.A., and Us

Posted by The Situationist Staff on June 1, 2012

Benjamin Levin just posted his excellent article “Made in the USA: Corporate Responsibility and Collective Identity in the American Automotive Industry” (forthcoming Boston College Law Review, Vol. 53, No. 3, p. 821, 2012) on SSRN.  Here’s the abstract:

This Article seeks to challenge the corporate-constructed image of American business and American industry. By focusing on the automotive industry and particularly on the tenuous relationship between the rhetoric of automotive industry advertising and the realities of doctrinal corporate law, I hope to examine the ways that we as social actors, legal actors, and (perhaps above all) consumers understand what it means for a corporation or a corporation’s product to be American. In a global economy where labor, profits, and environmental effects are spread across national borders, what does it mean for a corporation to present the impression of national citizenship? Considering the recent bail-out of the major American automotive corporations, the automotive industry today becomes a powerful vehicle for problematizing the conflicted private/public nature of the corporate form and for examining what it means for a corporation to be American and what duties and benefits such an identity confers.

By examining the ways in which consumable myths of the American corporation interact with the institutions and legal regimes that govern American corporations, I argue that the advertised image of the national in the global economy serves as a broad corporate veil, a way of obscuring the consumer’s understanding of corporate identity and corporate accountability. With these overarching issues and questions as a guide, this Article will historically situate the identification of corporate nationality within a broader framework of debates on corporate social responsibility and interrogate the way that we conceive of the American corporation and corporate decision making.

Download the article for free here.

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Posted in Deep Capture, History, Ideology, Law, Marketing, Politics | Tagged: , , , , , , | Leave a Comment »

 
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