I’ve been fortunate to be following Dan Ariely’s career since before his
first book became an international phenomenon back in 2008. The book,
Predictably Irrational, was a
New York Times bestseller. In 2010, he released a follow-up book called
The Upside of Irrationality. His latest book is called
The Honest Truth About Dishonesty: How We Lie to Everyone—Especially Ourselves and it comes out on June 5th. Dan is also a professor of psychology and behavioral economics at
Duke University.
In this interview, he talks about why people lie in some situations but
not others, why students cheat on tests when they know they could
suffer later in life, and more.
What makes somebody lie sometimes and tell the truth other times?
When people face this question about why people lie sometimes and
don’t lie other times, the common answer has to do with something about
the internal state about the person. The person is hungry, is tired, is
exhausted and there is some truth to that. There is some changes that
happen to us internally that make us cheat more or less. In particular,
one of the things we find is being mentally exhausted gets people to
cheat more, and here is the finding: There is something called
depletion. Depletion is the idea that when we exercise self control,
when we try to resist temptation, we try to resist a cake and a cookie
and
Facebook and
Youtube and saying something nasty to someone and so on. As we try and
resist temptation more and more and more our ability to resist
temptation diminishes until eventually we kind of collapse and give in.
Dishonesty is one of those things. As we get tired by resisting
temptation in all kinds of aspects of our lives we end up falling to
temptation to a
higher degree and cheat and lie to a higher degree. So,
going back to the question about why people lie sometimes and not other
times, there are clearly changes that happen within a person over time,
but what we find is that an even bigger effect has to do with the
environmental circumstances that are around us. So, often we think about
people as agent, so we decide and we act, and we act on our preferences
and we are kind of executing our own internal state, but the reality is
that the decisions people often make are best described by the
environment in which they are placed. When we place people in some
environments they are able to cheat to a higher degree and when they are
placed in a different environment, that same person with the same
mindset ends up cheating to a much lower degree.
So what are those environmental influences?
One of them has to do with the degree to which we can justify our
dishonesty and, in particular, the distance of the dishonest act from
money. So for example, in one of our experiments we found that, the
basic experiment looked like this, people have a
sheet of paper with 20
simple math problems that they can solve all of them if they had enough
time, but we don’t give people enough time. We give people only five
minutes, we give them the sheet of paper, we say “work as hard as you
can” and when the five minutes are over we say “please stop and count
how many you questions you got correct, remember that number then go to
the back and shred that sheet of paper. Then come back and tell us how
many questions you solved correctly and we’ll pay you accordingly, a
dollar per question.” Now, what people don’t know is that we played with
the shredder, the shredder only shreds the side of the page, but not
the full page and we can jump in and find how many questions people
really solved correctly.
So what did we find? We find that on average people solved around
four problems and report to be solving six. Okay, that’s a general
finding, and we find that the six is not comprised of a few people who
cheat a lot, instead it’s comprised of many people who cheat a little
bit. But, in another condition, what we do is we ask people to shred the
piece of paper, and when they come to us not to say “Mr. Experimenter, I
solved X problems, give me X dollars”, but to say “Mr. Experimenter, I
solved X problems, give me X tokens”. Now, people look into our eyes and
lie for pieces of plastic and not for money and what we find was the
people basically doubled their cheating. What that means is that when we
have an environment in which people can distance themselves from the
act of cheating, they’re not cheating for money, they’re cheating for a
piece of plastic, all of a sudden this environment can facilitate to a
much higher degree. There are many other influences like this and what
this means is that we need to think about the environment, we need to
think about regulation, we need to think about rules, we need to think
about professional cause of ethics because those things eventually have
much more to do with how people behave than individual personality.
Why do students cheat on tests when it will effect them later on in their lives?
So first of all, I think that students for sure, but most people in
general, don’t think much about what will happen later in lives, we have
this general problem of thinking about short-term and not thinking
about long-term and this is everywhere, right, it’s about why we
over-eat and under-exercise, and under-save and text and drive, don’t
take our medication on time and have unprotected sex, all of those
behaviors are due to the fact that we don’t think about long-term.
In the rational framework of course people always think about the
long-term and in the rational framework of cheating people think in the
long-term, but in reality we find that people don’t think so much about
the long-term. And this means, by the way, that the rules and
regulations and laws that rely on the long-term, that rely on prison
sentences, and probability that someday somebody might catch you are
much less effective then we think because when we are creating the rules
and regulations we have in mind a rational agent who thinks in the
long-term and human beings are not like that and
college students are of
course the same.
Can you name a situation when somebody was dishonest and it backfired on them? What about when somebody was honest?
So of course there are many cases where dishonesty has backfired and I
think the best example of this is the financial crisis. When Greenspan
went in front of Congress he said that he thought that companies would
self-regulate themselves, right, that the individual traders and bankers
of course have an incentive to be dishonest because they get to pocket a
tremendous amount of money from this activity- something that is good
for them in the short-term, but maybe not so good in the long-term. But,
for the companies this is really bad, the companies can go bankrupt. I
mean, in fact there was just a story recently of a trader who basically
caused his bank to lose 2 Billion dollars by misbehaving.
