RSA ANIMATE: The Truth About Dishonesty

00:11:08
https://www.youtube.com/watch?v=XBmJay_qdNc

Summary

TLDRThe video delves into the psychology of dishonesty, highlighting how humans use rationalization to maintain a self-image of honesty while gaining from dishonest acts. Through cognitive flexibility, people can balance both dishonest actions and their view as moral individuals. This phenomenon is often shaped by one's ability to rationalize actions. Notably, the video discusses the disproportionate number of minor cheaters compared to major ones and their broader impact on society. Furthermore, the concept of psychological distance, influenced by cashless societies, is examined as a factor that alters perceptions of dishonesty, making actions like illegal downloads appear less culpable than skipping a meal bill at a restaurant. Moral reminders, such as attempting to recall the Ten Commandments, can significantly decrease dishonest behaviors, showing the power of self-supervision. The banking industry is spotlighted as an environment ripe for rationalized dishonesty due to its complexity and reward structures. The video concludes with the argument that systemic changes in incentives are needed to mitigate dishonest behavior effectively, rather than just replacing individuals.

Takeaways

  • 🪞 Human duality in wanting to be honest while benefitting from dishonesty.
  • 🔄 Rationalization bridges the gap between self-image and minor dishonesty.
  • 🔍 Society is impacted more by numerous small cheaters than a few big ones.
  • 💸 Psychological distance impacts perception of financial dishonesty.
  • 🎶 Illegal downloads rationalized more easily than direct theft.
  • 💡 Moral reminders reduce dishonest behavior significantly.
  • 🙏 Confession can help individuals start afresh and reduce cheating.
  • 📈 Banking incentives skew perceptions of financial products.
  • 🔄 'What the hell effect' explains escalation from minor to major dishonesty.
  • 🎯 Systemic incentive changes are crucial to curb dishonesty.
  • 🧑‍⚖️ Everyone is capable of dishonesty under the right circumstances.
  • 🤝 Society must find ways to make honesty both easier and more rewarding.

Timeline

  • 00:00:00 - 00:05:00

    Human beings have a paradoxical nature where they want to view themselves as honest while simultaneously benefiting from dishonesty. This is made possible by the flexibility of human cognitive psychology and the ability to rationalize actions. Most cheating occurs on a small scale, as highlighted by research involving 30,000 people, where only a few were big cheaters but many were small cheaters. This behavior reflects real society, where economic impact mainly comes from numerous people cheating a little rather than a few cheating a lot. The example of Johnny stealing a pencil illustrates how different forms of dishonesty feel less significant when psychologically removed from money, contributing to a wide acceptance of minor dishonest acts.

  • 00:05:00 - 00:11:08

    Instances like illegal downloading highlight how people rationalize dishonesty, believing they are not stealing but promoting freedom, which varies greatly from dining in restaurants where physically skipping out on a bill is much less rationalized. Attempts to reduce cheating involved moral reminders, significantly lowering dishonest acts as seen in experiments at UCLA where students, after recalling the Ten Commandments, did not cheat. Catholic confession shows similar effects, where post-confession decreases dishonesty. Furthermore, acknowledging 'what the hell effect', where minor cheating escalates to major cheating, highlights that people need a chance to start anew to prevent further dishonesty. Society, especially financial sectors, must address incentive structures contributing to dishonest actions, suggesting structural reform over replacing individuals would be more effective.

Mind Map

Video Q&A

  • How do people reconcile dishonesty with a positive self-image?

    People rationalize their dishonest actions, allowing them to perceive themselves as honest while engaging in mild dishonesty.

  • What is the "what the hell effect" mentioned in the video?

    The "what the hell effect" is when people, after being slightly dishonest, reach a point where they no longer feel good about themselves and subsequently indulge in dishonesty fully.

  • Does religious confession reduce dishonesty?

    Yes, both traditional and non-religious acts of confession and asking for forgiveness can reduce future acts of dishonesty by allowing people to "open a new page."

  • Why do people feel differently about stealing cash versus objects like pencils?

    People can rationalize taking objects like pencils more easily than cash, as there’s a psychological distance between the object and its monetary value.

