trigger incentive-caused bias in a lending officer? My answer puts most blame on

the accountants and other senior people who created the accounting system. These

people became the equivalent of an armored car cash- carrying service that

suddenly decided to dispense with vehicles and have unarmed midgets hand-carry

its customers’ cash through slums in open bushel baskets.

 

I wish I could tell you that this sort of thing no longer happens, but this is

not so. After Westing- house blew up, General Electric’s Kidder Peabody

subsidiary put a silly computer program in place that allowed a bond trader to

show immense fictional profits. And after that, much accounting became even

worse, perhaps reaching its nadir at Enron.

 

And so incentive-caused bias is a huge, important thing, with highly important

antidotes, like the cash register and a sound accounting system. But when I came

years ago to the psychology texts, I found that, while they were about one

thousand pages long, there was little therein that dealt with incentive-caused

bias and no mention of Patterson or sound accounting systems. Somehow

incentive-caused bias and its antidotes pretty well escaped the standard survey

courses in psychology, even though incentive-caused bias had long been displayed

prominently in much of the world’s great literature, and antidotes to it had

long existed in standard business routines. In the end, I concluded that when

something was obvious in life but not easily demonstrable in certain kinds of

easy- to-do, repeatable academic experiments, the truffle hounds of psychology

very often missed it.