Everything Is Obvious_ _Once You Know the Answer - Duncan J. Watts [149]
32. Easterly (2006, p. 6).
CHAPTER 9: FAIRNESS AND JUSTICE
1. Herrera then sued the city, which in 2006 eventually settled for $1.5 million. Three other officers who were involved in the incident were fired, and overall seventeen members of the 72nd precinct, including the commander, were disciplined. Police Commissioner Kerik opened an investigation into the operation of the midnight shift, which was apparently known to suffer from poor supervision and lax routines. Both Mayor Giuliani, and his successor, Michael Bloomberg, weighed in on the case, as did Governor Pataki. The legal status of the unborn baby Ricardo resulted in a fight between the medical examiner, who claimed the baby did not live independently of its mother and was therefore not to be considered a separate death, and the district prosecutor, who claimed the opposite. From the initial reports of the accident through the settlement of the lawsuit, the New York Times published nearly forty articles about the tragedy.
2. For a discussion of the relationship between rational organizing principles and the actual functioning of real social organizations, see Meyer and Rowan (1977), DiMaggio and Powell (1983), and Dobbin (1994). For a comprehensive treatment of the “new institutionalist” view of organizational sociology, see Powell and DiMaggio (1991).
3. See Menand (2001, pp. 429–33) for a discussion of Wendell Holmes’s reasoning.
4. The psychologist Ed Thorndike was the first to document the Halo Effect in psychological evaluations (cite Thorndike 1920). For a review of the psychological literature on the Halo Effect, see Cooper (1981). For the John Adams quote, see Higginbotham (2001, p. 216).
5. For more examples of the Halo Effect in business, see Rosenzweig (2007). For a glowing story about the success of Steve & Barry’s, see Wilson (2008). For a story about their subsequent bankruptcy, see Sorkin (2008).
6. See Rosenzweig (2007, pp. 54–56) for more examples of attribution error, and Staw (1975) for details of the experiment that Rosenzweig discusses.
7. To illustrate, consider a simple thought experiment in which we compare a “good” process, G, with a “bad” process, B, and where, just for the sake of the example, G has a 60 percent chance of success, while B succeeds only 40 percent of the time. If you think this isn’t a big difference, imagine two roulette wheels that produced red outcomes 60 percent and 40 percent of the time—betting on red and black, respectively, one could quickly and easily make a fortune. Likewise, a strategy for making money in financial markets by placing many small bets would do very well if it paid out equal amounts of money 60 percent of the time, and lost them 40 percent of the time. But imagine now that instead of spinning a roulette wheel—a process we can repeat many times—our processes correspond to alternative corporate strategies or education policies. This now being an experiment that can be run only once, we observe the following probabilities
Prob[G succeeds while B fails] = 0.6 * (1 - 0.4) = 0.36
Prob[B succeeds while G fails] = 0.4 * (1 - 0.6) = 0.16
Prob[G and B both succeed] = 0.6 * 0.4 = 0.24
Prob[G and B both fail] = (1 - 0.6) * (1 - 0.4) = 0.24
In other words, it is more likely that G will do at least as well as B than the other way around—just as one would expect. But it is also the case that only one time in three, roughly, will G succeed while B fails. Almost half the time, in fact, both strategies perform equally well—or poorly—and one time out of six, it will even be the case that B will succeed while G fails. With almost two-thirds probability, it follows that when the good and bad processes are run side by side, the outcomes will not accurately