Dan Ariely - The Honest Truth About Dishonesty - TAM 2013

dan Ariely is our next speaker he's talking the honest truth about dishonesty how we lie to everyone especially ourselves he's the James B Duke professor of psychology and behavioral economics at Duke University he's got to New York Times bestsellers predictably irrational and the honest truth about dishonesty and his haiku is this I have never lied except for what I just said no wait that's not true please welcome Dan Ariely so I want to talk a little bit about dishonesty and how many people here have lied at least once this year okay how about the last week I'm not going to ask about the last day in the last hour but there's a very disturbing study in which they take two people who don't know each other they put them in the room and say talk to each other for 10 minutes introduce yourself to the other person and then they put them into separate rooms and say did you lie to the other person and almost everybody says no and they said well luckily we taped your discussion let's play back to you sentence by sentence and let's get your reaction to each sentence and on average people admit to lie between 2 and 3 times in those 10 minutes so if you think about the truth is that we lie a lot we lie frequently lots of it is for to be polite or for social grace and so on by the way they say there's a story in the Bible God comes to Sarah and say Sarah you're going to have a son and Sarah laughs she said how can I have a son when my husband is so old God said don't worry then he goes to Abraham and say Abraham you're going to have a son and Abraham says did you tell Sarah and God said yes and Abraham said in what did Sarah said and God lies God said Sarah said how could you have a son when she's so old and the religious scholars have wondered how could God lie and they came up with a conclusion it's okay to life a peace at home and and the realization of course is that our many human values out there honesty is one of them but not all human values are compatible all the time and what do we do with sometimes human values don't fit something has to give an honesty often gives and we understand that right we understand that the right answer to the question honey how do I look in that dress is not always the perfect truth so on one hand we realize we care lots of flies and we do it for all kinds of social and other reasons on the other hand how many people in here in general think of yourself as wonderful honest people right the same the same group and the question is how can that be how can it be that on one hand with line we recognized it on the other hand we feel good about ourselves what are the mechanisms for lying so to look at this honesty in general we have to come up with some method that we could quantify this honesty and we kind of developed a very simple approach and if you're in the experiment in one of the many experiments we ran one of the methods look like the following I will give you a sheet of paper with 20 simple math problems these are math problem that everybody could solve if you had enough time but they wouldn't give you enough time I would pass the sheets along I would say wait I said turn it over solve as many as those as you can in five minutes I will give you a dollar for question you have five minutes go you would start working as fast as you can at the end of the five minutes I would say please stop put your pencil down and count how many questions you got correctly now take your sheet of paper go to the back of the room and shred it come to the front tell me how many questions you got correctly and I'll pay you accordingly people do this they shred they come forward they said they solve six problems on average I paid them six dollars they go home what the people in the experiment don't know is that we played with a shredder talking about dishonesty the shredder shred the sides of the page but the main body of the page remains intact so when you put your in you feel the vibration that noise everything feels the right way but we can actually see how many questions people really solve correctly and what do you think we find on average people solve for problems and reports to be solving six and this is this shift in the average is not due to a few people cheat a lot it's due to a lot of little cheaters hey I'll tell you about lots of experiments today and I add as many I would not tell you about in total we've run these experiments on about 35,000 people and from those 35,000 people we found about 20 who were big cheaters and together they stole about $250 from us we also found 25,000 little cheaters who stole about 50,000 dollars worth and I want you to think about that sure there are big cheaters out there but they're very few of them but on the other hand there's lots of little cheaters who could cheat just a little bit all the time and that actually has a tremendous economic impact okay so now we have a method for quantifying dishonesty now let's think about what is the theory of this honesty the standard theory of dishonesty is the cost-benefit analysis it says every time you're considering an act you set yourself what do I stand to gain what do I stand to lose and if you think about stealing something you say what's the problem he'll be caught how much time will I get in prison is it worth it and you do the cost-benefit analysis now if that's the case all we need to do is to do harsh punishments and people who do the cost-benefit analysis and we say not worth it but is that the case so first of all let's think about something like the death penalty the death penalty is a very harsh penalty it's hard to think about something worse and you would think to yourself that if people do the cost-benefit analysis states that have the death penalty would not have crime at least not the crime that you can get the death penalty for but any statistical analysis that we can do doesn't show any difference in crime rate between states that have the death penalty and states that don't suggest any people don't really do the cost-benefit analysis you can also ask yourself subjectively when was the last time you thought about it the world's this way you must have gone to some friends for dinner and maybe you went to the bathroom to wash your hands and they have these really new nice towels and you know you don't have nice towels and you had your backpack with you and you could have taken them and gone home did you ever think about things like like