So what we thought, was that maybe what's going on here, and there's a fudge factor,
that people try to balance two forces. On one hand, we want to look at the mirror
and feel that we're good honest wonderful moral people, that's the psychological
benefit of viewing ourself positively. On the other hand, we want to benefit from
cheating, that's the economic incentive. Now usually you would say, you can have
one or the other. How can you both think of yourself as a
wonderful honest person, and benefit from cheating at the same time?
It doesn't work. Well, maybe, maybe due to our flexible
cognitive ability, maybe due to the fact that we can rationalize things very
quickly, as long as we cheat just a little bit, we can both benefit from cheating,
just a little bit, and we can still view ourself as honorable people.
And that's what we call the fudge factor. That the moment we start creating a
dishonest behavior, there's a range before it invokes a different concept of
ourselves. And in that range, we could both be
dishonest, and still think of our self as honest people.
So how do we test this kind of a theory? The first thing we wanted to do, is we
wanted to take some approaches and shrink the fudge factor.
We want to get people to cheat less by, but not by manipulating their economic
variables. And the first idea for this came from a
little joke. And the joke is that a guy goes to the
Rabbi and he said, Rabbi you wouldn't believe what happened to me, somebody
stole my bicycle from Synagogue. And the Rabbi is appalled, he say I can't
believe this is happening, this is awful, this is terrible.
I tell you what you do, come to synagogue next week and sit in the front row.
And as we go over the Ten Commandments, turn around, and look at everybody in the
aisles. And when we get to Thou Shalt Not Steal,
see who can't look you in the eyes, you'll know that's your thief.
The guy's very excited about the advice. The rabbi is very excited about the
advice. He comes to synagogue, sit in the front
row, turns around during the Ten Commandments.
He comes to the Rabbi at the end of the service.
He says, "Rabbi, you wouldn't believe it. What a fantastic idea, it worked just like
a charm. The moment, the moment we got to "Thou
shall not commit adultery" I remembered where I left my bike.
Now where, [laugh] where is this joke leading us?
You probably think to yourself where is the experiment in this thing?
Well, we went to UCLA, and we asked about 500 students to try and recall the ten
commandments. Interestingly by the way, none of them
could recall all ten commandments and quite a few of them invented new ones, but
that's a topic for a different discussion. But after getting them to try and recall
the ten commandments we gave them the same math task.
And we were wondering how much would they cheat after just thinking about the ten
commandments. What did we see?
Zero cheating. Now it wasn't as if the people remembered
moral commandments. Presuming the more religious people
cheated less, and the people who could hardly remember any commandment cheated
more? No, nobody cheated.
In fact even when we take self-declared atheist, and we asked them to swear on the
Bible, and then we give them a chance to steal from us in the same way in the same
task, we see no cheating whatsoever. So this suggests that it's not about
cost-benefit, it's not about people thinking about heaven or hell and this is
why they should be honest or not. It's about reminding people about their
own morality, because even if you remind people about morality that is not their
own, like atheists are being reminded about the Ten Commandments.
Being, thinking, just thinking about morality, shrinks our fudge factor, get us
to be a bit more careful about our own behavior and therefore allowing us to be
more, more honest. Now, eh, this was kind of an interesting
idea. But you know religion and civic society
and there's all kinds of issues whether we want to involve religion in many, in many
places, so the next thing we decided to do was to try a secular version of it.
And at the university it's very natural to use the honor code.
So we did this model at MIT and at Yale. We went to the students.
And we edit one sentence to the beginning of the test.
I understand that this short survey falls under the MIT or Yale honor code
signature. What happened?
People signed, they did the test, they shredded, no cheating whatsoever.
And no cheating whatsoever despite the fact that neither MIT nor Yale actually
have an honor code. Now this means that those two universities
don't have specific costs associated with cheating.
But nevertheless, being reminded about some moral element decreased cheating so
dramatically we couldn't detect any. Now in contrast, we went to another
university that has a very strong honor code.
We went to Princeton. Princeton has a very strong honor code.
