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      In Favor of Clear Thinking: Incorporating Moral Rules into a Wise Cost-Benefit Analysis
      13 Aug 2009Working Paper Summaries

      In Favor of Clear Thinking: Incorporating Moral Rules into a Wise Cost-Benefit Analysis

      by Max H. Bazerman and Joshua D. Greene
      Policy decisions may be the most important set of decisions we make as a society. In this realm, moral rules often play an active and dysfunctional role. The typical way in which we make decisions—by weighing them individually—leads us to overuse moral rules in a manner that is inconsistent with the more reflective set of preferences we would identify through joint consideration of options. In their response to a companion article in Perspectives on Psychological Science, Max Bazerman, of HBS, and Joshua D. Greene, of Harvard University, argue that cost-benefit analysis (CBA) is unfairly stereotyped. The critique of CBA in the companion article could be better framed as a set of considerations that can contribute to more careful CBAs. Key concepts include:
      • Good decision analysts pay attention to potential misapplications of cost-benefit analysis.
      • CBA is not perfect, for many reasons. But CBA needs to be compared against an alternative, and the development of that alternative thus far is limited.
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      Author Abstract

      Bennis, Medin, and Bartels (2009) have contributed an interesting paper on the comparative benefit of moral rules versus cost-benefit analysis. Many of their specific comments are accurate, useful, and insightful. At the same time, we believe they have misrepresented cost-benefit analysis and have reached a set of conclusions that are misguided and, if adopted wholesale, potentially dangerous. Overall, they offer wise suggestions for making CBA more effective, rather than eliminating CBA as a decision-making tool. 11 pages.

      Paper Information

      • Full Working Paper Text
      • Working Paper Publication Date: July 2009
      • HBS Working Paper Number: 10-001
      • Faculty Unit(s): Negotiation, Organizations & Markets
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        Max H. Bazerman
        Max H. Bazerman
        Jesse Isidor Straus Professor of Business Administration
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