Table of Contents
- a. Testing the SMORC, Part I
- b. Testing the SMORC, Part II: Decreasing theChances of Being Caught
- c. Testing the SMORC, Part III: Increasing the Potential Reward
- a. The Divided Psyche
- b. Rationalization and Self-Deception
- a. In the Lab
- b. In the Real World
- c. Practical Repercussions
- a. The Trouble with Conflicts of Interest
- b. Disarming Conflicts of Interest
There is certainly no shortage of lying, cheating and corruption in our society today. At their worst, these phenomena do substantial damage to our communities and the people in them. Picking on the corporate world for just a moment, consider a few high-profile examples from the last decade: the scandals at Enron, WorldCom, Bernard L. Madoff Investment Securities, Haliburton, Kmart, Tyco, Bristol-Myers Squibb, and a host of banks in the financial crisis of 2008.
If you are a particularly pessimistic person, you may think that people are fundamentally self-interested, and will engage in dishonest and corrupt behaviour so long as the potential benefits of this behaviour outweigh the possibility of being caught multiplied by the punishment involved (known as the Simple Model of Rational Crime or SMORC). On the other hand, if you are a particularly optimistic person, you may think that the lying and cheating that we see in our society is largely the result of a few bad apples in the bunch.
Given that the way we attempt to curb cheating and corruption depends largely on which view we think is correct, we would do well if we could come up with a proper understanding of these tendencies, and under what circumstances they are either heightened or diminished. Over the past several years, the behavioral economist Dan Ariely, together with a few colleagues, has attempted to do just this—by way of bringing dishonesty into the science lab. Ariely reveals his findings in his new book, The (Honest) Truth About Dishonesty: How We Lie to Everyone—Especially Ourselves.
In order to get at the truth, Ariely invited subjects into his lab and gave them tasks with monetary rewards, where cheating was a very real and clear possibility. As you can tell from the title of the book, Ariely found that cheating was not confined to a few bad apples, but was in fact very widespread. On the bright side, though, Ariely also found that the vast majority of his subjects did not cheat nearly as much as they could have, but instead confined themselves to just a little bit of cheating.
Given his findings, Ariely concludes that most of us are torn between two conflicting impulses. On the one hand is the desire to get ahead by way of dishonesty, and on the other hand is the desire to nevertheless think of ourselves as genuinely honest and good people. Getting the best of the both worlds can be tricky, but we manage to do so by way of resorting to our trusty capacities of rationalization and self-deception. Of course, different people show different powers of rationalization and self-deception, and also different circumstances can alter the terms of the negotiation significantly for each of us, thus leading to more or less cheating.
For instance, Ariely found that those who are especially creative are particularly good at rationalization and self-deception, and therefore tend to cheat more so than others (in fact, Ariely found that even priming normal subjects with words related to creativity can increase their cheating behaviour). In addition, he also found that several factors influence the amount that people cheat in general. These factors included being reminded of one’s morals; playing for tokens representing money, as opposed to money itself; having one’s resolve broken down by will-power depletion; wearing counterfeit clothing and merchandise (as opposed to the genuine article); having one’s self-confidence artificially inflated; witnessing other people cheating (either from one’s own in-groups, or from out-groups); cheating to benefit others etc.
While these findings are interesting in their own right, Ariely insists that they also have practical value, as he uses his findings to chart out suggestions with regards to how we can minimize cheating and corruption in our own lives, as well as in society at large.
Here is Ariely speaking about his new book:
What follows is a full executive summary of The (Honest) Truth About Dishonesty: How We Lie to Everyone—Especially Ourselves by Dan Ariely.
There is a story told in Plato’s Republic popularly known as ‘The Myth of the Ring of Gyges’. In the story, the shepherd Gyges finds a ring that is capable of making the wearer invisible. Immediately recognizing the potential of the ring, Gyges slips it on and heads to court where he seduces the queen and convinces her to help him kill the king, and thereafter takes over the kingdom (loc. 2905).
Put yourself in Gyges shoes for a moment. If you were given the opportunity to take whatever you wanted unjustly but with complete impunity, would you do it? In other words, is the fear of being caught and punished the only thing that keeps you from being dishonest and unjust? Now consider the population in general. What percentage of the population do you think would take the opportunity to behave unjustly if they knew that they could not be caught and punished?
If you found yourself doubting your own resolve, and/or believing that very few people, if any, could resist such a temptation, then you probably accept the Simple Model of Rational Crime (SMORC). According to the SMORC, our deciding whether or not to commit a crime really comes down to nothing more than a cost benefit analysis that includes 3 factors: “(1) the benefit that one stands to gain from the crime; (2) the probability of getting caught; and (3) the expected punishment if one is caught” (loc. 240). In other words, moral considerations really aren’t a factor in our deciding whether or not to commit a crime (presumably because moral considerations are actually nothing more than the fear of being caught).
Now, if you are more optimistic about your own resolve, and/or suspect that fewer people would be willing to act unjustly than might be generally believed, then you probably question the validity of the SMORC. The question as to whether the SMORC is accurate is interesting in its own right, but it also has important repercussions for public policy. Indeed, as Ariely points out, if the SMORC is valid then there are only two clear-cut ways to curb crime: “the first is to increase the probability of being caught (through hiring more police officers and installing more surveillance cameras, for example). The second is to increase the magnitude of punishment for people who get caught (for example, by imposing steeper prison sentences and fines)” (loc. 128).
If, however, the SMORC is invalid, and there are considerations other than just the 3 mentioned therein, then it is important to identify what they are, in order that they may be accommodated in our efforts to curb crime. In the author’s own words, “if the SMORC is an imperfect model of the causes of dishonesty, then we need to first figure out what forces really cause people to cheat and then apply this improved understanding to curb dishonesty. That’s what this book is about” (loc. 132).
a. Testing the SMORC, Part I
In order to help shed some light on the matter of dishonesty and cheating, Ariely and his colleagues Nina Mazar and On Amir decided to set up a little experiment (loc. 248). The team invited subjects into the lab and had them perform a set of 20 arithmetic problems with a 5-minute time-limit and a monetary reward of 50 cents for each correct answer (loc. 255). The arithmetic problems (called matrices) were such that the subjects were presented with 12 numbers in a 4 X 3 grid where they had to identify the 2 numbers that, when added, equal 10 (loc.259). Below is an example of such a problem (from loc. 259). How fast can you find the 2 numbers that add up to 10?
Again, the subjects were presented with 20 such matrices and had 5 minutes to answer as many of them as they could, with a reward of 50 cents per correct answer. In the control group, the subjects were asked to bring their answer sheets up to a verifier once the 5 minutes were up, and the verifier would count their correct answers and give them their cash reward (loc. 266). In the experimental group, on the other hand, the subjects were asked to tally up their correct answers themselves when the 5 minutes were up, then proceed to the paper shredder at the back of the room and shred their answer sheets, then come back up to the front and inform the verifier of how many correct answers they scored and pick up their cash reward (loc. 271).
*For prospective buyers: To get a good indication of how this (and other) articles look before purchasing, I’ve made several of my past articles available for free. Each of my articles follows the same form and is similar in length (15-20 pages). The free articles are available here: Free Articles