“Let Me Come Right Out and Say It: You Cheat”

“As long as we cheat by only a little bit, we can benefit from cheating and still view ourselves as marvelous human beings,” writes behavioral economist Dan Ariely in his new book.

Image by Lisa Fairstein courtesy of the author’s website.

Very few people cheat a lot, but most people cheat a little.

That’s the conclusion of behavioral economist Dan Ariely, whose new book The (Honest) Truth About Dishonesty: How We Lie To Everyone — Especially Ourselves (HarperCollins, 2012) takes a closer look at what’s known in the rational economics field as SMORC, or Simple Model of Rational Crime.

Ariely writes: “The prevailing notion of cheating comes from the University of Chicago economist Gary Becker, a Nobel laureate who suggested that people commit crimes based on a rational analysis of each situation.” People weigh what they’ll get with what the chances are that they’ll get caught and punished some way — they simply make a “comparison of possible positive and negative outcomes.”

But, Ariely asks, what if this view of why we aren’t honest all the time is inaccurate or incomplete? His book is an examination of what else might be causing people to cheat.

His central thesis, he writes on page 27, is that “our behavior is driven by two opposing motivations. On one hand, we want to view ourselves as honest, honorable people. We want to be able to look at ourselves in the mirror and feel good about ourselves (psychologists call this ego motivation). On the other hand, we want to benefit from cheating and get as much money as possible (this is the standard financial motivation). Clearly these two motivations are in conflict. . . This is where our amazing cognitive flexibility comes into play. Thanks to this human skill, as long as we cheat by only a little bit, we can benefit from cheating and still view ourselves as marvelous human beings.”

Ariely is a professor at Duke University’s Fuqua School of Business (he was at the MIT Sloan School of Management from 1998 to 2008), and bases his book on experiments with about 30,000 people.

Ariely says that his experiments show that that a little rationalization goes a long way. In one test, the administrator takes a cell phone call while he’s giving instructions to the participants. The participants of this test end up cheating more than participants in the same test without the phone interruption. “I think this goes back to the law of karma,” Ariely told NPR. “If somebody has mistreated you, now you can probably rationalize something to a higher degree.”

Some companies, Ariely says, “intuitively understand this principle and use it to their advantage.” Overstating billable hours is an obvious area. One young economic consultant Ariely quotes says that, “From the most senior people all the way to the lowest analyst, the incentive structure for consultants encourages cheating: no one checks to see how much we bill for a given task; there are no clear guidelines as to what is acceptable; and if we have the lowest billability among fellow analysts, we are the most likely to get axed.”

The table of contents alone offers a good taste of the point of view of the book. Here’s the description of what’s in Chapter 5, “Why Wearing Fake Makes Us Cheat More”: “The secret language of shoes . . . From ermine to Armani and the importance of signaling . . . Do knockoffs knock down our standards of honesty? . . . Can gateway fibs lead to monster lies? . . . When “what the hell” wreaks havoc . . . There’s no such thing as one little white lie . . . Halting the downward spiral.” You can read an excerpt of chapter 5 at Scientific American’s website.

You can also read a Q&A with Ariely about how to price products and more from the MIT SMR archives. The interview is from 2009, when one of his earlier books, Predictably Irrational: The Hidden Forces That Shape Our Decisions (HarperCollins, 2008), was released.