this right I suspect that most of you have it right it hasn't crossed your mind maybe now tonight maybe we'll use a lot of cutlery at dinner or something but in general we don't think about things like this so it doesn't seem to describe the macro data it doesn't seem to describe the subjective experience what about our experiments our experiments showed the same thing we play with how much money people stand to gain we don't see a difference we stand with how much what's the probability of being caught we don't seem indifferent so the economic rationale model while scenes appealing that people do the cost-benefit analysis doesn't have much evidence in our data or in any other data so what does happen because you could say oh people are angels but people are not angel either right we do see lots of dishonesty so we thought maybe what's going on is that people try to maximize two things at the same time on one hand we want to look at yourself in the mirror and we want to feel that we're good honest wonderful people like an ego utility think of ourselves in a good way on the other hand we want to benefit from selfishly from cheating a little bit and you can say you can't do both you either look at yourself as an honest person or you benefit from being slightly dishonest you can't do both well maybe you can maybe as long as we cheat just a little bit we can still think of ourselves as good people right maybe there's a barrier that says that if you cheat a lot you have to think of yourself as a thief but if you cheat just a little bit all of a sudden you can think of yourself in stealing good eyes so for example how many of you have illegally download material in your computers okay not everybody actually I guess some people just don't know how to do it and from the people who have this this information how many of you would feel bad if other people knew almost all right how can it be now think about something else how many of you food feel comfortable going and having a meal in the restaurant and living without paying you would feel comfortable good to know and most of you say you would not feel comfortable I'm guessing you just yeah so actually in the last two years every time I go to eat somewhere I ask the waiters if they can recommend a way to eat and escape without paying and I usually say look I'm not going to do it I'm just interested like how would you do it if you were going to do it sometimes they ask me for my credit card but usually they give me really good advice they say wait for a big group to come in there's an alley to the bathroom they have suggestions of how to do it and then I said what how often does it happen and they say almost never says they say sometimes people forget to pay they just they because they don't pay attention to credit card they start walking without paying but they say it almost never happens now think about these two cases illegal downloads eating without paying the probability of being caught is very low in both of them illegal downloads if the music industry catches you you can't say oh I didn't think about it I'm sorry I didn't pay attention which you can do in a restaurant nevertheless it's how we feel about it it's not about the consequences in the real world so let's go back to our little experiment and say how would we now modulate the amount of cheating that happens in our experiment how do we get people to cheat more and how do we get people to cheat less and remember it's not about the cost-benefit analysis what else would get people to change the tolerance around cheating and if you think about it it's all about thinking of ourselves as good people and trying to benefit from this honesty it's all about rationalization it's all about saying how can we justify this little bit of cheating and if we can justify a little bit more we'll treat more if you can justify a little bit less you would feel less so let's think about rationalization what kind of things do you think change rationalization what kind of things are good input that allow people to rationalize more just raise your hand and give me some suggestions and a limiting so anonymity is usually that the multiple interpretations but one of them I can't be caught another one is you don't think of yourself as part of it you think of yourself as part of a crowd very good good everybody else does let me tell you one experiment about everybody else does then we'll continue all our good let me just uh let me just tell you about experiment at the time and then we'll continue with suggestion so one of the suggestions was everybody else is doing it so imagine it's the same experiment I've have to sit around but there are two changes the first change is that I give you an envelope with all the money for the experiment in advance as if you solve all the problems and they ask you to end to pay me back the money you did not make change number two is I hire an acting student that acting student sit in the front row and 30 seconds into the experiment they raise their hand and they say excuse me I solved everything what do I do now imagine you in the experiment somebody raised their hand they saw they solved everything you know that they're cheating there's no question you're still in problem number one and the experimenter said you solved everything you're free to go and you see that person taking the envelope and walking leaving nothing behind what would happen to your own morality lots more people change but there could be a couple of interpretations one interpretation is that you're saying well in this experiment there's no downside to Chile look somebody cheated in an exaggerated way all the way nobody changed him nobody said anything it's it's there's no consequences the other possibility is to say in our society people like asking to behave like this and this seems to be okay socially so how do we separate those two explanation we tried multiple things one of them was that we change the outfit of the acting student and here's the story we read he's experimented carnegie-mellon everybody was a Carnegie Mellon student the acting student was a Carnegie Mellon student he was wearing a carnegie mellon outfit in the second version of the experiment he was wearing University of Pittsburgh's to achieve now what happens when you're a university of Carnegie Mellon student and News University of Pittsburgh student cheats from the cost-benefit analysis you still know that in this experiment people can cheat and get away with