Business Schools, Models and the Crisis
This Financial Times article is particularly interesting because it highlights the role of business schools in transmitting the credibility of faulty models that contributed so much to the crash: a point that should be made more often.
Bystanders to this financial crime were many
By Nassim Nicholas Taleb and Pablo Triana
Published: December 7 2008 19:18 | Last updated: December 7 2008 19:18
On March 13 1964, Catherine Genovese was murdered in the Queens borough of New York City. She was about to enter her apartment building at about 3am when she was stabbed and later raped by Winston Moseley. Moseley stole $50 from Genovese’s wallet and left her to die in the hallway.
Shocking as these details surely are, the lasting impact of the story may lie elsewhere. For plenty of people reportedly witnessed the attack, yet no one did much about it. Not one of the almost 40 neighbours who were said to have been aware of the incident left their apartments to go to Genovese’s rescue.
Not surprisingly, the Genovese case earned the interest of social psychologists, who developed the theory of the “bystander effect”. This claimed to show how the apathy of the masses can prevent the salvation of a victim. Psychologists concluded that, for a variety of reasons, the larger the number of observing bystanders, the lower the chances that the crime may be averted.