Dan Ariely is the James B Duke Professor of Psychology and Behavioral Economics at Duke University. He is the founder of The Center for Advanced Hindsight and co-founder of BEworks, which helps business leaders apply scientific thinking to their marketing and operational challenges. His books include Predictably Irrational and The Upside of Irrationality, both of which became New York Times best-sellers. as well as The Honest Truth about Dishonesty and his latest, Irrationally Yours.
Ariely publishes widely in the leading scholarly journals in economics, psychology, and business. His work has been featured in a variety of media including The New York Times, Wall Street Journal, Washington Post, Boston Globe, Business 2.0, Scientific American, Science and CNN.
Quesiton: What is morality?
Dan Ariely: So there’s different ways to think about morality. There’s mortality what we hope to achieve, what people are actually doing, and what they’re actually thinking. And the morality that interests me is the morality that people are exhibiting. And so let me give an example. I’ll describe a couple of experiments we’ve done on cheating, and here’s the basic setup. We give people a set of simple math problems. There are 20 math problems and they get only five minutes. And in five minutes people can solve about four of those. One group solves them. They give them to us. We pay them four dollars on average, everybody goes home happy. The other group does the same thing, but when they finish we ask them to shred the piece of paper and tell us how many they solved. Now just because they shred the piece of paper, they don’t become smarter. But they say seven, so they cheat a little bit. Nobody says 20, but people increased their reporting from four to seven. A lot, a lot of people are cheating a little bit. Now what does it mean about morality? So in the economic framework, people should be sensitive to the probability of being caught cheating, and the amount of rewards. We don’t find any of this. When we changed the probability of being caught, nothing changes. When we change the amount of the reward..., nothing happens. Instead what we theorized is that people have a threshold. We all want to think of ourselves as honest people, and we can cheat a little bit. There’s like a fudge factor that we can cheat a little bit and still feel good about ourselves. So the idea that people cheat up to that level. Now if that’s the case, what should influence the level of cheating? We said this threshold should go down if people think carefully about honesty; and it should go up if the activity is less likely to reflect on their honesty. So here is what we did. We took one group of students and we said you have two experiments today. The first one is a memory experiment. And half of the people try to remember the Ten Commandments; half of the people tried to remember 10 books that they read in college . . . in high school. Then they went to another experiment in which they could cheat. Will the fact that some people try to remember the Ten Commandments influence how much they cheated? Absolutely. People stopped cheating. We didn’t detect any cheating after that. And by the way, almost nobody remembers all the Ten Commandments. And it doesn’t matter how many commandments they remember. The moment that they contemplated their own morality, they became more sensitive to deviations from their standards and stopped cheating. The most disturbing experiment we did was the following. One-third of the people handed in their sheet and got paid a dollar per question. A third shredded their sheets and told the experimenter, “Mr. Experimenter, I solved X problems. Give me X dollars,” and they cheated a little bit. The final third shredded their piece of the paper, came to the experimenter and said, “Mr. Experimenter, I solved X problems. Give me X tokens.” Then they took the tokens, they walked 12 feet to the side and exchanged the tokens for dollars. Now in a sense these are all the same conditions. Before I give you the results, think about the following. Would you take 10 cents from petty cash box? Don’t answer. And would you take a pencil from work home? Most people feel much better about the pencil than the 10 cents, and the question is why? And in some sense the token experiment is trying to explore that. In our experiment people doubled their cheating when it was about the token. What is happening here is that when you do something that is a step away from money, some of our moral shackles are released and we’re able to commit more crime and still feel good about ourselves. This is, by the way, why I think that ... stock options is so easy. It’s not money. It’s so many steps removed from money. It’s not money; it’s stocks. It’s not stocks; it’s stock options. It’s not cheating; it’s backdating, making it incredibly easy. Now from . . . Going back to your original question about morality, this is the kind of morality I am interested in. I’m interested in the morality that we shape . . . that our mind shapes for us. These are not ideas about what morality should be. It’s the morality that people experience and the conditions under which this morality plays a role – a bigger role, a smaller role and so on.
Recorded on: Feb 19 2008
The solution is from time to time to hire people you don’t think would work out.