The (Honest) Truth About Dishonesty

I suspect that in terms of my financial losses to the aggressive and to the small cheaters, our experiments are indicative of dishonesty in society at large. Very few people steal to a maximal degree. But many good people cheat just a little here and there by rounding up their billable hours, claiming higher losses on their insurance claims, recommending unnecessary treatments, and so on. Companies also find many ways to cheat a little bit. Think about credit card companies that raise interest rates ever so slightly for no apparent reason and invent all kinds of hidden fees and penalties (which are often referred to, within companies, as “revenue enhancements”). Think about banks that slow down check processing so that they can hold on to our money for an extra day or two or charge exorbitant fees for overdraft protection and for using ATMs. All of this means that although it is obviously important to pay attention to flagrant misbehaviors, it is probably even more important to discourage the small and more ubiquitous forms of dishonesty—the misbehaviors that affect all of us most of the time—both as perpetrators and as victims.

A Word About Cultural Differences

I travel a lot, which means that I get to meet people from all over the world, and when I do, I often ask them about honesty and morality in their countries. As a result, I’m beginning to understand how cultural differences—whether regional, national, or corporate—contribute to dishonesty.

If you grew up outside the United States, think about this for a minute: do people from your home country cheat more or less than Americans do? After asking many people from various countries this question, I’ve discovered that people have very strong beliefs about cheating in their own countries, and most believe that people in their home country cheat more than Americans do (with the somewhat predictable exception of people from Canada and the Nordic countries).

Understanding that these are only subjective impressions, I was curious to see whether there really was something to them. So I decided to test some of these cultural perceptions more directly. In order to explore cultural differences, we first had to come up with a way to equate the financial incentives across the various locations. If we always paid, for example, an amount equivalent to $1 for a correctly solved question, this would range from being a very high payment in some places to a rather low one in others. Our first idea of how to equate the size of the incentives was to use a product that would be internationally recognized, such as a McDonald’s hamburger. Following this approach, for each matrix solved correctly, participants could receive one-quarter of the cost of a McDonald’s hamburger in that location. (This approach assumed that the people setting prices at McDonald’s understand the economic buying power in each location and set their prices accordingly.)

In the end we decided on a related approach and used the “beer index.” We set up shop in local bars and paid participants one-quarter of the cost of a pint of beer for every matrix that they claimed to have solved. (To make sure that our participants were sober, we only approached bargoers as they were entering the bar.)

BECAUSE I GREW up in Israel, I especially wanted to see how Israelis measured up (I admit that I suspected that Israelis would cheat more than Americans). But as it turned out, our Israeli participants cheated in the matrix experiments just as much as the Americans. We decided to check other nationalities, too. Shirley Wang, one of my Chinese collaborators, was convinced that Chinese people would cheat more than Americans. But again, the Chinese showed the same levels of dishonesty. Francesca Gino, from Italy, was positive that Italians would cheat the most. “Come to Italy, and we will show you what cheating is all about,” she said in her fantastic accent. But she was proven wrong too. We discovered the same results in Turkey, Canada, and England. In fact, the amount of cheating seems to be equal in every country—at least in those we’ve tested so far.

How can we reconcile the fact that our experiments don’t show any real differences in dishonesty among various countries and cultures with the very strong personal conviction that people from different countries cheat to different degrees? And how can we reconcile the lack of differences we see in our results with the clear differences in corruption levels among countries, cultures, and continents? I think that both perspectives are correct. Our data reflect an important and real aspect of cheating, but so do cultural differences. Here’s why.