They take the freshmen and they give them a, a week long, a lesson on honesty.
There's lectures and discussion, the a capella group has a song about it, it's,
the whole week is a crash course on morality.
We waited two weeks, after these freshmen finished with their crash course on
morality, and we tempted them to cheat in the same way, some of them with signing,
some of them without signing. What do you think happened?
Would the Princeton student be different than the Yale, and MIT student?
They were not. When they did not sign the code, they
cheated just like the MIT and Yale student.
When they signed, they didn't cheat just like the MIT and Yale students.
So this is kind of a good news, bad news. The bad news, is that a week-long crash
course on morality doesn't seem to have any measurable effects two weeks down the
road, at least not the Princeton version of it.
And I think the same thing applies to many corporate lessons and, university, classes
and so on, in morality. Morality training just doesn't seem to be
that effective, that's the bad news. The good news, is that reminding people
about their own morality, whether it has consequences or not when, like Princeton,
it has really huge penalty if you're being caught cheating versus MIT and Yale, that
you don't, that seemed to actually make a big difference.
So rather than thinking about global cultural changes, that might be very nice
but very hard to achieve. Maybe what we need to focus on, is to
think about how we change things just before people are tempted to be dishonest.
In the next version of this we tried one more thing, we tried some people signed
first, before they did the test, and some people signed afterward.
What did we find? If you signed first, people don't cheat.
If you sign at the end, people cheat just a lot, because it's finished, you finished
cheating. And so with this idea we went to the IRS
and we said to the IRS think about all the IRS forms.
Right. People finish the IRS form and then at the
end, many pages later you sign. At that point your signature is not doing
anything to prime morality. And nobody's going to say, oh, yes, let me
sign, let me go back and fix things. No, cheating is over by that time.
The form is being finished. So we said to the IRS, why don't you put
the signature up front? Why don't you start by signing?
Eh, well the people at the IRS said this is illegal, because signature is meant for
verification, not for priming morality. And you can actually see how signature has
these two very different functions, if it's in the front or in the back.
So we said okay, we understand this. Why don't you put both the signature in
the front and the signature in the back? Well, they said, the people at the IRS
said, well, that's confusing. I don't know if you've seen the IRS forms
recently, or the IRS tax a code, but you know the idea that signing twice is
confusing, baffled me a little bit. I was speechless.
But then I said okay, if that's confusing how about if the first item on the tax
return, would ask people would you give $25 to a task force to fight corruption.
And we said this is not just a signature, this is asking people whether they want to
put money towards something. And if people commit, and commit money
towards something, there's a good chance that later on, they will continue acting
in a more, eh, appropriate, honest, behavior.
Plus, we said, the people that don't want to give money a task force to fight
corruption, maybe you can audit them, to a higher degree.
Anyway, the IRS did not want to talk to us anymore.
But we went to talk to an insurance company.
Interesting, this was insurance company that insures, eh, homes and houses, lots
of personal things. And they told us, that they think that
their cheating, that they are seeing, is very much like in our experiments.
They think that very few people invent burglaries, and arsenies, and larceny, and
car theft, but lots and lots and lots of people, when something bad happen
exaggerated by 10, 15%. And they estimated that these exaggeration
cost industry about $24 billion, a year which is lots and lots of money.
I know we through lots of big numbers these days, but 24 billion is still a big
number. So we came up with all kinds of ideas.
We said, what if when people were waiting on hold, you would play religious music
for them? What would happen if you would put images
of eyes, as if they're being watched, on the form?
What if you got them to sign first? What if you got some declaration that had
to do something with religion as well? We had all kind of ideas about how you
increase, em, honesty. But you know, we had lots of good ideals
and they had lawyers and when you have good ideas and lawyers together in the
same room nothing ever happen. So after six months of trying very hard to
get this, nothing was done. But my contact in this insurance company
felt very bad for me. So he came to me and he gave me this form,
where you mail it to people and you ask them to report how many miles you drove
last year. Now imagine you got one of those form,
what would you want to shade the number, up or down?
