The (Honest) Truth About Dishonesty

To look at the distance between money and its influence on dishonesty in a more controlled way, we set up another version of the matrix experiment, this time including a condition where cheating was one step removed from money. As in our previous experiments, participants in the shredder condition had the opportunity to cheat by shredding their worksheets and lying about the number of matrices they’d solved correctly. When the participants finished the task, they shredded their worksheet, approached the experimenter, and said, “I solved X^* matrices, please give me X dollars.”

The innovation in this experiment was the “token” condition. The token condition was similar to the shredder condition, except that the participants were paid in plastic chips instead of dollars. In the token condition, once participants finished shredding their worksheets, they approached the experimenter and said, “I solved X matrices, please give me X tokens.” Once they received their chips, they walked twelve feet to a nearby table, where they handed in their tokens and received cold, hard cash.

As it turned out, those who lied for tokens that a few seconds later became money cheated by about twice as much as those who were lying directly for money. I have to confess that, although I had suspected that participants in the token condition would cheat more, I was surprised by the increase in cheating that came with being one small step removed from money. As it turns out, people are more apt to be dishonest in the presence of nonmonetary objects—such as pencils and tokens—than actual money.

From all the research I have done over the years, the idea that worries me the most is that the more cashless our society becomes, the more our moral compass slips. If being just one step removed from money can increase cheating to such a degree, just imagine what can happen as we become an increasingly cashless society. Could it be that stealing a credit card number is much less difficult from a moral perspective than stealing cash from someone’s wallet? Of course, digital money (such as a debit or credit card) has many advantages, but it might also separate us from the reality of our actions to some degree. If being one step removed from money liberates people from their moral shackles, what will happen as more and more banking is done online? What will happen to our personal and social morality as financial products become more obscure and less recognizably related to money (think, for example, about stock options, derivatives, and credit default swaps)?

Some Companies Already Know This!

As scientists, we took great care to carefully document, measure, and examine the influence of being one step removed from money. But I suspect that some companies intuitively understand this principle and use it to their advantage. Consider, for example, this letter that I received from a young consultant:

Dear Dr. Ariely,

I graduated a few years ago with a BA degree in Economics from a prestigious college and have been working at an economic consulting firm, which provides services to law firms.

The reason I decided to contact you is that I have been observing and participating in a very well documented phenomenon of overstating billable hours by economic consultants. To avoid sugar coating it, let’s call it cheating. From the most senior people all the way to the lowest analyst, the incentive structure for consultants encourages cheating: no one checks to see how much we bill for a given task; there are no clear guidelines as to what is acceptable; and if we have the lowest billability among fellow analysts, we are the most likely to get axed. These factors create the perfect environment for rampant cheating.