The Truth About Dishonesty - Dan Ariely

anyone who believes in indefinite growth on a physically finite planet is either mad or an economist we don't want to focus politics on the notion that involves the rejection of principles around which a large majority of our fellows we are not as endlessly manipulable and as predictable as you would think I want to talk a little bit about dishonesty and cheating so first of all in order to get us thinking about this and how many people here have cheated since the beginning of 2012 lied yes of course and how about how many people have lied in the last month let me let me challenge you on that at the same time how many people here think of yourself as generally good honest wonderful people and this is the conundrum I want us to think about and one hand we admit that we are able to be dishonest on the other hand we think of ourselves as honest people how can we do both now the standard theory of honesty and dishonesty is the rational theory and the rational theory suggests that everything is about cost-benefit analysis you pass by a grocery store and you ask yourself how much money is in the till what's the chance somebody will catch you how much time will you get in prison and you weigh the cost in the benefits and if the benefit outweighs the cost you hit the gas bear the grocery store you rob them and if they the cost outweigh the benefit you don't and the standard fear is suggested it's all about how much we stand to gain probability of being caught and time in prison but it turns out those are really not driving much of dishonest behavior in fact in the u.s. we have the death sentence in some states have the death sentence and some don't but to the best we can we don't find any differences in crime rate which suggests that people just don't think about the long term consequences right this theory is about people thinking about the long term consequences oh I might get caught I might get I'm in the reality is that people just don't think about long-term consequences in almost any area of our lives think about yourself for example how many people here in the last week have eaten more than you wished you would exercise less less than you think you should how many people here have SMS to texted while driving come on if you think about it all of those are behaviors that show that people really don't think about the long-term consequences and we don't think about the long-term consequences in all kinds of areas of life including this honesty which suggests that the ways that we think will curb dishonesty like big prison sentences are actually not going to be effective so if that's not the right model what is the right model what does describe dishonest behavior and what I would like to propose is that human beings basically try to do two things at the same time on one hand we want to be able to look at the mirror and feel good about ourselves well that's kind of nice to be able to think of ourselves in this way on the other hand we want to benefit from being dishonest now you could say you could do one or the other you can either look at yourself as honest or you could benefit from this honesty you can't do both well it turns out that thanks to our flexible cognitive psychology and thanks to our ability to rationalize our actions we could do both and as long as we rationalize our actions and as long as we choose just a little bit we can benefit from cheating just a little bit and at the same time we can keep thinking of ourself as honest wonderful people so imagine that virtualization is like a balloon or machine and as rationalization increases our capacity to rationalize increase we can be more dishonest and feel okay about ourselves and as our capacity to rationalizing decrease it's harder for us to be dishonest and feel good about ourselves so let me turn it to you and let us think for a few minutes together about what kind of things would get people to rationalize to a higher degree what kind of things about our life in general would get people to more easily rationalize bad actions any suggestions think to yourself yes that everybody does that so before we talk about this let me describe to you how we measure dishonesty we measure dishonesty in a very simple way imagine you were all in the experiment I would pass you a sheet of paper with 20 simple math problems and I would say you have five minutes to solve as many of those as you can I'll give you $1 per question go you would turn off the page you will start working as fast as you can at the end of the five minutes I would say please stop count how many questions you got correctly and now go to the back of the room and shred your piece of paper and once you finish reading it come to me and tell me how many questions you got correctly people do this they count they shred they come to me and they say they solve six problems we pay them six dollars but the people in the experiment don't know is that the shredder has been fixed so the shredder only shred the sides of the page but the main body of the page remains intact we can jump into the recycling bin we can find out how many questions people really solve correctly what do we find on average people solve four problems and report to be solving six and by the way it's not as if we have a lot of big cheaters we have a lot of little cheaters and I would like to argue that this kind of reflects what we have in society sure there are some big cheaters out there people who just go all the way but there very few of them and in fact the magnitude of this honesty we most likely