Abortion, 136-39
admissions policies, 109-12, 163-65
conflicts of interest, 47-50, 56-61, 63-64
“learn now, pay later” plans, 185-87
legacy admissions, 110-12, 164
unethical behavior in, 45-50, 56-61, 63-64, 109-12
Access International Advisors and Marketers, 123-24
Accounting, unethical behavior in, 36-41, 50-55, 61-63, 87-92
“Acquiring a Company” problem, 141-46
Acquisitions, 94
lemon problem and, 141-46
Actual, The (Bellow), 181
Adjustable rate mortgages, 129
Adoboli, Kweku, 97-98
Advertising, and misdirection, 71-74
Affirmative action, 109-10
Affymetrix, 77
Airline security, 177
Airplane pilots, 12
Alston & Bird, 27
American Accounting Association, 63
American Anthropologist, 168
Army Corps of Engineers, 178
“The Artful Dodger” (Rogers and Norton), 77-78
Arthur Andersen, 36, 51-53, 87, 89, 91, 176
Asian Americans, college discrimination against, 163-65
Auctions, 117-22
penny, 117-22
psychology of, 118-22
Auditing, 36, 50-55, 60, 64, 65, 66, 176
conflicts of interest, 50-55, 61-63
reform, 61-63
unethical behavior, 36-41, 50-55, 61-63, 87-92
Augenblick, Ned, 121
Aventis, 156-57
Ayres, Ian, 187
Babcock, Linda, 53
Bailey, Don M., 157
Banaji, Mahzarin, xv-xvi, 67-68
Bangladesh garment factory fire (2012), 154-56
Banking, 31-34
fraudulent practices, 31-34, 39-45, 74, 97-98, 122-31, 178-80
Libor scandal, 42-45
regulation, 42-45
2008 financial crisis, 31, 39, 64-65, 74, 126-31, 177, 178-80
Bank of England, 44
Barclays, 42-43
Barings, 97
Baron, Jon, 107
Batson, Dan, 10
Behavioral psychology, 6
Belichick, Bill, 24
Bellow, Saul, 181
Bennis, Warren, 181
Berger, Eric, 167
Bigotry, 148
Big Short, The (Lewis), 131, 178-79, 184
Blame, 183
Blanco, Kathleen, 168
Blankfein, Lloyd C., 74
Catholic Church sex abuse scandal, 21-23, 30
change, 88-89
implicit, 50-61
industrywide, 47-66
Sandusky scandal, 16-21, 23, 30
slippery slope, 86-100
Blitz gas cans, 152-54
Bloomberg, Michael, 138
Board oversight, 36-42
Satyam, 39-41
“Boiling frog” folk tale, 90
Boston University, 7
Bounded ethicality, 54
Bounded rationality, xix
Bourne, Joel, 168
Bradstreet, Bernard F., 95-96
Breast cancer, 136-39
Brennan, Edward, 162
Bridge, playing, 105-6
Brinker, Nancy, 137-39
British Petroleum (BP), 133-35
Gulf of Mexico explosion (2010), 133-35
Brown, Lord John, 133-34
Brown, Michael, 174
Burger, Warren, 51
Burry, Michael, 178-80
Bush, George W., 27, 28, 29, 64
Buyers, 131-32
“Acquiring a Company” problem, 141-46
cynicism and, 146-50
“hidden card game” and, 148-50
ill-informed, challenges for, 139-45
lemon problem and, 139-50
California, 138
Camerer, Colin, 53
Campaign finance reform, 175-76
Cancer, 25
breast, 136-39
drugs, 157-59
Cantril, Hadley, 24
cheats, 70
“hidden card game,” 148-50
accidents, 12-13
electronic devices used while driving, 12-13
radio shows, 7-10
Car Talk (radio show), 7-10, 11
Catholic Church, 25
Cell phones, 12-13
Cendant, 87
CEOs, 38, 39, 74, 77, 78, 79, 123, 143
thinking ahead, 133-39
Chabris, Chris, xvi, 12, 88-89
Challenger explosion, xx, 5-7, 12, 82
Change blindness, 88-89
Chase Home Finance, 128
Chen, Carolyn, 163-64
Chicago, 170
Choice architecture, 190
Cholesterol, 11
Christie, Chris, 171
Chronicle of Higher Education, 47, 48, 110
Cigarette smoking, 25-30
Citibank, 43
Clark, Louis, 29
Clemens, Roger, 34
Clinton, Bill, 98-99, 127, 175
Lewinsky scandal and, 98-99
Clinton, Hillary, 98
Coburn, Tom, 77
