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September 25, 2012 | Q&A

Decision Making and Negotiation: Choice and Collaboration

Daniel Ames, who coordinates the School’s Decision Making and Negotiations Cross-Disciplinary Area, discusses the program's impact and highlights the contributions the Columbia Business School scholars are making in this critical field.


What is the role of the Decision Making and Negotiations Cross-Disciplinary Area at the School — why is it important that the school embark on a cross-disciplinary effort in decision making and negotiation?

It‘s just critical that we — individuals, professionals, leaders, policy makers — get decision making and negotiations right in order to be effective. And in a world that is increasingly complicated and fast paced and globalized that challenge grows greater and greater.

We have some of the world’s best scholars on these topics across our five academic divisions. We saw an opportunity to deliver even more in this area by helping bridge our existing resources. We‘ve always talked as colleagues, marketing to economics, management to marketing, and so on. But the Decision Making and Negotiations Cross-Disciplinary Area — what we call the DNA — was really meant to fuel those conversations, to help people have better dialogue with each other, to improve each other’s research, to make us even more effective in our teaching.

What are the program’s key activities?

We focus on three pillars. The first pillar is recruiting. We‘re always looking for opportunities to bring in new people who are doing ground-breaking work and who will complement the terrific collection of scholars already here. We conduct cross-disciplinary searches, where faculty across divisions work together to identify the most exciting people to recruit. These are long complicated processes but I‘m thrilled that we‘ve succeeded in bringing in several of the world’s top scholars on decision making and negotiations. They are already having a great impact on our teaching and research climate.

The second pillar is helping our faculty connect with one another. Our ongoing series of faculty workshops allows faculty members from across divisions to present their ongoing research to each other. It‘s an opportunity for us to engage not only with the researcher describing his or her new work but also with each other, to connect the dots and improve each other’s thinking. It‘s fascinating to hear an economist debating someone from marketing about research done by a sociologist.

The third pillar is teaching and curriculum development, supporting the School’s ability to share expertise with students on decision making and negotiations. For example, this past summer we brought together our negotiations course teaching team —a dozen or so faculty members — and a handful of our senior executives in residence to hear about their experiences in deal making and negotiations. Now we can bring that experience back to the classroom.

Can you tell us a little about exciting projects underway and on the horizon?

There are many. One rapidly evolving area in the social sciences is the integration of biological analysis into our models, including psychophysiology and brain imaging. What‘s going on with our bodies, our hormones, our stress levels as we work? Modupe Akinola looks at the impact of stress on productivity and creativity. Malia Mason and Elke Weber, among others, use neuro-imaging techniques to understand the brain: What happens when we are paying attention to something or not paying attention to something? What does it mean in the brain to have a preference or to think about risk? A new generation of research is emerging that treats people as biological objects and tries to understand how our biology gives rise to decision making and deal making. The School is well poised to contribute here; we have some of the world’s experts on our faculty and the University as a larger institution has a tremendous amount of activity and resources around human biology and brain function.

Decision scholarship is also moving into what I‘d call a post-bias world. Not that bias has gone away, but we‘re getting beyond simply documenting biases that shape decisions — for example, the confirmation bias, when people interpret ambiguous evidence to fit their initial hunches — to looking at how we can create environments for better decision-making. Our research is increasingly focusing effort on choice architecture, how to set up conditions to mitigate biases and ultimately make choices that are more productive and effective. Eric Johnson is a leader in this area and has focused on the importance of defaults: the standard or default choice that is offered can have a huge effect on people’s choices. By changing default choices you can lead people to make choices that they may be more satisfied with in retrospect.

Globalization and cultural diversity is another critical area. Organizations increasingly reflect the world’s nations and economies. Decision making and deal making will inevitably involve more diverse teams and more cultural divides. Michael Morris has looked at how values and norms differ from one culture to the next and how those differences come to life in choices and behavior, helping us to understand where gaps or friction are likely to arise.