If you shade it up, it would mean your premium would go up, if you shade it down
your premium will go down, so you'll probably want to shade it down.
They gave us 20,000 forms and we did one thing, we moved the signature line to the
top. Half the people got the signature on the
top first and half the people got it at the bottom.
Some people signed first, and then filled the mileage, some people fill the mileage
then sign. What did we see?
There was a difference of about 2400 miles on average.
The people who signed first reported driving 2400 miles more.
Now we don't know if they didn't cheat at all, but we know the cheating was much
reduced. And that actually gives me great hope that
we can create those small interventions and get them to work not just in the lab,
but get them in the field in all kinds of other versions like that.
Okay, so all that was about how we shrink the fudge factor.
How do we get people to, at the moment, tolerate less of their own immortality and
be more careful about what they're doing? The next question we wanted to ask, was
how do you get people to cheat more, how do you expand the fudge factor?
And of course, this is not an objective to increase cheating in society, but for the
purpose of understanding it, what kind of things would get people to cheat more and
nevertheless feel comfortable with themselves.
And the idea here also came from a little joke.
And the little joke is, that little Johnny comes home from school with a note from
the teacher that says that little Johnny stole a pencil from the kid who was
sitting next to him. And Johnny's father is furious and he
said, Johnny I'm humiliated and embarrassed and I'm angry.
And you're grounded for three weeks and just wait until your mother comes.
You never, never, never steal a pencil from the kid who is sitting next to you.
And beside Johnny if you need something, if you need a pencil you know very well
you can just say something. You can just ask and I will bring you
dozens of pencils from work. If you find this funny it's probably
because you realize that taking a pencil from work feels very differently than
taking 10 cents from petty cash box, even if you were going to use those 10 cents to
buy yourself a pencil. Perhaps the moment something becomes
multiple steps removed from money, there are more stories we can tell ourselves.
Right, you could say the workplace wants us to have these pencils, otherwise they
wouldn't put them there. Or you could say other people take them,
as well. Or you could say, even if I take them and
give them to my kids, they will leave me alone and that would allow me to answer
two more emails. Good for the workplace.
And all of those distance allow us to tell ourselves stories, allow us to rationalize
things that basically create this ability to cheat more, but nevertheless to feel
better about ourselves. So the first experiment we did on this, is
I walked around campus and I put six packs of Cokes, in some common refrigerators.
Now these were refrigerators that everybody had their own stuff, but
multiple people had their stuff in the same refrigerator.
And I basically wanted to see what is the half lifetime of Coke.
How long will it take for my Cokes to disappear?
And basically within 72 hours no Cokes were left there, everything was gone.
Now in contrast, I took a plate with six $1 bills, I put in the same refrigerators
and I waited. And now what happened, nobody touched a
single dollar. Now the students could have taken a
dollar, putting it in the nearby vending machine, get coke and change, but nobody
did. When something is directly about money, we
feel very differently about it. When something is removed from money, more
abstract, there are some stories we can tell ourselves, rationalizing and,
therefore, we can be more dishonest. Now this is not an ideal experiment,
because it's often the case that you open the refrigerator and you find Coke.
It's not so common that you open the refrigerator and find a plate with six $1
bills, so something must have been very strange.
So we did the same experiment, the same principle with the same matrix test and
here's the experiment. Some people got the sheet, solved it, came
to the experimenter, looked him in the eyes and said, Mister experimenter I
solved x problems, give me x dollars. So they looked him in the eyes and they
cheated for dollars. The second group did the same thing, but
when they came to the experiment, the guy looked him in the eyes, and they said, "Mr
Experimenter, I solved x problems; give me x tokens.
So they were lying not for money, they were lying for something that is tokens.
And we gave them tokens. They took 12 feet to the side; they walked
12 feet to the side, and they replaced these tokens for money.
Now they were lying for a pencil, but it was a pencil for only a few seconds.
It was one step removed from money, but for a very, very short duration.
What happened? Our participant doubled their cheating in
that condition. And by the way this is for me one of the
most worrisome experiments we've ever done.