Cognition, 47
Collateralized debt obligations, 128
College, “learn now, pay later” plans for, 185-87
College admissions, 109-12, 163-65
affirmative action and, 109-10
discrimination against Asians, 163-65
unethical behavior in, 109-12, 163-65
Computers, 117
auctions, 117-22
retail market, 160-62
seller, 149
Conflicts of interest, 47-66
in academia, 47-50, 56-61, 63-64
credit-rating agencies and, 64-66
who doesn’t notice, 66
Congress, 33, 36, 64, 130, 168
Copperfield, David, 68
Corporate board oversight, 36-42
Cost-benefit analysis, 177
Countrywide, 127-28
Creary, Stephanie, 148
Credit default swaps (CDSs), 128-29
Credit-rating agencies, 64-66
Curley, Tim, 18-19
Cynicism, 146-50
thinking ahead and, 146-50
Dartmouth University, 24
Data fraud, 47-66
Davis, Tom, 174
DealDash, 120
Decision making, xvi-xvii, xx, 6, 13, 29-30, 119, 147, 182
avoiding predictable surprises, 166-80
executive class in, 1-5
indirect actions and, 151-65
leaders’ failure to notice and, 31-46
misdirection and, 67-85
missing information and, 101-16
motivated blindness and, 16-30
slippery slope and, 86-100
thinking ahead, 133-50
“too good to be true” measure and, 117-32
De la Villehuchet, René-Thierry Magon, 123-24
Delaware, 170
Department of Justice (DOJ), 25-29
Depository Trust and Clearing Corporation (DTCC), 125-26
Dickens, Charles, 77
Dimon, Jamie, 31-33
Diplomacy, xvi-xviii
Doctors, 64
Dodging questions, 75-78, 79-80
“Do no harm” rule, 173-74
Doty, James, 51
Doyle, Arthur Conan, 101-6
Drew, Ina, 31-33
Drugs, 156-59
companies, unethical practices of, 156-59
orphan, 156-59
prices, 156-59
Dylan, Bob, xiii
Earnings management, 87-92
unethical behavior in, 25, 36-38, 50-53, 55, 86-92
Eggleston, W. Neil, 37
Elmburg, Cy, 152
Enron, xxi, 36-38, 41, 87, 176
auditing, and corrupt behavior, 36-38, 41, 50-53, 87, 89, 91, 92, 176
Environmental disasters, predictability of, 166-71, 174, 175, 178
Errors of omission, 106-9
Ert, Eyal, 148
Escalation of commitment, 95-99
Expected value maximization, 148
External attributions, 183
Factory safety, 154-56
Fannie Mae, 126-28
Fastow, Andrew, 55
Federal Emergency Management Agency (FEMA), 168, 174, 178
Feeder funds, 123
Felcher, Marla, 25, 29, 147, 153
Financial crisis of 2008, 31, 39, 64-65, 74, 126-31, 177, 178-80
as predictable surprise, 178-80
First-class noticers, creating, 189-91
Five Easy Pieces (film), 14-15
Florida, 128
Flu vaccine, 106-7
Foley, James, 21
Football, 24
motivated blindness and, 16-21, 24
Penn State, 16-21
Princeton vs. Dartmouth, 24
Ford Motor Company, 162
Ford Pinto, 162
Freddie Mac, 126-28
Front-running, 125
Game shows, 112-16
Game theory, 145-46
Gap Inc., 155
Gasket failure, in car racing, 2-5
Geithner, Timothy, 44
General Electric, 87
Genovese, Kitty, 30
Gergen, David, xiv
Germany, 24
Global warming, 173
Goal setting, 159-62
Goldman Sachs, 74
Gore, Al, 177
Government Accountability Project, 29
Great Britain, 32, 42, 98, 101, 146-48
Greene, Joshua, 158
Guardian, 44
“The Haggler” (Segal), 160-62
Hague, The, 48-49
Hall, Monty, 113-15
Handel, Karen, 137-38
Hart, John, 77
Harvard Business School, xiv, xx, 7, 79
Harvard Graduate School of Education, 110
Harvard Kennedy School Center for Public Leadership, xiv
Harvard University, 47, 95, 110, 111, 163, 164, 185
Hastorf, Albert H., 24
Hauser, Marc D., 47-50, 55, 58
Hayward, Tony, 133-35
HealthSouth, 92
Hebrew University, 107
