As evidence continues to mount that Supreme Court Justice Clarence Thomas received financial benefits from conservative billionaire Harlan Crow that he failed to disclose, including luxury trips and real estate transactions, the relevant question for Americans is what influence those gifts are likely to have on Thomas’s rulings as he sits on the nation’s highest court.
Unlike other federal judges and government officials, the Supreme Court enforces its own ethical standards, leaving it up to the justices to determine whether they should recuse themselves from cases in which they have personal or financial relationships with any of the parties.
But this presents a problem. Research in psychology and economics, as I describe in my book Mixed Signals, suggests that people are poorly suited to determine whether they are biased. Even if Thomas genuinely believes that Harlan Crow’s largess would have no effect on his judicial opinions, he is likely wrong. Humans are incredibly good at self-deception.
Even if Thomas genuinely believes that Harlan Crow’s largess would have no effect on his judicial opinions, he is likely wrong. Humans are incredibly good at self-deception.
Thomas isn’t the first public figure to face questions about how incentives affect their decision-making, and he won’t be the last. His situation illustrates biases that occur much more broadly, beyond those in the judiciary—doctors, financial advisors, and many others who frequently have incentives that can influence their decisions in a way that is to their own benefit rather than the people they are supposed to serve.
Let’s take physicians as an example. Can you be sure your physician puts your health at the top of their priority list? It partly depends on their incentives. One incentive, we hope, is to provide you with the best possible care. Yet in many hospitals, physicians are also handsomely compensated for each procedure they perform, while the hospitals in turn get higher insurance reimbursements for these procedures.
Physicians may believe that receiving fees for each procedure they perform or gifts from pharmaceutical companies do not affect the way they treat their patients. They may justify such fees by maintaining that they remain unbiased professionals who always prioritize their patients’ well-being.
Judges, doctors, financial advisors, and many others face incentives that can influence their decisions in a way that is to their own benefit rather than the people they are supposed to serve.
However, the evidence suggests that the incentives are not ignored by physicians: comparing hospitals with and without extra compensation reveals that when incentives are present, physicians are significantly more likely to recommend procedures such as back surgery and C-sections. Such overtreatment also costs billions of dollars in wasteful annual spending.
Despite what physicians and Justice Thomas may think, we’ve found through our research that people are poorly suited to determine whether they are biased, because we’re incredibly good at deceiving ourselves to think the incentives have no influence, when in fact they do.
In one experiment we asked participants to play the role of financial advisors who needed to recommend one of two investments to a client and received a commission that depended on their recommendation.
For one group of participants, we told the advisors about their incentives first, and only then about the investment options. They were significantly more likely to recommend the one for which they were incentivized compared to a control group who didn’t receive any incentives.
For a second group of participants we changed the order of things. We first asked them to think for themselves which investment is better, and only then did we tell them about their incentives. That way, they would have to change their minds in order to benefit from the incentives, making it much more difficult for them to deceive themselves into believing they are making an ethical choice. They could still make the recommendation that benefits them, but now with the understanding that they are biased. In this case the incentives had no impact on choice—people made the ethical decision. The results are presented in the figure below.
That’s part of the power of incentives—they can change our ethical standards.
This simple experiment demonstrates the power of incentives to influence our ethical perception. When we are aware of our biases, we are less likely to be swayed by financial incentives. However, when we are not aware of our biases or believe we are being objective, incentives can have a significant impact on our choices.
Back to the case of physicians—when asked, they often report that incentives didn’t impact their decisions. They might believe this. Think about a physician who faces a patient with back pain. In some cases, it is clear the patient just needs to rest, and everything will be okay. In another type of cases, it is clear that only a surgery will solve the problem. These cases are easy, and probably won’t depend on the incentives the physician is facing.
People are poorly suited to determine whether they are biased, because we’re incredibly good at deceiving ourselves to think the incentives have no influence, when in fact they do.
But then there’s the gray area—cases in which it isn’t clear if the patient needs surgery or not. In these cases, the incentives could “solve” the physician problem without them even realizing it. As the above evidence show, physicians are more likely to recommend a surgery when the incentives are there. And they can still sleep well enough because they’re sure they’re just doing it for the patient.
Even if our actions are legal, and even if we believe that we are not biased, we are. Self-deception is a powerful human behavior that allows us to enjoy both worlds—gain the financial benefits without feeling unethical. Justice Thomas’s relationship with Crow may not have been illegal, and Thomas may believe Crow’s generosity hasn’t and won’t influence his decisions, but the research suggests this might simply be a case of self-deception. It’s an extraordinary story for American politics and the Supreme Court, but a familiar one for human psychology.