see in society is by good people who think they're doing good work but in fact cheating just a little bit but because there's so many of them of us this actually has a tremendous economic impact so let's go back to your point which is everybody else does that so imagine we run the same experiment in the in here but we hire an acting student and we ask that acting student to sit in the front row and 30 seconds into the experiment to raise their hand and said excuse me I solved everything what do I do now and the experiment is that you solve everything get your full payment and go home and you see that person now if you're in the experiment you're still problem number one there's no question in your mind that that person cheated right there's no way they could solve all twenty but you see them taking the money and going home what would happen to your own morality lots more people cheat but you could explain it in two ways you could say well we just exist demonstrated that in this experiment there is no downside to cheating here somebody cheated in an egregious way walked out nobody chased him they had no downside to cheating so that could be one mechanism the second mechanism is that it's not about the cost-benefit analysis it's about the fact that now you got a demonstration that somebody from your social group somebody from your society is cheating and therefore this is more socially acceptable to distinguish those with you did a few things but one of them was redress the acting student in a different sweatshirt and here's the story we ran this experiment University called Carnegie Mellon in Pittsburgh everybody was a Carnegie Mellon student everybody worked on the Gmail and uniform outfits watch it and so on the acting student included in the second experiment we dressed him up in University of Pittsburgh sweatshirt this is University nearby which is kind of a competitor what happens now when the University of Pittsburgh student cheatin get away with it you still know that in this experiment you continue to get away with it the cost-benefit analysis is the same but now you don't get the social proof about it what happens now cheating actually goes down right so when we think about it when other people are dishonest it compels us to find other things as acceptable but only if you're people within our in-group that we associate with in some general way if there are people that we despise in general or don't think about this very good people then it doesn't have any effect on us what else would change what else yeah okay so so if you think that the other people are somehow not appropriate not smart and not deserving so here's one experiment with it we went to coffee shops in Boston and we asked people hey would you do this experiment for us for five minutes for five dollars everybody said yes we gave them the task we explained to them what they were supposed to do to fill some paperwork then we came back five minutes later and we said here's your five dollars please count it and sign the receipt for five dollars but we actually gave them nine dollars how many people do you think would return the money none these are Americans in Boston now slightly more than 50% of the people returned the money and you could decide for yourself if this is a high number a low number in the second condition when the research assistant explained to them the experiment they interrupted in the middle they pretended that somebody was calling them they picked up the phone they ignored the participant and they talked for 12 seconds to John about pizza hey John what's up here pizza great tonight eight might my place cha put the phone down went back to explaining the results not only gave 99 dollars to people at the end of the experiment what happened almost nobody returned the money back now if you were a participant you could think to yourself that you're kind of doing justice to the world right here is somebody they just offended you and you're restoring karma by and taking their money back what else would get people to be more dishonest yeah relationship maintenance get to tell me a bit more you want to get friends with somebody yeah and this is actually quite quite important I think raised to Aryans work and we have lots of human values dishonesty honesty is one of them there are other human values there in question as well what happened with those values collide but here's another thing imagine that you have a friend and imagine that you care about this friend and now if you're dishonest this friend gets to benefit as well what would happen so in one experiment we did this which measured how much people are dishonest when they stand to gain from their dishonesty and we measured what happened if the other person gets to gain to benefit from their dishonesty as well and what we saw is that when somebody else gets to benefit people are more dishonest it's kind of the Robin Hood syndrome right I think it is by the way why politicians cheat so much right and if you think about it when politicians lie they can probably very easily tell themselves that are lying for the benefit of other people if you only vote for me this will not just be good for me this will be fantastic for all of you it could justify lots of things and by doing by having this justification being able to be more dishonest what else yeah well nobody else gets impacted by yeah I think we all recognize that if we took ten cents from petty cash box we could not help but think of ourselves as this but if we took a pencil we would feel very differently in fact if we took a ten