it but from the perspective of feeling okay that people like me are doing it that doesn't work now you see all these other people there are the chairs and we don't want to be like them and cheating actually goes down okay so it is about everybody else is doing it but people like me rather than everybody in general people that we identify with and you said they deserve it they are charging too much we can go into all kinds of personalization you might have about this and so so they're doing something bad to me so we did another version of this experiment this was in Boston we came to people in coffee shops and we say hey would you do this study for five minutes for five dollars people said yes we get in the sheet and we explain to them the task it was slightly different than the task I described to you and then we said we'll be back in five minutes left came back in five minutes he said here are your five dollars please count it and sign a receipt for five dollars and leave the receipt on the table but we actually gave them nine dollars how many Bostonians do you think gave us the money back slightly more than fifty percent and you could decide if it's a lot or little in the second condition as the recent assistant explained to them the task here is what you do he pretends somebody called him on his cell phone he picked up his phone and he talked for 12 seconds to John about pizza tonight hey John what's up there are pizza tonight great put the phone back went straight to explaining this instructions said nothing left nine dollars here's your five what happens now not only 14% of the people gave the money back right people said oh he did something bad to me that's okay now I'm restoring karma to the world by by doing that very good to other people doing it what else would change rationalization just raise your hand yeah that's right so you're not stealing anything so when we talk about illegal downloads there's lots of ways to rationalize it right you could say I'm not there's no marginal cost you could say the musicians really want the music to be heard I wouldn't buy it otherwise I'm actually doing something good there's lots of stories you can tell yourself what else personal relationship do you mean if you know the person face to face you might not want to to harm them when you don't know them face to face you would feel differently about it absolutely that's right so there's something called the identifiable victim effect which is if the effect is larger and it happened hurts people in general you don't feel the effect if it's something specific you feel it I'll give you one oh yeah larga Janette you know we try that we couldn't find evidence for that but I felt the same intuition we just didn't find evidence for this so here's another version of this and there's a little joke that little Johnny comes home from school with a note from the teacher that said that little Johnny stole a pencil from the kid who sitting next to him and Johnny's father is furious that Johnny I can't believe you did it and you never never never steal a pencil from the kid who sitting next to you you're grounded for two weeks and just wait until your mother comes and besides Johnny you know very well that if you need a pencil all you need to do is to say something you can mention it you can ask for a pencil and I can bring you dozens of pencils from the office now why is this slightly amusing because I think we all recognize that the pencil feels very differently from taking 50 Cent's for petty cash box if you took 50 Cent's from petty cash box you would feel like you're a thief pencil not so much right everybody is doing it it's there for people to take in fact even if you took 50 Cent's and went to buy a pencil you would feel yourself this you're a thief so this idea here is that the distance between what we do and the consequence the the people and so on is a major aspect of whether we feel comfortable or not so we've done this in a couple of ways the first one is we looked at golf anybody who plays golf okay few people so we get this fad around about 12,000 golf players we ask them any questions but one question was imagine the ball fell on the rough not a good place and you really really really wanted it to be four inches to the left there have been much better would you pick it up and move it by 4 inches and people said heaven forbid I can't imagine doing that if you're asking this question it means you don't understand golf nobody I know about nobody does it impossible not part of the game okay what about kicking the ball a little bit yeah we do that all the time what about hitting it with a club that's easy too by the way the easiest one is if you're not looking so look up and then you kick it a little bit that's the that's the easiest going back to the standard experiment we did the same experiment I described to you earlier we passed the sheets of paper people shredded them came to it and said mr. experimenter I solved X problems give me X dollars in another version they looked at the experimenter and said mr. experiment I solved X problems give me X tokens and we pay them in pieces of plastic they walk 12 feet to the side then changing for money so the difference was when you look into somebody in the eyes and you lied you lie for something that was not money but it was going to become money very quickly what happened in that this experiment people double their cheating and by the way this for me is one of the most worrisome experiments that we've created because if you think about it as a society we're becoming distance distance from a direct relationship a distance from money cash credit cards electronic wallets cash stock stock options derivatives dealing with people directly dealing with people over great distances if it if it's possible that as these distances increases people feel better about misbehaving then we really need to worry more and more about lots of people cheating a little bit and still feeling good about themselves and if you think about everything we've said so far it's really about conflicts of interest it's really about the fact that if we want to see reality in a certain way and we have the conditions to rationalize it we can do it so imagine for example that we create something like the financial industry and Wall Street and imagine that you're an investor on Wall Street in 2005 and I promise you a five million dollar bonus if you could only see mortgage-backed securities as a good product