Sunday, June 24, 2012

Why We Lie, Go to Prison and Eat Cake: 10 Questions With Dan Ariely

From Wired:
A professor of behavioral economics and psychology at Duke University, Ariely is the author of Predictably Irrational: The Hidden Forces that Shape Our Decisions, and The Upside of Irrationality: The Unexpected Benefits of Defying Logic, both New York Times bestsellers. Ariely’s new book, The (Honest) Truth About Dishonesty, explores some of the surprising reasons we lie to each other, and ourselves. Raised in Israel, Ariely holds Ph.D.s in both business administration and psychology. Wired senior editor Joanna Pearlstein spoke with Ariely as part of the Live Talks Business Forums series at the City Club of Los Angeles.

Wired: One of the key ideas in your book is that in order to combat dishonesty, we should understand the reasons people lie and cheat. Break it down for us: Why are we dishonest?

Dan Ariely: If you’re a fan of a sports team, it’s easy to see a call against your team as the referee being evil or stupid. You need to have a motivation to see reality in a certain way. The second thing you need is flexible rules. If the rules are incredibly strict, you can’t bend them in any way. But if the rules are slightly grey, there’s a zone in which you can cheat. And finally, you need a way to rationalize your actions for yourself.
I mean, today you probably will have some opportunities to take stuff and put it in your backpack, and nobody would know. You could take some silverware, there’s cups, there’s all kinds of things you could take home with nobody noticing, and no probability of being caught. If you’re a rational economist you would say, you should take all those options, there’s opportunity! But of course you think differently — if you did that, you’d feel you’re a bad person, and that’s what’s stopping you. The curious thing is that what stops us, doesn’t stop us from doing everything. We have a fudge factor, we have an ability to rationalize some dishonesty and as long as we cheat just a little bit, we can still rationalize it.

Wired: What implications does this have for our ability to prevent dishonesty?

Ariely: If you thought that crime or dishonesty is driven by a cost-benefit analysis, then you have some very basic solutions — for example, put people in prison. And people who were going to commit a crime would say, ‘Okay, I’ll go to prison, not worth it.’ I’ve been talking to big cheaters, including people who have been to prison, and I tell you, nobody I’ve talked to has ever thought about the long-term consequences of their actions. How many people who did insider trading thought about the probability of being caught and how much time they would get in prison? The number is incredibly close to zero, maybe exactly zero. What will happen if we increase the prison sentence? Basically nothing, because it’s not part of their mindset. What we need to understand is the process by which people become dishonest.

We can look at a cheater and say, we would have never been able to do that. But when we look at the long sequence of events, you see it happened over time. You can ask, did the person who was the criminal think they would take all of these actions, or did they just take one? They took one step that they could rationalize. And after they took one, they became a slightly different person. And then they took another step, and another step. And now you think very differently about dishonesty....MORE