Henriques, Diana, 125
“Hidden card game,” 148-50
Hitler, Adolf, 24
HIV virus, 176
Holmes, Sherlock, 101-6
House Oversight and Government Reform Committee, 65
Housing market, xxi, 64, 74, 126-31
2008 financial crisis and, 64-65, 74, 126-31, 177, 178-80
Houston Chronicle, 167
Hudson Mezzanine fund, 74
Hughes, John, 97
Hurricane Irene, 170
Hurricane Katrina, 166-70, 174, 175, 177, 178
Hurricane Sandy, 169-71
Hurricanes, predictability of, 166-71, 174, 175, 178
Hurvitz, Michael, 110
Iacocca, Lee, 162
Iksil, Bruno, 32-33
Ill-informed buyer, challenges for, 139-45
Immigrants, 111
Impact Assessment, Inc., 168, 169
Implicit blindness, 50-61
Inattentional blindness, 12-13, 17
India, 39-41
Indian Stock Exchange, 39
college discrimination against Asians, 163-65
drug prices and, 156-59
factory safety, 154-56
failure to notice, 151-65
goal setting and, 159-62
leadership challenge and, 165
product safety and, 151-56, 162
Insider/outsider distinction, 187-88
Insurance companies, 129
Intellectual property, use of, 78-79
Internal attributions, 183
Investment advisers, unethical behavior of, 122-26
Invisible Gorilla, The (Chabris and Simons), xvi
Irons, Larry, 168
Issacharoff, Sam, 53
Jaedicke, Robert K., 36
JCPenney, 155
Johnson, James, 127
Johnson, Lyndon B., 76
JPMorgan Chase, 31-33
Kahlenberg, Richard, 164
Kahneman, Daniel, xviii, xix, xx, 36, 188
Kalavakolanu, Sridevi, 155
Kamenica, Emir, 120
Kassam, Karim, 158
Kelly, Linda, 19
Kennedy, John F., 76
Komen Foundation, 136-39
Kurzweil, Raymond C., 95-96
Kurzweil Applied Intelligence (KAI), 95-96
Law, Cardinal Bernard F., 21-23, 30
Lawsuits, 94
Lawyers, 64
Lay, Kenneth, 55
Lazaro, Ladislas IV, 156
Leadership, xiii-xxi, 31-46, 166-80, 182
avoiding predictable surprises, 166-80
baseball, 34-36
board oversight, 36-42
failure to notice, 31-46
indirect actions and, 151-65
ordinary, 45-46
thinking ahead, 133-50
“Learn now, pay later” plans, 185-87
Ledley, Charlie, 180
“Lemon law,” 141
Lemon problem, for buyers, 139-50
Let’s Make a Deal (TV show), 113-15
Levitt, Arthur, 87
Lewinsky, Monica, 98-99
Lewis, Michael, 131, 178-79, 184-85
Libor scandal, 42-45
Lippmann, Greg, 180
Logistic regression, 4
Logrolling, 80-81
Los Angeles, 22
Lovallo, Dan, 188
Lucent, 87
Madoff, Bernard, xxi, 25, 55, 86, 123-26, 177
Magicians, 67-70
Magliozzi, Ray, 7-10
Magliozzi, Tom, 7-10
Mai, Jamie, 180
Major League Baseball, 34-36, 63-64, 184-85
Malhotra, Deepak, 79
Management schools, 80-81
Market Basket system, 160-62
“The Market for Lemons” (Akerlof), 139-41, 142
misdirection, 71-74
Markopolos, Harry, 124-26
Marriage, 13
McCallum, Robert D., Jr., 27-29
McNamara, Robert, 76
McQueary, Mike, 17-18
Media, 23, 28, 59, 76, 86, 98, 135, 137, 138, 139, 156, 167
Merck, 157-58
Mergers and acquisitions, 94
Merrill Lynch, 40
Mind-set, noticing, 182-83
Misdirection, 67-85
magicians, 67-70
marketing, 71-74
negotiations, 78-82
politicians, 75-78
seeing through, 84-85
team, 82-84
Missing information, 101-16
errors of omission, 106-9
game shows, 112-16
Sherlock Holmes and, 101-6
university admissions and, 109-12
Mohideen, Jezri, 43
Moneyball (Lewis), 184-85
Moore, Celia, 98
Morgan, Kimberly, 53
Mortgage-backed securities, 126-31, 178-80
Motivated blindness, 16-30, 110
Catholic Church sex abuse scandal, 21-23, 30
definition of, 23-24
DOJ prosecution of tobacco industry, 25-30