Because if you think about it, we're moving to becoming a cashless society, as
consumers there's all these discussions about digital wallets.
On Wall Street there's of course all these complex financial tools that are becoming
more steps removed from money. People own more and more things like stock
options and things that are removed from money.
And if being close to money and observing it directly is what's keeping us
relatively honest, is it the case that in all kinds of domains of life, electronic
wallets, financial markets, the more this distance is increasing, the more we can
allow ourselves to both be dishonest and think of our self as hon-, as honest
people. And that really, really worries me.
So that was the first thing that got people to cheat more, distance from money.
The next thing we wondered, is we wondered what happened when you watched other
people cheat in an egregious way? After all we open the newspaper everyday
and we see all kinds of stories about big cheaters.
What is the affect of observing other people in society does to our own
morality? So we repeated this same experiment with
two changes. The first one was that we prepaid people,
everybody got an envelope with all the money as if they solved all the problems.
And we asked them at the end, to pay us back the money they didn't make and to
take only the money they deserve. That was the first change.
The second change was that we hired an acting student.
That acting student sat in the front seat in the, in the classroom.
And 30 seconds into the experiment, he raised his hand and said, excuse me, I
solved everything, what do I do now? Now imagine you were in that experiment.
You're solving, you're working very hard, you're still on problem number one, and
all of a sudden you see somebody who claimed that they've solved everything.
You know for sure, without cheating, there's no other way.
And the experimenter said, "You've solved everything?
You're free to go." And you see that person taking the envelope with all the
money and leaving the room. What would happen now to your own
morality? Lots and lots of moral people cheat.
Now there's two ways to interpret this result.
One is to say this is about cost/benefit analysis.
Before you saw that guy cheating in an egregious way, you thought to yourself, I
don't know what's the cost of cheating here.
Maybe they will catch me. Maybe somebody would run after me.
But after you saw a demonstration of somebody cheating in this egregious way
and nobody going after them, you say there's no cost here let me cheat.
The other possibility, is that it's not about the cost benefit analysis, but its
about what you call social proof. Its about giving people a demonstration
that people like them, from their society, from their community, students at the same
university are cheating in such circumstance.
And maybe because of that it is okay to cheat in those things, not from a moral
perspective, but from a social agreement persepctive this is the behavior.
Here is someone who has done it and is not even feeling sorry about that.
As an analogy you can think about what if everybody around you is downin-,
downloading illegal content, at some point, do you start saying, okay, this is
just, I guess what is okay to do. To separate those two things, we tried
these two explanations, we tried two things.
The first one, is that instead of the student cheating, we asked him to just
raise his hand and said excuse me, but with this set of instructions, can't I
just say I solved everything and take all the money and go home?
And the instructor said you know what? You can, it's up to you.
So now it was clear that from a cost benefit analysis you can cheat and get
away with it, but there was no example of somebody actually doing it.
What happened now when we did this? Cheating did not go up it actually went
down. We did another version of this and in the
other version we changed the outfit of this acting student.
We ran this experiment at Carnegie Mellon. All the students were Carnegie Mellon.
The acting student was a Carnegie Mellon student.
They were all from that group. In the second experiment, we ran this, eh,
version, but we dressed the acting student with University of Pittsburgh outfit.
Now, when they stood up and say, excuse me, I solved everything, and walked home
with all the money, you would still know that it's the same cost benefit analysis,
that now in this experiment you're not going to be punished, but there was no
social proof. It wasn't as if somebody from your social
group, from your friends, from your community is cheating this way, it's those
other people from this other university that we don't like so much.
It's those people who are immoral. What happened now?
Cheating did not go up, it went down. And basically I think that two things
happened. The first one, was that people were
reminded about morality and honesty by seeing an egregious act of misbehavior, a
little bit like the ten commandments version.
But it wasn't their group, it was what we called an out group, it was somebody else
behaving this way. And therefore they did not take it as a
signal that it's okay for them to do this as well.
