Dan Ariely, professor, author and behavioural economist, is someone I have found in recent months. His research is fresh and his insights interesting. He is the author of the best selling “Predictably Irrational” (buy now on Amazon.co.uk or Kalahari.net).
He is doing quite a lot of work at the moment on why people cheat, and what you can do to make sure they don’t.
I picked up a nice piece on him in the BusinessWeek – very interesting stuff:
Perhaps because of the cheating uncovered in the aftermath of the financial crisis—the lies told by everyone from mortgage lenders to Bernie Madoff—behavioral economist Dan Ariely has been getting a lot of calls about the nature of dishonesty. Ariely, a Duke University professor and author of the best-selling book Predictably Irrational, has spent years studying the topic.
Ariely says he’s not surprised that derivatives—whose values are based on other financial assets—have gotten a bad rap. He has found that people are more likely to cheat if they are a step removed from the cash payoff. In one experiment, he paid subjects (whom he allowed to report their own scores) for correctly solving math problems—some in cash, some in tokens to be redeemed across the room. The second group exaggerated their scores twice as much as the first. Similarly, in studies of real-life expense reports, he found managers pad expenses more when their assistants compile the report. Such detachment, Ariely says, may be what’s involved “when you backdate a stock option.”
His most recent experiment—on deception’s slippery slope—was inspired by some Prada swag he got after speaking at a conference last year. Carrying a genuine luxury bag made the fashion-challenged economist “feel different,” he says, leading him to wonder about the psychological effects of sporting a counterfeit.
In an experiment involving 500 people, he found that subjects who knowingly wore fake Chloé sunglasses later cheated more than twice as often on an unrelated task than those assigned to wear the authentic designer goods. “If you take that first step, your self-image changes,” he says. “It becomes easier to do the next dishonest thing.”
Ariely’s new obsession is how to prevent cheating. Consider the math task with the tokens. In one variation, testing participants first on their recall of the Ten Commandments eliminated cheating on the math scores. Then there’s the study Ariely did with an auto insurer: Car owners who signed their names at the top of the insurance application, he found, were more honest about their driving habits, even though higher annual mileage meant higher premiums.
“We all like to think of cheaters as evil people,” Ariely says. But deterrence can be as simple as reminding people of their better selves. His advice to the IRS for next tax season: Move the signature line to the top of the form.