cents from petty cash box and went to buy a pencil we would still feel like this but taking a pencil is kind of removed from money there's all kinds of things about it that don't make it feel as real so here's the experiment we did on this the first condition was just like the one I described before you solve the problems you shred the piece of paper you come to the experimenter you say mr. experimenter I solved X problems give me X dollars in the second condition people shred the piece of paper come to the experimenter and say mr. experimenter I solved X problems give me X tokens and we pay people in pieces of plastic they take these pieces of plastic they walk twelve feet to the side and change those for money so in fact when they're looking into somebody in the eyes they are lying for something that is one step removed for money but it becomes money very quickly what happened in our experiments people double their cheating by the way this for me was one of the most worrisome experiment we've ever created because if you think about it we're becoming a cashless society we're becoming a society with a higher distance between us and the consequences of our actions credit cards electronic wallets mortgage-backed securities stock options think about all of those things that represent psychological distance between us and the people us and money could it be that as the distance increases people can be dishonest but at the moment don't think of themselves as doing anything dishonest you don't see who exactly you're affecting even though you might affect the whole global economy that it might be very easy for people to take steps in that wrong direction and still think of themselves generally as not doing anything terrible so we talked about what gets people to cheat more what would get people to cheat less what the same way that we thought about rationalization is going up what would get rationalization to go down what will get people to be able to rationalize to a higher degree to kind of scrutinize their own actions yeah being reminded of values yeah we've done we've done that in a couple of ways and it's really quite I think optimistic so we went to UCLA Los Angeles and we asked about 500 students to try and recall the Ten Commandments by the way none of them could remember all Ten Commandments and they invented lots of interesting ones but after trying to recall the Ten Commandments when we gave them the same opportunity to be dishonest nobody was dishonest in fact even when we take self-declared atheist and we ask them to sworn the Bible and we give them a chance to cheat they don't cheat so this suggests that there is something about reminders that the moment we think about morality even if it's not our own moral code all of a sudden we were kind of supervising ourselves to a higher degree were more thoughtful about our own actions and as a consequence we let ourselves get away with less activities so this is no offense to the Catholic in the audience but we went to Italy to talk to real Catholics we went to talk to Catholic priests and we said from an economic perspective we don't understand confession please explain to us they said if you can confess and be absolved shouldn't you cheat more shouldn't you cheat on the way to confession if all you wanted was to minimize time in purgatory it looks like that's the winning recipe the priest said no so here three theories how confession might work one theory is that you think to yourself I want to rob this convenience store but I'll have to confess it'll be unpleasant the priest would think badly of me and this added cost makes the whole thing not worthwhile that's one possibility we don't find any evidence for that version of it another possibility is like the Ten Commandment experiment I told you about you come out of confession and you feel good or wonderful about yourself and for a little while longer you want to keep that feeling of being good we find some evidence for this but the most interesting version is the following when we gives people hundreds of opportunities to steal and to cheat over time small amounts but hundreds of those what we find is that people are slightly dishonest balancing feeling good about myself cheating a little bit feeling good chinga and then at some point many people switch and start cheating all the time now if people cheat a lot all the time why would they ever stop why would you ever stop if you think you're going to hell in the Catholic version why would you ever stop the Catholic confession might have actually stumbled on this witness this might be a really good idea that if you are cheating a lot maybe you need to be able to open a new page so we did these experiments we do a non Catholic kind of confession people cheat a little bit they cheat a lot we give them a chance to say what they have done badly we give them a chance to and ask for forgiveness from whatever spirits they believe in what happens after those two actions together cheating goes down opening a new page does seem to be very successful now of course you can think about the South African reconciliation act there's a kind of aversion of confession where a country basically stood up in him how do you move for an apartheid aid to a post apartheid there's no smooth transition but if you stand up and you said here's all the horrible things we've done and we're really sorry maybe it can open a new page and at least give you a chance for transitioning and just by the way I think is something that religion figured out and the question is how do we put it into civic