More broadly, our faculty is an incredibly diverse group working with a phenomenally diverse student body in one of the most globalized and diverse cities in the word. That places us in a unique position to make research contributions and to teach effectively about how to operate in heterogeneous environments.

Another emerging area making great gains is moral decision making. Some of Kathy Phillips’ ongoing research looks at the impact of diversity in these contexts. What‘s the role of diversity in ethical decision-making? And you can flip that on its head: What‘s the effect of homogenous teams and homogenous organizations on moral decision making? The answers to these questions are starting to emerge.

How has new technology impacted the field?

New technologies make this an especially exciting time to be in the social sciences because they are having impact in a few different ways, and the landscape is changing quickly.

Many of us use online tools that didn‘t exist even a few years ago, allowing us to get outside of our local labs and reach people across the world. And it‘s increasingly cost efficient.

In that same vein, tools are emerging that allow us to record more accurate and far-reaching measurements than we could just a few years ago. Olivier Toubia and Eric Johnson, for instance, use computer technology with adaptive questions — surveys that change depending on how you answer the initial questions. They use the answers to reveal things like time preferences for money and respondents’ willingness to discount future outcomes. (Listen to Eric Johnson explain more about how time preference works in this podcast.)

Technology not only affects our work as scientists but it has changed the environment in which people are making decisions everyday. Stephan Meier has shown that text messaging can affect people’s financial behavior, including whether and how much they save — he has explored how savings rates change when people have peers send them text reminders about their savings goals. A few years ago that context didn‘t exist. Or consider online rating systems, which allow people to see the reputation of a particular seller or vendor. Ko Kuwabara is looking at how people process this information and how it affects their choices online. We as scholars are studying the changing contexts that technology presents and trying to understand the effects they have.

Here again Columbia is well positioned: we‘re at a School and in a city that are increasingly seen as entrepreneurial fountains of emerging technology and social media. We are neighbors with the future here — able to see and connect with people who are producing these new technologies in this new environment and reflect that in our research and teaching.

What are other big questions in the field that the DNA is exploring and that you anticipate it will explore?

Well, some of the biggest questions in this area are questions that scholars and philosophers have been wrestling with for thousands of years. We remain preoccupied with them because they are profound mysteries with big effects — and are far from easy to understand.

Take cooperation and pro-social behavior: why and when do people come together to cooperate with and help one another rather than compete and attack and undermine one another? That‘s a question for our societies, organizations, and personal lives. How do you get people with different agendas, sometimes from different cultures, to pull together? Another big set of questions concerns how people make financial and economic decisions. How do people spend, how do they invest, when and why and how much do they borrow, and what is it to have a preference that gets expressed in our financial behavior? Another area concerns moral decision making: what leads people to make the right decision or fail to make the right decision?

These are enduring questions in the social sciences, and they are fascinating topics for those of us who do research. But they also have very high stakes for professionals, leaders, policy leaders — everyone in their daily lives. Our scholarship can help people rise to the challenges implicit in these questions.

On a more personal note, what led you to this field and what keeps you in it?

I just find people fascinating, and I‘m interested in how decision making and deal making come to life as interpersonal episodes. How does that lead people to get along or work effectively together, or fail to do so? There is a catalog of reasons for why people are ineffective and I sometimes end up thinking, how can people be so foolish that they fail to read each other correctly, or to see something that in retrospect looks so obvious about the environment?

But on the other hand, there are several billion of us who make it through each day, with many of us working together to make sensible decisions and solve problems, to reach amicable agreements that work for both sides. So I also look at people and think we‘re geniuses, it‘s amazing what we‘re capable of.

So I marvel at our capabilities, but I also sometimes am stunned by how foolish we can be. And my research weaves between those two things, and on any given day of the week I may place more emphasis on one of those than the other. That dilemma, that tension, is what propels my own energy and effort.

Daniel Ames is Professor of Management and coordinator of the Decision Making and Negotiations Cross-Disciplinary Area at Columbia Business School.


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