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Spring 2002 CalBusiness  
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Two New Faculty Apply Psychology to Business

Professors Barbara Mellers and Philip Tetlock joined Haas this spring, bringing their shared experience in applying psychology to business issues to the school. While this married couple work in similar fields, they've each developed their own unique perspective to the world of business.

Forecasting fascinates Haas School Prof. Philip Tetlock. How people make predictions and why they stand by them, even when reality proves them wrong, is his current area of focus. He has spent years examining the work of forecasters, measuring both their confidence in their forecasts and how they self-correct those forecasts when they are wrong.

Tetlock, who recently joined the Organizational Behavior and Industrial Relations group at Haas, returned to UC Berkeley after six years at Ohio State University. He brings with him a wealth of knowledge from other university areas of study that he has called home. He was a professor of psychology and political science, before moving over to the business school.

"I always focused on the applied end of psychology, the macro issues that link individuals to larger organizational structures," says Tetlock. "My work has a good deal of relevance to people who make business decisions."

Tetlock is currently working on a book on political, economic, and social forecasting using 15 years of data that he has been eliciting from experts in both political and financial arenas. Over that time, he has been tracking "who gets what right" and how confident the experts are in their forecasts at the time they are made.

"Experts have a tendency towards over confidence," says Tetlock. "There is a very tricky balancing act here: many organizations want can-do enthusiasm but they need to recognize that an unfortunate by-product of that enthusiasm can be rigidity and tunnel vision."

He also examines what happens when experts are wrong and how willing they are to change their minds. "People come up with lots of justifications for holding on to their beliefs when the unexpected occurs. But they are quick to claim credit for their predictive successes."

One focus of his current work is on developing methods of identifying people who are skillful at updating their own beliefs. He also develops training exercises that assist people in becoming more constructively self-critical of their own thought processes. "Self-correction is a skill that can be cultivated."

Next year, Tetlock will teach the undergraduate organizational behavior class and a Ph.D. seminar. In the long term, he plans to develop an MBA elective on common errors and biases in human reasoning and on competing models of how to set up organizations to correct those errors.

Prior to joining Haas, Tetlock was the Harold E. Burtt Professor of Psychology & Political Science at Ohio State University. Tetlock holds a Ph.D. in psychology from Yale University, an MA in psychology from the University of British Columbia, and a BA from the University of British Columbia.

In Haas Prof. Barbara Mellers' work on decision-making, she endeavors to go beyond people's stated reasons, to find out what factors influence why and how people make choices. She brings over 20 years of experience in the study of individual decision-making, judgment, and choice to her research at Haas. "I am interested in how people make judgments and decisions - their strengths, their weaknesses, and how they can do better," says Mellers.

Mellers' focus on psychological models of decision-making, the effects of emotions on judgment and choice, and perceptions of fairness has led to work that can be applied to different areas of business. Because of this, at Haas she joined both the Marketing group and the Organizational Behavior and Industrial Relations group.

Mellers' work in marketing focuses on understanding and predicting consumer choice. "Consumers make many of their choices based on anticipated emotions about future experiences," says Mellers. To examine consumer choice she has found that modeling the process helps make it understandable. "I have tried to develop mathematical representations of simple processes that can be tested in both natural and experimental studies."

The very act of observation and modeling can also become a factor in these studies. Mellers' research has investigated "nuisance" factors in conducting her studies. These include: "context effects" - how the surroundings affect the subject's response and "response model effects" - how the questions being asked in the study can affect the responses to the questions.

In organizational culture she finds emotions play a leading role as well. "In organizations, the success or failure of a business depends on the ability of leaders to communicate emotional goals, create emotional climates, and manage emotional conflicts," says Mellers. She is developing psychological models of fairness and people's perceptions of fairness.

Mellers' return to the faculty of UC Berkeley comes after a six-year stint at Ohio State University. She was previously in the UC Berkeley psychology department for 14 years. Mellers holds a Ph.D. and a MA in psychology from the University of Illinois, Champaign-Urbana, and a BA in psychology from UC Berkeley.

Mellers is a consulting editor for the Journal of Experimental Psychology: Learning, Memory, and Cognition; Psychological Review; Psychological Bulletin; and the Journal of Behavioral Decision Making. She is also on the publications board for the Judgment and Decision Making Society.

At Haas Mellers is teaching a freshman seminar on judgment and decision making and an undergraduate introduction to marketing course.

Professors Philip Tetlock and Barbara Mellers
New Haas School faculty members Professors Philip Tetlock and Barbara Mellers apply their expertise in psychology to business problems.
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