society right should we create opportunities for bankers for example to ask for forgiveness from time to time and start and start a new page you know we from the outside we look at crime and we look at like 12 years or eight years of crime and we say to yourself we could have never done that but I've talked to many criminals and judges and lawyers and to most agree actually unanimously none of them thought about the whole sequence they thought about the first step and they could rationalize the first step and then they heard about the next step and the next step and the next step and then at some point it was just too late and they were doing just things to cover themselves up and this is exactly the point when people realize something bad that confession could actually be helpful and I think it's really interesting to ask the question is how do we as a society move to a situation that allow people to open new pages people will transgress there's nothing that we can do about it how do we get people to feel clean again and able to act on their goodness the final thing I want to tell you is that we've ran this experiment in other countries as well so the first country I went to test was Israel I was sure that the Israelis would cheat more than the Americans but they cheated just the same Francesca Gino my Italian collaborator said come to Italy we'll show you I'll show you what the Italians can do we tried Italy the Italian chick just like the Americans we tried Turkey we tried the UK by the way my marissa's assistants said that in the they never were cursed at the same quality and frequencies in the UK but they're British G just like the Americans no difference yeah we tried channel China and we tried Canada because the Canadians usually think that they cheat less than the Americans that you just the same now here's the strange thing everybody who's travelled feels very strongly that in other countries cheating feels very differently this honestly feels very different in other places how can it be that in our experiments we find no differences and here is my current interpretation of this current understanding of this our experiments are detached from any cultural context they are general they are abstract they're not embedded in any previous interactions and because of that they measure the general human fudge factor they measure our ability to rationalize across different behaviors and you know what we're not very different from one another in that regard but that doesn't mean that culture doesn't matter culture does matter but if you have a kind of like a fudge factor culture takes domain by domain specific activity and can say you know what in this domain we accept a higher fudge factor think about lack of compliance with taxes some country said more percent is okay think about anybody here French nobody think about infidelity right if you're French this is not a moral issue right I mean it's not it's not part of the moral fiber from so many people so basically and again think about even within a country how some people think about downloading illegal music it's not a moral issue so culture is important but what culture does is it works on a domain by domain a specific way and changes how we viewed that domain in a general moral view we did find one cultural difference now when we run these experiments we run them in one of two ways we either go to universities and test university students or we go to bars and we go to bars we assume that people who go to bars are kind of the same everywhere and when we go to bars we also change the payment so it's proportional to the cost of beer so we pay people such that for every four question they can get the amount of money that they can buy them a glass of beer in that particular place so that's kind of our international currency so in one time the one time we found this difference was we went to a bar in Washington DC which is a Bauer a congressional staffers junior politicians hang out in and we went to another bar in New York City were bankers hangout him and this was the only time we found the difference so what do you think who cheats more the bankers or the politicians I will show it was going to be the politicians but actually it was the bankers the bankers cheated 2 to 1 twice as much but I should point out that these were junior politicians there were congressional staffers so maybe there's room for growth as a continuation let me let me just summarize with the following if you think about it this is really the whole thing is a question of conflicts of interests and conflicts of interest mean that we have a pool to see reality in a certain way and we could justify our view and imagine that you like a particular football soccer team and you go to a game and the referee calls the call against your team is there any way but for you to think the referees evil vicious stupid blind something like that of course not you can't help but having your motivation influenced how you see reality now replace your team with 5 million dollars or with something else and you can see how the same forces would get you to see reality in the biased way so imagine you are banker few years ago and imagine that I paid you five million dollars a year to view mortgage-backed security as a good product could you help but seeing them is better than they are probably not now I'm not saying that you will shift your opinion from thinking that are terrible to thinking are wonderful and I'm not saying that in your heart you will know that they are terrible but you would tell your clients that they