Dan Ariely: The Truth About Cheating
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Image: M. Lengemann; Illustration: Vidyanand Kamat; Imaging: Sushil Mhatre
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DAN ARIELY, Professor, Behavioral Economics, Duke University
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The James B. Duke Professor of Behavioral Economics at Duke University, Dan Ariely is also the best-selling author of ‘Predictably Irrational: The Hidden Forces that Shape Our Decisions’. His next book ‘Perfectly Irrational’ will be published next month.
Using simple experiments, Ariely, 42, studies how people behave, as opposed to how they should or would perform if they were completely rational. His interests span a range of behaviours such as buying (or not), saving (or not), ordering food in restaurants, pain management, procrastination, dishonesty, and decision making under different emotional states. He is regular on twitter .
My interest in the irrationality of human behavior started many years ago in hospital after I had been badly burned. If you spend three years in a hospital with 70 percent of your body covered in burns, you are bound to notice several irrationalities. The one that bothered me in particular was the way my nurses would remove the bandage that wrapped my body. Now, there are two ways to remove a bandage. You can rip it off quickly, causing intense but short-term pain. Or you can remove it slowly, causing less intense pain but for a longer time.
My nurses believed in the quick method. It was incredibly painful, and I dreaded the moment of ripping with remarkable intensity. I begged them to find a better way to do this, but they told me that this was the best approach and that they knew the best way for removing bandages. It was their intuition against mine, and they chose theirs. Moreover, they thought it unnecessary to test what appeared (to them) to be intuitively right.
After leaving the hospital, I started doing experiments that simulated these two ripping methods. And I found that the nurses were wrong: Quick ripping turned out to be more painful than slow ripping. In my experiments, I discovered a collection of tricks that could have been used to lessen the pain or manage it more effectively. For instance, they could have started from the most painful part of the treatment and moved to less painful areas to give me a sense of improvement; they could have given me breaks in between to recover. There are great lessons to be learned from such experiments, lessons that apply to economics, markets, policymaking, and even our personal lives.
As it turns out, it is not that useful, and sometime even costly, to base our decisions on our intuitions. Instead, we need to inject some science in the way we go about everyday life because if one merely keeps following his instincts, he will continue making the same (preventable) mistakes.
Over the years, I have examined many topics related to the mistakes we all make when we make decisions, and one topic that I have explored in some depth is that of cheating behaviour, and I would like to describe this in a bit more depth.
We have recently seen a number of big corporate frauds and stock market scandals. The question arises: is it just the case of a few bad apples or is it a deeper systemic problem? The answer, we’ve found, lies in conflicts of interest. What happens when you put good people in situations that create conflict? They usually succumb to temptation. You see it in everybody, be it politicians or businessmen. So, how do we understand these influences in order to prevent them?
In our experiments, we find that a lot of people cheat by just a little bit. In standard economics, cheating is supposedly a straight cost-benefit analysis. People look at the odds of getting caught and the associated punishment, and then cheat when it makes sense to do so. However, in our experiments we find that people do not act strictly according to this model; they cheat only to the extent that they can continue to feel good about themselves and rationalise their actions. You can call it a Personal Fudge Factor, a limit up to which human beings comfortably cheat without feeling bad about it.
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Thanks and regards,
Geetha
