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Notes on video lecture:
Why People Cheat and Its Economic Impact
Notes taken by Edward Tanguay on October 13, 2015 (go to class or lectures)
Choose from these words to fill the blanks below:
rationalize, dishonest, whatsoever, Becker, signature, identify, cashless, encourage, thinking, exaggerate, honor, college, home, afterward, consequences, partially, tokens, everything, top, reminder, honest, creative, confusing, steal, dishonest, personality, benefit, down, front, concept, accounting, remembered, dollar, atheists, distanced, billion, cheating, deserved, invented, measurable, social, tempted, economic, agreement, verification, despite
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fudge factor
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due to our flexible cognitive ability, the fact that we can                        things very quickly, as long as we cheat just a little bit, we can both benefit from cheating, and we can still see ourselves as honorable people
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the moment we start creating a                    behavior, there is a range before it invokes a different concept of ourselves, and in that range, we can both be dishonest and think of ourselves as honest people
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people try to balance two forces
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1. feel that we are good, moral,              people
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2. benefit from                 
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the moment we start creating a dishonest behavior, there is a range before it invokes a different                of ourselves
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in that range, one can both be                    and think of oneself as an honest person
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experiment: How much will people cheat after trying to recall the Ten Commandments?
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answer: very little
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UCLA, asked 500 students
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interestingly, none of them could recall all 10 commandments and some of them                  new ones
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but after getting them to try to remember the ten commandments, they were given the same math task as before
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there was no correlation between people who                      more commandments to those who cheat less
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even those who were self-declared                  did not cheat after thinking about the ten commandments
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conclusion: just                  about morality shrinks our willingness to cheat and can make us more honest
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experiment: secular version of the above: how much will people cheat after being reminded of the            code?
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at MIT and Yale
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has no Honor Code
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added one sentence to beginning of test:
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"I understand that this test falls under the MIT/Yale Honor Code."
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required a                   
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result: no cheating                     
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               the fact the neither MIT nor Yale actually have an Honor Code
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there were actually no costs associated with cheating
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just the                  of some moral element of cheating decreased it so far that none could be detected
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at Princeton
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has Honor Code
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they give Freshmen a week long lesson on honesty
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crash course on morality
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two weeks after, we                students in same way
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when they did not sign the code, they cheated similarly to the Yale/MIT students
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when they did sign the code, they didn't cheat
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bad news
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a week-long course in morality doesn't seem to have any                      effects two weeks down the road
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morality training doesn't seem to be that effective
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good news
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reminding people about their own morality, whether it has                          or not
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take away
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rather than thinking about global, cultural changes, we should think about how we change things just before people are tempted in being dishonest
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ideas to improve IRS form
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some people signed an honor code before a test and after a test
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those who signed it before the test cheated less than those who signed it                   
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went to IRS and said that they should put the signature at the front
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the IRS responded that it would be illegal to do this since the signature on your IRS form is meant for                         , not for priming morality
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so they suggested to the IRS that they put a signature in the            and in the back each with a different purpose
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the IRS responded that this would be                   
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we then suggested that the first question ask if the person wants to donate $25 to a task force to fight corruption, as this would also prime people to think about ethics before doing their taxes
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insurance company
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said that the cheating they see was similar to these experiments
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that few people invent crimes that happened to them, but many people                      their claims, probably around 10-15%
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costs the industry around $24                per year
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ideas
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while people are on hold, play religious music for them
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put images of eyes, as if they are being watched, on the forms
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got them to sign first
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one forms that asked how much people drove each year, they moved the signature line to the       
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results indicated that cheating was reduced
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how do you get people to cheat more and still feel comfortable with themselves
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for the purpose of understanding it
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people will            pencils from work which cost 50 cents, but they won't steal 50 cents from work
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the further what we steal is                    from money, the more stories we can tell ourselves to rationalize our actions so that we can cheat more but nevertheless feel better about ourselves
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the workplace wants us to have these pencils, otherwise they wouldn't put them there
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other people take them as well
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I                    use them for work anyway
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coke experiment
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put six-packs of coke in refrigerators where people had common food
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wanted to see what the half-life of coke was
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on the average, within 72 hours, no cokes were left
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I put six one              bills on a plate in the refrigerator and nobody took them
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same experiment with tokens
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lying for tokens was done more often than lying for money
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but then they replaced these              for money
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this is one of the most worrisome experiments that I have ever done
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since we are moving to be a                  society
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digital wallets
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online shopping
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financial investment software
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stock options
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how to increase cheating
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increase distance from money
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if being close to money, being able to hold it and see it is keeping us honest, the more our distance to coins and bills increases, the more we can be dishonest and think of ourselves as honest
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provide examples of others cheating
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1. experiment, actor who cheats
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at the beginning, they got an envelope with all the money and they had to pay
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take only the money they                 
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hired an acting student, after 30 seconds, "I solved                     , what do I do now"
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others know that he had to have cheated
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teacher said, you are free to go, he took whole envelope
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results were: many more people cheated
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1. it's a cost/               analysis: at the beginning you don't know what the cost of cheating is
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2. social proof: a social                    perspective
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2. actor who asks about cheating
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switched it again: actor said, "can't I just say I solve everything and go         ", instrutor said, "yes you can, it's up to you"
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cheating actually when         
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3. actor with different outfit
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dressed acting student with clothes from another               
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others didn't                  with him
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cheating went down
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cheating based on                        type
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people in general want to view themselves as honest people yet benefit from cheating
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                 people
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you need to cheat and rationalize, i.e. they can tell better stories
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result: more creative people cheat more
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advertising agency
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less cheating in                     , and much more cheating in the creative professions
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cheating is all about rationalizing
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three things that make people cheat more:
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1. increase the distance from money
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2. social acceptance: seeing other people in your              group cheat
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3. creativity: the more creative and the better able to rationalize
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theories
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             model: cost/benefit analysis
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doesn't explain much of our behavior
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bad apple
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not so much due to one person cheating a lot but many people cheating a little bit
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cheating comes from people finding the fine line between feeling good about themselves and getting the benefits of cheating
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to                    less cheating
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find ways to allow people to feel comfortable with less cheating
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help people become aware of these traps
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create rules that don't allow this flexibility in rationalization
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results of experiments
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30,000 people tested
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we found about 12 people who cheated a lot, lost about $150 on them
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we found about 18,000 people who cheated a little bit and lost about $36,000 on them
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we learned that the                  impact from cheating comes much more from a large amount of people cheating a little and not from a few people cheating a lot

Spelling Corrections:

refridgerators ⇒ refrigerators

Ideas and Concepts:

On honesty in a cashless society via this afternoon's Irrational Behavior class: "One of the most worrisome psychological experiments I have conducted was one where students were encouraged to cheat on a test in that they were able to report by themselves how many questions they got right, and would immediately receive either (1) direct cash for each question, or (2) tokens for each question which they could then exchange for cash. Students who received tokens consistently cheated more than those who received cash, which indicated that the further our actions are removed from physical money, the more we have room to rationalize dishonest behavior. This is worrisome in that our society is gradually moving to be a cashless society where digital wallets, stock options, financial investment software, online shopping and smart phone payments are becoming the prevalent way to do commerce. If being close to physical money, being able to see it and touch it, is one thing that is keeping us honest, then the greater our distance to coins and bills, the easier it will be for us to be dishonest while still thinking of ourselves as honest."
The Simple Model of Dishonesty
Why People Cheat and Its Economic Impact
Conflicts of Interest
What Motivates Us to Do Work
The Value of Meaning in Work
How Effort Leads to Fondness of the End Result