So, there’s lots of examples like this when individuals are
misbehaving
dishonestly in the short-term and not thinking about the
long-term and companies are not sufficiently successful in regulating
this behavior. In terms of being honest and it backfiring, it depends on
what you mean by “backfiring”. So, of course, if you work in a bank and
your bank people are perfectly honest, and then you have other banks
where people try all the funny procedures and they don’t have Chinese
walls and they sell stocks that are not good to their clients to take
them off of their hands and so on. All of a sudden if you’re honest, you
would do well by your clients, but you would be less wealthy.
And actually, one of our findings is that people’s standards for
morality are dramatically influenced by the behavior of people around
them and I think that if you have a situation where bankers are friends
with bankers and politicians are friends with politicians and they see
people in their social circle misbehaving in a dishonest way there is
basically a temptation to match that behavior and find a similar
behavior, find it socially acceptable, follow up on it and continue
behaving this way. And of course, the really sad thing about it is that
those things have a propensity for a slippery slope and escalation,
which I think is exactly what we’ve seen over the past few years and
sadly I have not seen any serious attempt to stop this escalation and
even to reset it, but we have to because we are getting into a worse and
worse situation over time.
Based on your research, what motivates people to behave dishonestly?
What we basically find is that people are a nice combination of
economic incentives and psychological incentives. Our economic side of
us wants to benefit from cheating, because cheating benefits us in the
short-term. Now, it might not work for us in the long-term, but because
we don’t think about the long-term, we focus on the short-term. On the
other hand, we have the psychology side of us, which makes us want to
feel that we are honest, moral people. We want to be able to look at
ourselves in the mirror and feel good about ourselves. It turns out we
are a combination of both of these forces. Now, you could say that you
could do one or the other, you could look in the mirror and either feel
good about yourself or you could be dishonest, you can’t do both. But,
it turns out that due to our flexible psychology, we can do both as long
as we cheat just a little bit.
As long as we cheat just a little bit we get to benefit from
cheating, just a little bit and we get to think of ourselves as honest
people. So the way to think about it is, imagine that you went with a
friend to dinner 10 times over the last year and then you ask yourself,
can you submit those things as expenses to the IRS on your report and,
you know, maybe you would not feel comfortable submitting all 10, but
two or three you would feel okay with. And that’s basically what we
find, people kind of make their own judgment and as long as we cheat
just a little bit, we benefit from cheating a little bit, but we can
still think of ourselves as honest, moral people. It’s this
psychological game that’s all around rationalization that is incredibly
important to understand because that is where dishonesty in the market
comes from and if we hope to stop it, we need to stop this ability that
we all have to cheat a little bit and quickly rationalize our actions.
What can your book teach us about how we should manage our careers?
Well, it’s about managing our career and other people’s careers. You
can speculate that there are basically bad apples out there, that some
people are bad and some people are good. All the only thing you want to
do is make sure you are a good apple and not a bad apple and that your
company doesn’t hire bad apples and that you don’t have bad apples as
friends. But, the reality what we shown in the research is that we all
have the capacity to become bad apples. Of course, there are some
psychopaths out there, but outside of those very very few individuals
all of us basically have the capacity to start misbehaving and over time
increase our misbehavior step by step until we become quite rotten. The
question of course is how do we stop it because it is not as if people
start their lives wanting to end being corrupt and having a chance of
being caught and going to jail, but we do it step by step without
thinking too much about what we are doing.
It’s as if, I’ll give you an example of an accountant who I talked to
at some point, this was the CFO of a big company and their company was
making money, but one quarter they were shy of
Wall Street
expectation and the CEO came and talked to him and said “oh, you know,
we’re so close, we’re almost, can you make the books a little better?”
and without thinking much, without thinking they were doing anything
really bad he kind of fixed the book just a little bit because they were
actually making money, they were making money, they were very close,
they were almost there, it was just a question of how they formulate the
books and think about it. Of course, they found justification for that,
but of course the next quarter was harder to justify and harder to
justify until things became too bad. Eventually he ended up in jail.
He wasn’t thinking when he started that this would be the end game,
but it did become the end game because it was time after time after
time, slightly one step after the other without thinking about the end
game. I’m not saying that we’re all likely to kind of behave as badly as
this CFO, but the reality is that we have a much higher capacity for
this behavior than we realize and we really have to create very strict
rules and regulation to protect ourselves against it. And, by the way,
the same thing works for me and the same thing works for science. We
often think that rules and regulations are to protect other people from
our misbehavior, I think they also have an incredibly important meaning
to protect us against ourselves.
They are basically to protect us against misbehaving in ways that we,
ourselves, wouldn’t want to. Finally, I should say that I think of
dishonesty as one, but great, example of irrationality, there is many
irrationalities, we have many odd and curious instincts and many odd and
curious quirks and motivations and dishonesty is one of them. If you
think about it from this perspective, it is something that acts on us
not within the rational framework. There are things that are rational
that don’t influence us and irrational influences that do influence us.
On top of that, we don’t exactly understand how it works on us and
because of that we really need to rely on science and findings, rather
than our intuitions when we come to think about how to create a better
environment or better regulations or how to protect ourselves.
Dan Schawbel is the managing partner of Millennial Branding,
a Gen Y research and management consulting firm. He is also the #1
international bestselling author of Me 2.0 and was named to the Inc.
Magazine 30 Under 30 list in 2010. Subscribe to his updates at Facebook.com/DanSchawbel.
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