leadership’s failure to notice, 31-46
Sandusky scandal, 16-21, 23, 30
Mustargen, 157-58
Myers, Matt, 28-29
Myerson, Roger, 145-46
Nalebuff, Barry, 187
National Geographic, 167
National Public Radio, 7-10, 75
Nazism, 24
Negotiation Genius (Bazerman and Malhotra), 79
Negotiations, xvi-xvii, 53-54, 78-82, 119, 147, 148
clarity in, 81-82
misdirection, 78-82
Nelson, Leif, 57
Netherlands, 49
New England Patriots, 24
New Jersey, 171
New Orleans Times-Picayune, 167
Newsweek, 98
New York Federal Reserve Board, 44
New York Jets, 24
New York Times, 28, 29, 65, 137, 138, 156, 157, 160, 163, 164
New York University, xviii
Nicholson, Jack, 14
Nonprofit organizations, 36, 38, 41
Komen episode, 136-39
Noonan, Frank, 20
No One Would Listen (Markopolos), 126
Northwestern University Kellogg Graduate School of Management, xx, 145
Noticing, xiii-xxi
avoiding predictable surprises, 166-80
creating first-class noticers, 189-91
developing the capacity for, 181-91
indirect actions, 151-65
leaders’ failure to notice, 31-46
mind-set, 182-83
missing information and, 101-16
motivated blindness, 16-30
outsiders and, 187-88
personal journey and, xiii-xxi
slippery slope and, 86-100
thinking ahead, 133-50
“too good to be true” measure and, 117-32
what doesn’t make sense, 184-85
Nudge (Thaler and Sunstein), xix, 185, 190
Oakland Athletics, 184
Oil industry, 133
2010 BP explosion, 133-35
Oliver Twist (Dickens), 77
Omission, errors of, 106-9
Opt-in/opt-out distinction, 108-9
Oregon, 186
Organ donation, 107-9
O-ring failures, 5-7
Orphan drugs, 156-59
Outsider/insider distinction, 187-88
Outside the box, 6-11
Ovation Pharmaceuticals, 157-58
Oversight, 36-46
accounting, 50-55
board, 36-42
failure of, 34
regulatory, 42-45, 64-65, 127, 130, 151
Paharia, Neeru, 158
Pash, Adam, 72
Paulson, John, 180
Pearlstein, Mark W., 96
Penn State University, xxi, 16-21
Sandusky scandal, 16-21, 23, 30
Pharmaceutical companies, unethical practices of, 156-59
Planned Parenthood, and Komen episode, 136-39
misdirection, 75-78
PowerPoint presentation, 84
Predictable surprises, 166-80, 181, 182
cognitive causes of avoiding, 173-74
environmental disasters, 166-71, 174, 175, 178
failure to notice, 171-76
leadership to avoid, 166-80
mobilizing action, 177-78
organizational causes for avoiding, 173-74
political causes for avoiding, 175-76
prevention of, 176-78
recognizing the threat, 176-77
2008 financial crisis, 178-80
Predictable Surprises (Bazerman and Watkins), xiv, 166, 171, 172
Prelec, Drazen, 58
PricewaterhouseCoopers (PWC), 40
Princeton University, 24, 110, 111, 163
Public Company Accounting Oversight Board (PCAOB), 50-51
P-value, 56
Quayle, Dan, 69
Questcor, 157
Questions, dodging, 75-78, 79-80
R.J. Reynolds Tobacco Company, 27
Radford, Alexandria Walton, 163
Raffaelli, John, 137
Raju, B. Ramalinga, 39-40
Randal, Jason, 69
Rape, 30
Catholic Church scandal, 21-23, 30
Sandusky scandal, 16-21, 23, 30
Ratzinger, Cardinal Joseph, 22
Raykovitz, Jack, 18-19
subprime mortgage crisis, 64-65, 126-31, 178-80
Regulatory oversight, 42-45, 64-65, 127, 130, 151
Research, 56
drug, 157-59
reform, 63-64
social science, 56-61, 63-64, 183
Rewards, for results, 159-62
Ritov, Ilana, 107
Rodriguez, Alex, 34
Royal Bank of Canada, 43
Royal Bank of Scotland (RBS), 43
Rubinstein, Ariel, 148
Safety, 151-56
factory, 154-56
product, 151-56
Sagal, Peter, 75
Sandusky, Jerry, 16-21, 23, 30