now ask yourself whether you couldn't see them as better Pro than they really are I'm not saying would you lie would you say oh I know that they are terrible but I'll pass them to my clients now wouldn't you actually shift your belief to believe that they are better than they are and what if you have some belief in the market the market is always right and what if you said everybody else is doing and whatever if there were multiple steps removed from money and multiple steps remove from the people that you dealing with now you can see how you can create a system that has inherent conflicts of interest and lots of opportunities for rationalization and no matter who you put in there you're going to get a bad outcome you know we can say oh this banker is bad and these bankers but the problem is that this system is supporting lots of Mis behavior I'll tell you one other story about conflicts of interest so as you can probably tell I was badly burned many years ago I spent a long time in hospital and about five years after I left the hospital I came back for a checkup and the head of the department finds me he said Dan I'm so happy you came I have a fantastic new treatment for you great I come to his office and he says that when I shave I have stubble I just shaved sewed not as much I have stubble on my left side my right side is burned so there's no stubble there's no hair so what is he proposing he's going to tattoo the right side of my face so that it equals the left side of my face and he says go home shaves tomorrow and come back and I Drive home and I think to myself what kind of shave do I want to be symmetrical the morning shave the afternoon shadow again this is the important decision so I come to his office and I say you know what I'm not sure I want this can you show me some pictures of people you've done it he said yes we've done it for two other people he can't show me the whole face but he shows me their cheeks and sure enough it looks like you know little black dots and then I said what happens when I grow older and my hair becomes white he said don't worry we can laser it out when the time when the time comes and then say you know what I'm not sure I was not sure it's for me then he looks at me I said then what's wrong with you he said that you enjoy looking non-symmetrical do you get some deprived pleasure from looking different he said the women feel sorry for you and know instead of some other things which never happened and and I left I left his office and I was really baffled and I went to this deputy and I said what's going on and he said well you know we've done this for two patients already and within the third for an academic paper now here's the thing this guy was an amazing physician he passed away ten years ago but it was an amazing physician you see the right side of my right eyebrow it was burned there was no eyebrow and he wanted to operate on it he wanted to create a new eyebrow I couldn't care less but I told him there was another operation I was going into if you want to do it at the time of the other operation that's fine I'm not doing a special operation right about 30 operations another one for half an eyebrow didn't look like a good deal and so I went into an operation from my hand it took about eight hours but turns out they couldn't he couldn't do it didn't have enough space around me so he waited the whole day for them to finish and then worked on me most of the night you took him about eight hours it's a very he took a Doppler machine he tracked the blood vessels it created really amazing operation I the point is that I can't think of this physician as anything but the kind wonderful person but at that moment yet the conflicts of interest and at that moment he wanted to see this paper out and less scared about my individual benefits okay so all of this is about conflicts of interest and how we could get people to rationalize more how can we get people to rationalize less what do you think would get people to cheat less so of course we can do the opposite of what we've done so far but what else could happen what else could work any 10 commandments very good so there's a little joke there's a little joke a guy goes to the rabbi and said rabbi you wouldn't believe what happened but somebody stole my bicycle from synagogue and the rabbi is appalled stealing your bicycle from synagogue that this is terrible so I'll tell you what you do come to synagogue next week and sit in the front row and as we go over the 10 commandments turn around and look at everybody in the arms and when we get to doubt shall not steal you know who's your thief the guys very excited the Robbie's excited comes to synagogues in the front row turns around during the ten commandments at the end of the service the rabbi waits for him it says so did it work and the guy said like magic like a charm he said the moment the moment we got to down not commit adultery I remember do I left my bike that's what's needed to get applause good to know so where's the experiment in this as well suggested we went to UCLA and we asked 500 undergrads to try and recall the Ten Commandments by the way none of them could recall all 10 commandments and many of them invented new interesting one and this might be California effect we don't know but then after we asked him to try and recall the Ten Commandments nobody cheated and it had nothing to do with whether they were remembered more Commandments or less Commandments in fact even when we we asked self-declared atheists to swirl the Bible and then we give them a chance to cheat they cheat less they don't cheat at all so it's not about the cost-benefit of heaven and hell it's about reminding people about their own moral fiber and within an experiment like this with the big insurance company we got some people to fill their odometer reading and then sign at the bottom and some people sign first and then fill the dom authority and the people who signed first cheated by much less we don't know if they didn't cheat at all because we didn't check your odometer but compared to the other group we know they cheat by 15 percent less so this suggests that just priming people with the wrong morality can do something good for this honesty there are two more points I I want to make the first one is about what happens to dishonesty over time so in these experiments that I've described to you so far it was a one-shot cheating people have one time but sometimes we give people hundreds of