So, so far we found two things that make people cheat more.
We found that the distance for money and we found the social acceptance, kind of
seeing other people behave in egregious way.
But we also wanted to find out what are personality traits, which are the people
that would cheat more? Now you could speculate a lot of things.
You can say maybe the people who are more egocentric or maybe the people who are
more competitive, maybe the people hate losing.
You can speculate on a lot of things, but if you think about our theory.
Our theory is that people want to view themselves as honest people and also want
to benefit from cheating. We want to have the cake and eat it too.
We want both of those things. Who are the people that could do that?
And what we thought was that maybe those are creative people.
Because if it's all about rationalization, if this kind of cheating we discover is
all about being able to cheat and rationalize it, so it doesn't affect our
own image, people who are more creative presumably can just tell better stories.
They can cheat more and rationalize it to an even higher degree, so we tried that.
We tried to measure people creativity and measure how much they cheat, and we found
that more creative people cheat more. We tried to increase creativity with some
creativity enhancing exercises. And we found that as we were increase
creativity slightly, we also got cheating to increase slightly.
We also went to a big advertising agency, and we checked the moral flexibility of
people in different jobs in that advertising agency.
And we saw that as the job required more creativity, people cheated more.
There was less cheating in accounting, accounting much more cheating in the
creative professions. And, you know, maybe it is good that
there's less cheating in accounting, but it clearly supports this theory that our
version of cheating, it's all about this rationalizing.
It's about acting badly and rationalizing, and the question is to what extent can we
do it. If we're multiple distance, multiple steps
removed from money, we can do it to a higher degree.
If people around us are doing it more, we can do it to a higher degree.
If we ourselves are better storytellers, more creative storytellers, we can do it
to a higher degree. All of those things are contributing to a
very high degree. So what have we learned up to this point?
I think if we think about the Becker model, that cheating is basically driven
by how much to I stand gain? What's the probability of being caught?
What kind of punishment will I get? And doing some cost benefit analysis.
That doesn't explain much of our behavior. It's also not the case that we have bad
apples. If you think about what is real cheating
due to? In Enron, and other cases, is it due to
bad apples, or is it due to lots and lots of people cheating a little bit?
I think it's much more due to lots and lots of people, cheating a little bit.
And specifically we learned a few things that either hinder it or increase it.
So we learned that getting people to think more carefully about their morality
shrinks the fudge factor and gets people to behave more honestly.
We also learned that it's all about rationalization.
So, when we have something that is multiple steps removed from money, we can
cheat more, and at the same time rationalize it.
When you see other people around us behaving in immoral ways, we can cheat a
bit more, and rationalizing it. And when we ourselves are creative, we can
rationalize, we can tell better stories, cheat more, and feel good about ourselves.
And I think that if we have this perspective, it means we should not direct
much of our attention to the cost-benefit analysis.
We should not think about something like, how do we expose people, and how do we
punish them, and how do we, eh, surveillance them?
Because all of those approaches are driven to this idea that people are just doing
the cost-benefit analysis. And if you say no, most of the cheating is
not about that, it's about what people can feel comfortable with themselves.
Now we have to ask with different approaches, how do we get people to be
comfortable with less cheating? How do we get people to become aware of
their own traps? How do we create rules that don't allow
this flexibility in terms of rationalization?
And I think this will be the actual Improvement.
You know, across all of our experiments, we ran about 30,000 people, we found about
12 people that cheated a lot, and we lost about $150 to these guys.
We found about 18,000 people who cheated just a little bit, and we lost about
$36,000 to those people. And I think that this is probably a good
reflection of what's happening in society. Sure, there are bad apples.
There are people who steal, and so on. And it's terrible.
But economically, it's a small potato, these are small things in terms of
economic impact. The big economic impact comes from lots of
people cheating a little bit, but because there are so many of them the economic
impact is much higher. And I don't think we need to stop thinking
about the crooks, but I think we need to pay more attention to the people who can
change just a little bit and feel good about themselves.
Now, I think if we do it, everybody would be better off.