Sarbanes-Oxley Act (2002), 50
Satyam, 39-41
Schmidt, Peter, 110
Schrand, Catherine, 91-93
Schweitzer, Maurice, 79
Scion Capital, 178
Sears, Roebuck and Company, 162
Securities and Exchange Commission (SEC), 33, 51, 66, 87, 91, 92, 123, 124-26
Selig, Bud, 35
Sellers, 131-32
computerized, 149
“hidden card game” and, 148-50
Senate Banking Committee, 33
Senate Permanent Subcommittee on Investigations, 36, 74
September 11 terrorist attacks, xiii-xiv, 172, 175-77
“Silver Blaze” (Doyle), 101-6
Simon, Herbert, xix
Simonsohn, Uri, 57
Skilling, Jeffrey, 55
Slippery slope, 86-100, 124, 181
earnings management, 87-91
escalation of commitment on a, 95-99
not noticing on a, 88-95
overconfidence and, 87-88, 91-95
Social science research, 56-61, 63-64, 183
Société Générale, 33-34, 97, 98
Sosa, Sammy, 34
Spanier, Graham B., 18-19
Stanford University, 134
Stapel, Diederik A., 49-50, 55, 58
Stasser, Garold, 83
Statins, 11
Statue of Liberty, 68
Stearns, Cliff, 137
Subprime mortgage crisis, 64-65, 126-31, 178-80
Sunbeam, 87
Supreme Court, U.S., 51
United States v. Arthur Young & Company, 51
Swoopo auctions, 117-22
System 1 thinking, xviii-xix, 146
System 2 thinking, xviii-xix, 99, 105, 146
Tan Chi Min, 43-44
Tanlu, Lloyd, 54
Target, 155
Teams, 82-84
misdirection in, 82-84
game shows, 112-16
Temperature hypothesis, in car racing, 3-4
Terrorism, xiii-xiv, 172, 174, 175-77
Thaler, Richard, 120, 185, 190
Theckston, James, 128
Thinking, Fast and Slow (Kahneman), xviii, xx
Thinking ahead, 133-50
“Acquiring a Company” problem, 141-46
BP explosion (2010), 133-35
cynicism and, 146-50
Komen episode, 136-39
lemon problem for buyers, 139-50
noticing by, 133-50
Thiokol, Morton, 5-7
Thomas, Robert, 181
Tilburg University, 49
Titus, William, 83
DOJ prosecution of, 25-30
“Too good to be true” measure, 117-32
auctions, 117-22
investment advisers, 122-26
subprime mortgage crisis and, 126-31
Trout, J. D., 77
Tversky, Amos, xix
Two-pay auction, 119, 120, 121
Unethical behavior, 24, 29-30, 117-32
in academia, 47-50, 56-61, 63-64, 109-12
in auditing, 36-41, 50-55, 61-63, 87-92
in banking, 31-33, 36-45, 74, 97-98, 122-31, 178-80
conflicts of interest, 47-66
drug prices and, 156-59
earnings management, 25, 36-38, 50-53, 55, 86-92
escalating commitment to, 95-99
indirect actions and, 151-65
investment advisers, 122-26
leaders’ failure to notice and, 31-46
motivated blindness and, 16-30
penny auctions, 117-22
product safety and, 151-56, 162
slippery slope of, 86-100
steroid use in baseball, 34-36
subprime mortgage crisis, 64-65, 126-31, 178-80
“too good to be true” measure and, 117-32
U.S. Conference of Catholic Bishops, 22
University of California, Berkeley, 121, 139
University of Pennsylvania, 107
University of Virginia, 110
Vatican, 22
Wait, Wait, Don’t Tell Me (radio show), 75-76
“Walking the customer” policy, 162
product safety, 151-56
Watkins, Michael, xiv, 166, 171, 172
Watkins, Sherron S., 37
Waxman, Henry, 65
“Wear the other guy’s shoes” measure, 130
Westmacott, Sir Peter, 75-76
What you see is all there is (WYSIATI), xx
What you see is not all there is (WYSINATI), xx
Why not, asking, 185-87
Why Not? (Nalebuff and Ayres), 187
Witness tampering, 27-28
Wizard of Lies, The (Henriques), 125
Wolf, Naomi, 44
“Woman with the umbrella” video, xv-xvi, 12, 13, 67-68
Wong, Mark, 43-44
World Bank, 39
World War II, 24
Zechman, Sarah, 91-93