opportunities to cheat over time and one of the things we see is that people cheat a little bit cheating a little bit feeling good cheating and then at some point they switch and start cheating 100% of the time and different people switch at different points but this switching pattern is very common and we call this the what the hell effect and if you're a dieter you know this thing right you know that you're kind of in a diet and then you start with the muffin they say I'm not gonna diet anymore I'll start tomorrow next Monday and the issue is that we really think of ourselves in binary terms right a dieters are not either honest or not if you're 72% honest does it work is it worthwhile to move to 78 now you might as well enjoy so we said okay if people have this what the hell effect pattern how could we cure people what what how could you get over it in religious terms if people think that they're going to hell why would they ever why would they ever behave well so we thought about Catholicism anybody here grew up Catholic okay if you so this is no offense of the Catholics or their ex Catholics in the audience and but we want to talk to real Catholics we went to Italy we went to talk to Catholic priests and we asked them please explain to us the logic of confession after all if you can confess and get to absolve when people cheat more if all you want is to minimize time in purgatory wouldn't you cheat all the way to confession that's good but but turns out that's not the case so we came up with a few theories for how confession might work one is the cost-benefit you think to your future and you say I might get caught but for sure I'll have to talk to the priest and that will be terrible not worth it we find no evidence for them the second possibility is you come out of confession and you feel good and pure and wonderful and you don't want to destroy that feeling for a few days or a few hours we have some evidence for that but what about the what the hell effect so we tried that as well in the lab people cheat a lot switch to cheating a lot a little bit cheated a little bit switch to cheating a lot we gave them a chance for a non Catholic confession right some things you've done wrong right something that you ask forgiveness shred those pieces of paper what happens after both of those cheating goes down dramatically so this is a case in which religion has actually figured some interesting mechanism about opening new pages and I think it's interesting to ask how could we integrate the general wisdom opening new pages into secular society what would it look like if we try to get our politicians and bankers into a ceremony of that should we integrate things when people reclaim their vows and do other things to basically open new pages and finally I won't say something about cultural difference differences how many people who grew up in a country that is not the us raise your hand okay keep them up now how many of you think that in your country of origin people cheat less than Americans less than Americans keep your hands up Canadian yeah yeah okay so so I grew up in Israel so the first country I went to test was was Israel we test me the same procedure how many of you think that in Israel people people treat more than the Americans this is a much more politically correct group than I expected anyway the Israel it you just like the Americans Francesca Gino my Italian collaborators had come to Italy will show you what the Italians can do but they can see just like the Americans we tried China we tried Turkey Germany Colombia South America and so far we find no differences how can it be anybody who traveled in other places gets the feeling the cheating is very different in different places how can it be and here is what we're finding we find that our experiments are not capturing anything cultural because they're not embedded in culture the abstract they are general it's the first time people experience them and because of that they measure the general ability of people to cheat a little bit and feel good about themselves but that doesn't mean that culture doesn't work culture work on the domain by domain specific culture doesn't change a human fabric or backbone what counter does is to take a domain illegal download and say don't worry about it culture can take something like paying a bribe to policeman and say don't worry about it culture can take something like cheating in school and say don't worry about it so culture is important but cut it doesn't change people across the domain they just change them across the whole domain they change domain by domain we did find one difference when we run these experiments we are the random at university or in bars and when we run them in bars we change the payment such that every four questions people solve correctly they get their money equivalent to one glass of beer in this establishment so beer becomes our international currency so we ran this experiment in in the Bauer congressional staffers hang out in and we read it also in a bar where bankers in New York Wall Street hang out in and this was the only time we found the difference who do you think cheated more the bankers or the politicians who votes for politicians who votes for bankers huh okay so slightly more for the party in the bandage period two to one twice as much but there are two things we should consider one is that this was cheating in money which is domain of bankers much more than the politicians and the second thing these were junior politicians congressional staffers lots of room for growth let me just finish with the following I told you a little bit about Judas and Catholicism a guy goes to confession and says forgive me Father for I have sinned the father said what have you done my son and he said I'm 72 years old and I just had sex with two 25 year old twins and the priest is appalled he said I can't believe this is happening I want you to say 700 times Hail Mary and walk around the church a thousand times and give a thousand dollars to charity and how long has it been since your last confession I've never been to confession what you're 72 years older you've never been to confession how can that be I'm Jewish so if you're Jewish what are you doing here and why you're telling me I'm telling everybody area yeah dan Ariely

Channel: JamesRandiFoundation

Views: 92,508

Keywords: The Amaz!ng Meeting, Dan Ariely (Author)

Id: G2RKQkAoY3k

Length: 34min 34sec (2074 seconds)

Published: Fri Oct 11 2013