An All Things Considered segment (MP3) with Chana Joffe-Walt and Alix Spiegel looks at the circumstances that lead to people cheating and committing other frauds. They frame it with the true story of Toby Groves, whose brother had been convicted of fraud, and whose father made him swear a solemn oath to be upstanding in his business dealings. However, Groves found himself committing fraud later, and brought several of his employees in on it.
Typically when we hear about large frauds, we assume the perpetrators were driven by financial incentives. But psychologists and economists say financial incentives don't fully explain it. They're interested in another possible explanation: Human beings commit fraud because human beings like each other.
We like to help each other, especially people we identify with. And when we are helping people, we really don't see what we are doing as unethical.
Lamar Pierce, an associate professor at Washington University in St. Louis, points to the case of emissions testers. Emissions testers are supposed to test whether or not your car is too polluting to stay on the road. If it is, they're supposed to fail you. But in many cases, emissions testers lie.
"Somewhere between 20 percent and 50 percent of cars that should fail are passed — are illicitly passed," Pierce says.
Financial incentives can explain some of that cheating. But Pierce and psychologist Francesca Gino of Harvard Business School say that doesn't fully capture it.
Psychology Of Fraud: Why Good People Do Bad Things
Rogue archivist Carl Malamud writes, “From May 11, 1947 until January 29, 1948, Gandhi gave a speech after prayer meetings 129 times. It was a narrative of his life and of the times. All India Radio broadcast his talks to the nation, and everybody stopped to hear what the Mahatma had to say. On January […]
Nicholas Shaxon, author of Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens (previously) appeared on The Foreign Desk podcast (MP3) this week to discuss the nature of tax havens, how they hollow out both their host countries and the countries whence their hidden riches comes.
Rick Kleffel sends us his latest podcast (MP3), “A conversation with one of the authors of a wonderful and strange book; science-fiction thought experiments (‘robot versus baby’) informed by social psychology experiments of fascinating design, part ethics, philosophy, neuroscience, the minds of god and the dead and machines… authentically mind-boggling. And Fun!”
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