The (Honest) Truth About Dishonesty

Here’s a quick summary:

THOSE RESULTS, THOUGH interesting, still don’t tell us why the participants in the Madoff condition were cheating more. Given David’s performance, participants could have made a quick calculation and said to themselves, “If he can cheat and get away with it, it must mean that I can do the same without any fear of getting caught.” If this were the case, David’s action would have changed participants’ cost-benefit analysis by clearly demonstrating that in this experiment, they could cheat and get away with it. (This is the SMORC perspective that we described in chapter 1, “Testing the Simple Model of Rational Crime.”)

A very different possibility is that David’s actions somehow signaled to the other participants in the room that this type of behavior was socially acceptable, or at least possible, among their peers. In many areas of life, we look to others to learn what behaviors are appropriate and inappropriate. Dishonesty may very well be one of the cases where the social norms that define acceptable behavior are not very clear, and the behavior of others—David, in this case—can shape our ideas about what’s right and wrong. From this perspective, the increased cheating we observed in the Madoff condition could be due not to a rational cost-benefit analysis, but rather to new information and mental revision of what is acceptable within the moral boundaries.

To examine which of the two possibilities better explains the increased cheating in the Madoff condition, we set up another experiment, with a different type of social-moral information. In the new setup, we wanted to see whether erasing any concern about being caught but without giving an enacted example of cheating would also cause participants to cheat more. We got David to work for us again, but this time he interjected a question as the experimenter was wrapping up the instructions. “Excuse me,” he said to the experimenter in a loud voice, “Given these instructions, can’t I just say I solved everything and walk away with all the cash? Is this okay?” After pausing for a few seconds, the experimenter answered, “You can do whatever you want.” For obvious reasons, we called this the question condition. Upon hearing this exchange, participants quickly understood that in this experiment they could cheat and get away with it. If you were a participant, would this understanding encourage you to cheat more? Would you conduct a quick cost-benefit analysis and figure that you could walk away with some unearned dough? After all, you heard the experimenter say, “Do whatever you want,” didn’t you?

Now let’s stop and consider how this version of the experiment can help us understand what happened in the Madoff condition. In the Madoff condition the participants were provided with a live example of cheating behavior, which provided them with two types of information: From a cost-benefit perspective, watching David walk out with all the money showed them that in this experiment there are no negative consequences to cheating. At the same time, David’s action provided them with a social cue that people just like them seem to be cheating in this experiment. Because the Madoff condition included both elements, we couldn’t tell if the increased cheating that followed was due to a reevaluation of the cost-benefit analysis, to the social cue, or to both.

This is where the question condition comes in handy. In this condition, only the first element (cost-benefit perspective) was present. When David asked the question and the experimenter confirmed that cheating was not only possible but also without a consequence, it became clear to the participants that cheating in this setup had no downside. And most important, the question condition changed the participants’ understanding of the consequence without giving them a live example and social cue of someone from their social group who cheated. If the amount of cheating in the question condition were the same as in the Madoff condition, we would conclude that what caused the increased level of cheating in both conditions was most likely the information that there was no consequence to cheating. On the other hand, if the amount of cheating in the question condition were much lower than in the Madoff condition, we would conclude that what caused the extra-high level of cheating in the Madoff condition was the social signal—the realization that people from the same social group find it acceptable to cheat in this situation.