Dan Ariely explains why we cheat and steal, and how we're generally wrong about this

On the occasion of the publication of a new book, behavioral economics writer Dan Ariely (a great favorite of mine) answers questions with Wired about the underlying causes of lying and cheating, and the huge gap between what the evidence tells us and what be intuitively believe.

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.

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


  1. I don’t doubt there’s some interesting and insightful stuff in the book, but the summary is a little odd. Talking to cheaters is not the way to find out if threat of punishment reduces their number. The question is how many decided against cheating due to the cost-benefit analysis.

    1. It’s a bit more complicated than that, and very insightful. I wholeheartedly recommend the book, I preordered it after enjoying ‘predictably irrational’ and haven’t been disappointed.

      It does quite succinctly explain why our current justice system simply doesn’t work.

      1. Why it doesn’t work? You can’t tell if a disincentive works merely by interviewing those for whom it didn’t work. It could certainly be valuable in finding approaches that would work for those people, however.

          1. Don’t bother if you’re just going to repeat that it’s complicated. I started this thread saying much the same thing. However, if you had anything substantive to say about the topic, that would be welcome.

          2. I don’t doubt there’s a lot of context there, and some of what he said is interesting. But the author flubbed the interview. If you’d wrote that yes, he was flawed in the interview, but the book is really well reasoned, I’d be more inclined to read it.

    2. Factbased…my exact thoughts after reading summary. When he interviews those who were dissuaded from cheating by the potential penalties, this will be worthwhile..unless he did and the summary was incompletely written.

      1. I’m sure it’s tough to find people willing to say they would have cheated but for the potential penalty. But we could still evaluate the differences in cheating rates before and after significant changes in rules or in enforcement. Or after high profile cases of cheaters being caught. Or between similar opportunities for cheating in different arenas with different rules.

      2. Dan completes whole studies (and pulls in supporting studies, as well as social and psychological theory), unsurprisingly the book goes into more detail than the two paragraph extract above :)

  2. Did you attend the preorder Webinar Cory? I really like seeing Dan discuss things, hes got a great delivery (his Ted talks are great too). Hadn’t realised my favourite behavioural economist was on BoingBoings radar!

  3. This guy is just another Gladwell wannabe pseudoscientist. He first came under my radar when he was slagging on dentists on NPR, claiming he had statistics from Delta Dental that he didn’t actually have. Delta Dental quickly denied that they had ever furnished him with any information. NPR ran a rather long piece to retract Ariely’s false statements. Ariely himself returned to NPR to admit that he had claimed the existence, on air, of data that he actually never had. The original story and the subsequent drama shall live forever in Google results if you care to seek it out.

    Is it ironic that he is now writing about lying and cheating? No, it is just fitting.

    1. He was wrong to lie, yes, BUT the statistics he lied about pointed to a conclusion he was still correct about.

      The more years you are a patient with one particular dentist the costlier their solutions will be. Ariely’s lie backed this up but so did the actual data.

      1.  OK. Do _you_ have data to back up Ariely’s lie? Or are you just echoing what he claimed without any data to back it up? I suspect the latter.

        1. Unless I am misreading NPR’s retraction it appears they, and Delta Dental were satisfied with Ariely’s claim that being a long term patient led to higher costs for individual treatments, the only piece they objected to (other than Delta objecting to Ariely dropping their name as the source of his 20 years worth of data) was the 50% “fact”.

  4. The premise (based on this synopsis, not having read the book) seems sound.  I doubt that many cheaters go straight from honest to major embezzling in one step, unless there’s some major opportunity to do so that lands in their lap. (Like the NZ person who had a bank error deposit a fortune in his account, which he withdrew and fled the country!)

    I worked at an office where a receptionist/secretary stole several thousand dollars over a couple of years.  It started out with just rounding up petty cash receipts to buy herself a small treat, then, when she got away with that, stealing larger and larger amounts.
    She KNEW she would eventually be caught, and that the risk of a criminal record or at least a really bad reference would blight her income chances in the future, to a far greater extent than the money she stole.

    But each step was a small one, and the cost of exposure remained the same whether she stopped now or stole more money, so why not go on?

  5.  I have not killed someone because I didn’t want to go to prison. Therefore, the number is not ‘exactly zero’.

    1. So, if there was absolutely no possibility what so ever that you would be caught, you would kill somebody? Well… it’s good then that you believe you may be caught, yes? 

      I see the same thought of reason when believers in some religion (ok… Christians mainly, for some reason) go on and on about that if one is an atheist, what keeps you from murdering someone (meaning, they have Big Daddy in the sky keeping an eye on them to keep them moral, so an atheist having none apparently can freely go on a murderous rampage). All I can say to them is… never lose faith!

      Dunno… I don’t need a Big Brother (either society or Sky Daddy) to not do what is wrong, and I would guess that’s the same for most as I would guess most grow up to not need a proxy for their parents. So I’m always baffled when I see people confess that only [insert watcher] is keeping them from doing [insert crime].