are wonderful but you'll probably shift your understanding of them and what if everybody around around you thought that they were great as well you could chief your understanding further and what if they were difficult to compute and you were sitting there with a big spreadsheet and you would different calculations and parameters and estimators and then the bottom you would see their final value but it would also reflect on your end of your bonus wouldn't you shade your evaluation even further and this is actually quite important because if you think about the whole financial crisis we've taken people and we put them in situations which basically are guaranteed to blind or at least to distort their vision and we expect people to overcome that you know we all have a tendency to think of people as good or bad and we say as long as we kick the bad people everything would be fine but the reality is that we all have the capacity to be quite bad under the right circumstances and I think in banking we've created the right circumstances for everybody to misbehave and because of that it's not such a matter of kicking some people and getting new people in it's about changing the incentive structure that because unless we change that we're not going to get but not going to get so much and the last story I'll tell you is the story of my own about conflicts of interests so as you can see I was badly burned many many years ago quite a few years after I got out of hospital I come back for a checkup and the head of the department catches me and he said Dan I had a fantastic new treatment for you you don't hear that every day so I go with him to his office and he says that the left side of my face when I shave I have stubble everybody does and my hair is black so it's very visible but the right side of my face because it's burned has no stubble I have no hair so what is his suggestion he's going to tattoo the right side of my face to match the left one so he says go home shave and come back and I go home and I think you know what what do I want it to match like the morning shave day after five o'clock shadow how do I maximize the number of hours in the day when I'm going to be the most similar to symmetric when when does it matter anyway I go home I shave I come back to his office and I say you know what can I see some pictures of people you've done death and he cuz he said he can't show me the whole face because of privacy but he shows me little pictures of cheeks and you know sure enough they look like chicks we do black dots and I said what happened when I grow older what happens when my hair becomes white he said oh don't worry about it we can laser it out when the time when you think oh and then I say you know what I don't think it's for me just don't feel comfortable with it let's let's not do this and then he turns to me and he said then what's wrong with you do you get some pleasure for being non symmetrical do you enjoy looking different but you know this was this was kind of shocking because I was in hospital for almost three years he was my physician for three years and I've never got this level of guilt trip over a particular treatment anyway I leave him and I go to his deputy and I said what's going on and he said well we've done this for two patients already these are the patients I saw their picture and you need the third one for an academic paper and I was kind of ideal right half the face burned half the face not was kind of really good for that particular paper now here's the thing this guy was my physician for almost three years he was a fantastic guy this right side of my eyebrow he spent I think almost nine hours creating it he took a Doppler machine he tracked the blood vessels he tracked the particular piece of skin and a blood vessel going down he isolated them pushed it under the skin just so I have half an eyebrow he started working like it's seven or eight o'clock at night so he worked almost the whole night creating me half an eyebrow a fantastic amazing physician I have lots of things for him at the same time it does moment despite being a wonderful human being and caring about me in general he was a prisoner of his own conflicts of interest right he couldn't see reality from my perspective and it was trying to coerce me into doing something it was good for him and not for me and I think we need to understand that we need to understand it in the right circumstances we could all try to coerce other people and we all are likely to be coerced by other people even if they don't see that they're doing it for their own benefit and that's the tricky thing about conflicts of interest their every word they are pervasive we're building system with conflicts of interest but we don't see how they work and particularly we don't see how they're influencing us so that's it for me thank you very much [Applause] you

Channel: RSA

Views: 128,975

Keywords: Dan Ariely, behaviour, psychology, behavioural economics, Duke University, honest, dishonest, honesty, dishonesty, motivation, human, the rsa, rsa, royal society of arts, rsa events, 21st century enlightenment, talk, debate, discussion

Id: ZGGxguJsirI

Length: 28min 45sec (1725 seconds)

Published: Wed Aug 15 2012

Reddit Comments

[u/Dillzman]

His books on behavioral economics are fascinating.

[u/JThoms]

I thought the bit about self-declared Atheists swearing on the Bible was interesting. I mean, as a self-declared Atheist, I just see the "swearing on the Bible" as a symbolic act. It could have been the manual from Goldeneye and I'd be just as honest/dishonest.