The Context of Our Character (Predictably Irrational) Pt. I & II

by D. Ariely

Pt. I

  • Financial cost of workplace fraud and theft estimated at $600B/yr
    • cost of all robberies in U.S is only $525M

Critical question: Why are some crimes, like white collar crime, less judged than others?

Two kinds of dishonesty:

  1. blatant crime: i.e. criminals robbing a gas station
  2. Generally honest people doing small things like borrowing a pen from a conference room
  • Author conducted honesty experiment at HBS (and later UCLA, MIT, and Princeton):
    • Multiple-choice standard test
      • First group paid $.10 for ea. correct answer on bubble sheet
      • Second group with same setup BUT with pre-marked correct answers on bubble sheet; could covertly change answers…also paid $.10/per right answer
      • Third group with same setup but could shred original answers and transfer their answers to a new bubble sheet so there was no evidence of wrongdoing
      • Fourth group could destroy all answers (original and transferred) and just take money from a jar based on what they think they got right
    • Experimenters were testing whether people would cheat…
    • First group had no way to cheat and got a 32.6 avg. score
    • Second group scored a 36.2 and so did the 3rd and 4th groups; all three groups cheated
    • Further experiments yielded similar results as well
  • People are dishonest only to the point that suits them; people don’t want to be caught so even when you can shred evidence they don’t claim perfect scores
  • Theory: people want to be honest, but our honesty monitors only kick on for big transgressions
    • i.e. taking one pen from a conference room is fine, but not the whole box
  • Sarbanes-Oaxley was supposed to keep companies honest, but it’s been somewhat ineffective
  • In other studies, telling people to recite the ten commandments before assigning a task decreased their likelihood of cheating
  • People who sign professional codes are less likely to cheat as well
    • (This is why they make us sign honor statements)
    • this method only works when done repeatedly before opportunities to cheat (i.e. before a test)
  • US 20th most honest country in the world; New Zealand #1

Pt. II

  • Ran experiment
    • Put 6-pack of cokes in fridge in dorm room– they were gone within 72 hours
    • Put $6 in cash in same fridge, no one touched them
  • Conducted another experiment similar to in Pt I…outcome was similar: if given chance to cheat, people cheats BUT kicker was experimenters used tokens instead of cash. More people cheated when it was token-based system because they thought it wasn’t material, even though they were told it was redeemable for real cash
    • A way to mitigate this issue is to put the price of things on objects

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