      1.  I am an atheist, and one of my closest friends is a rather religious Christian. We used to have philosophical discussions every so often about how to be a good person, etc., and I’ll never forget how amazed he was when I told him that, for me, it’s as simple as “do unto others.” He just couldn’t get his head around how I came to that way of thinking on my own. He’s also not able to grasp how a deep desire to be a good person is enough to make people treat others well.

        1. Assuming he’s not a strict fundamentalist / biblical literalist, ask him how he decides which parts of his religion and the bible to follow and which to discard. And how did he arrive at those moral convictions on his own?

          Most catholics disagree with their church on contraceptives. Most christians disagree with the bible on stoning and a long list of other things.

        2. Terrifying, isn’t it, that some religious folk rely so heavily on their religion to dictate their morals that they can’t imagine being a good person without a fairy tale to prop them up.

          I stress ‘some’ though, don’t want to tar everyone with the same brush, even if it might be more accurate to say ‘most’.

  6. The way to increase compliance with a law is not to increase the penalties. The way to increase compliance with a law is to more uniformly and strenuously enforce that law.

  7. What’s the alternative? Not imprison criminals? Even if prison is not a deterrent, criminals must be imprisoned at least to give society a break from their shenanigans.

    1. Deterrence is only one of the potential justifications for punishment.  Incapacitation is what you are alluding to: as long as some one is in the time out box, they aren’t robbing and stabbing, shooting and looting.  Rehabilitation is the third justification, though it seems to be bottom of the list in the US in terms of priorities.  The idea here is that through punishment the criminal reforms and goes from being a threat to society to being a productive member of it.  Lastly, there is retribution: punishing people because the evil they did deserves punishment, even if that punishment serves no other purpose (it deters no one, it doesn’t lead the person to reform, etc.).  The positive spin on this is that our society’s sense of justice requires virtue to be rewarded and vice punished.  The negative spin is that we’re just vindictive bastards when you get down to it and inflict needless suffering on people when the resources could be better spent on giving them a useful trade or crime prevention or whatever.

    2. Prison is reactionary. Reacting to things will never stop them (or even reduce them). [edit: probably over zealous, it will reduce some things, but is by no means the most effective method]

      There’s a very good Ted talk about exactly this topic, I’m too busy and important to go fish it out. But I recommend you go and have a quick look for it, was insightful.

  8. > “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…”

    Er, based strictly on precedent, what exactly is the real, objective, probability of being caught and spend any amount of time in prison if you do inside trading?

    Because I’d say it is incredibly close to zero… which, in my view, supports the thesis that that kind of dishonesty *is* actually driven by a cost-benefit analysis.

    I mean, the correlation is incredibly close to one, isn’t it?

    1. The point is (which can’t be disputed) that if the act of a crime was down to a cost-benefit analysis then we’d all be looking over our shoulders, unable to trust anyone, because as soon as they had an opportunity and the risk was mitigated they’d mug you for your wallet and rape your wife. If life actually worked like that, it wouldn’t be worth living – however that’s still the primary basis for our entire justice system.

  9. The reason we lie and cheat and steal is because of the flaws in money as a reward system.  Whenever you have an imperfect system that is designed to measure something, you will find people who will try to game the system by maximizing for the measurement instead of the thing measured.  This has given legions of people who care foremost about making money, and only after the fact about the things used to earn it.  Yet to an extent who can blame them, since without money we all starve?

  10. Ariely’s talk in Seattle was beautifully disguised as answers to audience questions about cheating, but seemed intended to provide descriptions of the interesting tests he ran to try to objectify dishonest behavior. With occasional jokes about adultery.

    They gave 30,000 people a math test, to make it as culturally universal as possible. (THEY DOCTORED A SHREDDER.) What was it… 12 people cheated a LOT and 18,000 cheated a little. Whether this might be a first quantification of blue collar versus white collar crime, was mentioned. These cheatin’ tests were run in many countries around the world, but the results percentages stayed the same. Ariely’s group tried various variables to find out what motivated or enabled honest people to cheat (since apparently we’re all honest and we all cheat). They found the enabling factor was rationalization. We also tend to cheat to help other people–we like working with others.

    An interesting effort was made to quantify who was more dishonest: Congressional aides in DC or bankers on Wall St. FWIW, the bankers cheated more. The Congressanimals were just aides, though, Ariely pointed out. I’d like to see more of this research.

    A useful finding from this book, or at least it seemed new to me in my Alzheimer’s, was that asking people to think about something “ethical” before carrying out an action reduced their cheating during that action. Even reminding them of an honor code they had never signed up for. Documents tend to have an affirmation of accuracy at the end–when you’ve already misrepresented the numbers! If you swore and affirmed accuracy as the preface, it would apparently be more effective. Ariely seemed to make use of this at the start of his talk when he announced he would be answering audience questions and there were extra points for good questions.

    Oh, has that man analyzed the motivations at play in an author’s signing line. I might prefer not to know what he knows about it. He is also very kind to the developmentally disabled and to children; it was a pleasure seeing him give advice to a young girl who was interested in economics! *sniff*

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