One of the more irksome aspects of working in finance is that the members of the profession who get the most attention tend to be the worst possible assholes. This probably rings true in many fields, but public biases are particularly strong when it comes to hedge fund managers and corporate financial officers and the like. It doesn't help when certain members of these professions loudly proclaim their admiration for film depictions of obviously psychopaths like Gordon Gekko and Jordan Belfort.
So it's fair to ask whether psychopaths are more prevalent in business than elsewhere. And why not trace this question back to the source: business schools. Thankfully, a PhD student has done just that, and while the answer might disappoint, it will not surprise:
“Business students are more likely to fit the prototypical profile of a psychopath, including being more likely to be rebellious, manipulate others, and have a propensity towards guiltlessness. [...] Fundamental differences in psychopathic personality can help explain why business students deceive others more often compared to nonbusiness students.”
The author, Corey Shank of the University of Texas-Rio Grande Valley, reached the findings* after subjecting 120 business majors and 129 non-business majors to an ethics experiment and a few tests to determine their “psychopathic profile.” Echoing paststudies, the psychopath test (a real thing!) showed a higher share of business majors scoring at or near the Patrick Bateman end of the spectrum.
More revealing, however, was the ethics experiment. Participants played a so-called Cheap Talk game in which they were told they would be competing anonymously, via computer, with another student in a different class. In reality they were just interacting with a computer program. In the game, a human participant we'll call the “sender” knows that there are two possible outcomes: A, which gives their unseen counterpart more money, and B, which gives the sender more money. The student is also told that their counterpart doesn't know which outcome is which. The sender then chooses which message to send to the counterpart:
A: “Option A will earn you more money than Option B.”
B: “Option B will earn you more money than Option A.”
Message A is true; message B is a lie. But telling the lie might bring in more money for the participant sending the message. A dilemma!
In a trial where the payoff differential was just $1 – i.e., when the sender would get $6 for lying and the recipient just $5, versus $5 for the sender and $6 for the recipient if truth prevailed – business students were a little less likely than their humanities peers to lie for the extra dollar, 47 percent versus 50 percent. But when the differential was $10, the proportion of business students willing to deceive shot up to 61 percent, with liberal arts types at 54 percent. When there was more profit to be maximized, business majors channeled their inner Madoff.
Unsurprisingly, those who scored highest on the psychopath test were even more likely to screw over their imaginary counterparts in the game; 71 percent did so for a dollar more, 82 percent for $10 more.
Needless to say, it's still just a small fraction of business students who exhibit such anti-social traits. And there is one silver lining for business schools. In the third leg of the study, participants read a story about a “Mr. Johnson” who knowingly sells his lemon of a car to a rube who doesn't know he'll eventually have to replace a faulty component. In general, business students were more likely than their counterparts to rate this action as “very unfair.” But still, there's a catch here: “These results show that while business students are more likely to deceive others, they view the deception as unethical when it is committed by others.”
All of this fits with previous scholarship in the surprisingly fecund field of business psychopathy studies. One famous paper found that while psychopaths make up less than 1 percent of the general population, the share is closer to 4 percent in the senior management positions. As psychopathy luminary Robert Hare once said, “Not all psychopaths are in prison – some are in the board room.” Still others are in business school. We look forward to bringing you Dealbreaker's Inaugural Business School Psychopathy Rankings in 2018.
* Note: Not peer-reviewed!