The (Honest) Truth About Dishonesty

ME: By the time taxpayers finish entering all the data onto the form, it is too late. The cheating is done and over with, and no one will say, “Oh, I need to sign this thing, let me go back and give honest answers.” You see? If people sign before they enter any data onto the form, they cheat less. What you need is a signature at the top of the form, and this will remind everyone that they are supposed to be telling the truth.

IRS: Yes, that’s interesting. But it would be illegal to ask people to sign at the top of the form. The signature needs to verify the accuracy of the information provided.

ME: How about asking people to sign twice? Once at the top and once at the bottom? That way, the top signature will act as a pledge—reminding people of their patriotism, moral fiber, mother, the flag, homemade apple pie—and the signature at the bottom would be for verification.

IRS: Well, that would be confusing.

ME: Have you looked at the tax code or the tax forms recently?

IRS: [No reaction.]

ME: How about this? What if the first item on the tax form asked if the taxpayer would like to donate twenty-five dollars to a task force to fight corruption? Regardless of the particular answer, the question will force people to contemplate their standing on honesty and its importance for society! And if the taxpayer donates money to this task force, they not only state an opinion, but they also put some money behind their decision, and now they might be even more likely to follow their own example.

IRS: [Stony silence.]

ME: This approach may have another interesting benefit: You could flag the taxpayers who decide not to donate to the task force and audit them!

IRS: Do you really want to talk about audits?^*

Despite the reaction from the IRS, we were not entirely discouraged, and continued to look for other opportunities to test our “sign first” idea. We were finally (moderately) successful when we approached a large insurance company. The company confirmed our already substantiated theory that most people cheat, but only by a little bit. They told us that they suspect that very few people cheat flagrantly (committing arson, faking a robbery, and so on) but that many people who undergo a loss of property seem comfortable exaggerating their loss by 10 to 15 percent. A 32-inch television becomes 40 inches, an 18k necklace becomes 22k, and so on.

I went to their headquarters and got to spend the day with the top folks at this company, trying to come up with ways to decrease dishonest reporting on insurance claims. We came up with lots of ideas. For instance, what if people had to declare their losses in highly concrete terms and provide more specific details (where and when they bought the items) in order to allow less moral flexibility? Or if a couple lost their house in a flood, what if they had to agree on what was lost (although as we will see in chapter 8, “Cheating as an Infection,” and chapter 9, “Collaborative Cheating,” this particular idea might backfire). What if we played religious music when people were on hold? And of course, what if people had to sign at the top of the claim form or even next to each reported item?

As is the way with such large companies, the people I met with took the ideas to their lawyers. We waited six months and then finally heard from the lawyers—who said that they were not willing to let us try any of these approaches.

A few days later, my contact person at the insurance company called me and apologized for not being able to try any of our ideas. He also told me that there was one relatively unimportant automobile insurance form that we could use for an experiment. The form asked people to record their current odometer reading so that the insurance company could calculate how many miles they had driven the previous year. Naturally, people who want their premium to be lower (I can think of many) might be tempted to lie and underreport the actual number of miles they drove.

The insurance company gave us twenty thousand forms, and we used them to test our sign-at-the-top versus the sign-at-the-bottom idea. We kept half of the forms with the “I promise that the information I am providing is true” statement and signature line on the bottom of the page. For the other half, we moved the statement and signature line to the top. In all other respects, the two forms were identical. We mailed the forms to twenty thousand customers and waited a while, and when we got the forms back we were ready to compare the amount of driving reported on the two types of forms. What did we find?