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in what ways do people lie and cheat yet still think of themselves as good people?

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often we have a very simple model of dishonesty: what do we stand to gain and what do we stand to lose

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this is not actually a good model, many other aspects are driving us to be honest and dishonesty

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we often lie or cheat yet don't think of ourselves as being immoral, this is a commonly shared dilemma that we all have

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what was the cause of the collapse of Enron?

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where their three bad apples that planned and executed its creatively planned accounting fraud?

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or was it more the case that many or most of the people at Enron were just turning a blind eye to what was going on and benefitting them at the same time, a kind of wishful blindness

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which is dishonesty caused by:

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a few bad apples

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then we need to improve our Human Resource policies

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don't hire bad apples

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be able to fire bad apples

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many people cheating just a little bit

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then you have to think of the fabric of how people's actions influence each other

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what do we know about cheating and how do we measure it?

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experiment

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give each person a matrix math test, find numbers that had to 10, and check when you have found it

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we'll pay you a dollar a question

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go to the back of the room, shred the paper

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then come to the front and I will pay you accordingly

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people on average say they solved six

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shredder actually only shreds the sides of the page

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on average we find that people solve 4 problems, but report that they solved 6

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there were not just a few that cheat but many

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we found very few people who cheat in an egregious way, and find many people who cheat just a little bit

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the economic rationality

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Gary Becker

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looking for place for car

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about to be late for meeting

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performs a cost/benefit

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risk of being caught vs. benefit

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says all moral issues are like this

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Beckers's economic formula for cheating

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1. what do you stand to gain

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2. what is the chance you'll get caught

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3. what is the punishment

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results of experiments on these three points

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1. changed amount that people got per questions

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you would expect that the more money at stake, the more cheating there would be, but it was independent

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2. shredded only the half the page, whole page, and whole page + pay themselves

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we found that lots of people cheated just by a little bit

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even if they were told the average number of questions was 4 and 8