  • How do cashless transactions affect our perception of dishonesty?

    Cashless transactions create a psychological distance between actions and consequences, making it easier for people to engage in dishonest acts without perceiving them as such.

  • What role do incentives play in dishonest behavior in the banking industry?

    Incentives in banking can distort individuals' perceptions of financial products, leading them to rationalize dishonest actions as beneficial or necessary.

  • What was the result of the UCLA experiment with the Ten Commandments?

    After trying to recall the Ten Commandments, participants did not engage in dishonest actions, suggesting that moral reminders can reduce dishonesty.

  • Why do illegal downloads happen frequently compared to dining without paying?

    Illegal downloads are easier to rationalize due to less direct human interaction and the perception of labels as evil, whereas dining has more immediate and visible consequences.

  • Can everyone be dishonest regardless of their prior morality?

    Yes, circumstances can lead even morally upright individuals to rationalize and engage in dishonesty given the right incentives or psychological environment.

  • How can reminders of values affect behavior?

    Being reminded of moral values, even those not personally held, can lead individuals to supervise their actions more closely and maintain honesty.

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Subtitles
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  • 00:00:13
    human beings basically try to do two
  • 00:00:15
    things at the same time on one hand we
  • 00:00:17
    want to be able to look in the mirror
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    and feel good about ourselves on the
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    other hand we want to benefit from being
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    dishonest now you could say you could do
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    one or the other you can either look at
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    yourself as honest or you could benefit
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    from dis honesty you can't do both Well
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    turns out that thanks to our flexible
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    cognitive psychology and thanks to our
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    ability to rationalize our actions we
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    could do both and as long as we
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    rationalize our actions and as long as
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    we cheat just a little bit we can
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    benefit from cheating just a little bit
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    and at the same time we can keep
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    thinking of ourselves as honest
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    wonderful people it's all about
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    rationalization if we can rationalize
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    things to a higher degree we will be
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    able to cheat more or be more dishonest
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    and think of ourselves as good people
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    and if we can rational less we would be
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    more honest and by the way it's not as
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    if we have a lot of big cheaters we have
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    a lot of little cheaters in this in this
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    book in this research we've basically
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    tested about 30,000 people and from
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    those 30,000 people we found 50 12 big
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    cheaters and those 12 big cheaters
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    together stole about $150 for me from
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    those 30,000 people we also had 18,000
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    little cheaters and they stole together
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    $36,000 from me and I would i' like to
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    argue that this kind of reflects what we
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    have in society sure there are some big
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    cheaters out there people who just go
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    all the way but there are very few of
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    them and in fact the magnitude of dis
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    honesty we most likely see in society is
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    by good people who think they're doing
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    good work but in fact cheating just a
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    little bit but because there are so many
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    of them of us this actually has a
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    tremendous economic impact there's a
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    little joke that Johnny comes home from
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    the from school with the little note
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    that says that Johnny stole a pencil
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    from the kidu sitting next to him and
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    Johnny's father is furious and he said
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    Johnny you never never never steal a
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    pencil from the kidu sitting next to you
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    this is unacceptable I can't believe you
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    do this you're grounded for two weeks
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    and besides Johnny you know very well
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    that if you need a pencil you could just
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    say something you could just mention it
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    and I can bring you dozens of pencils
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    from the
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    office now why is this slightly amusing
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    because I think we all recognize that if
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    we took 10 cents from a petty cash box
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    we could not help but think of oursel as
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    thieves but if we took a pencil we would
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    feel very differently in fact if we took
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    a 10 cents from a petty cash box and
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    went to buy a pencil we would still feel
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    like thieves but taking a pencil is kind
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    of removed from money because if you
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    think about it we're becoming a cashless
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    Society we're becoming a society with a
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    higher distance between us and the
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    consequences of our action credit cards
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    electron elic wallets mortgage back
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    Securities stock options think about all
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    of those things that represent
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    psychological distance between us and
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    the people us and money could it be that
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    as the distance increases people can be
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    dishonest but at the moment don't think
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    of themselves as doing anything
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    dishonest and I think the banking
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    industry is kind of prime to think about
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    things exactly in that way imagine you
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    manipulate something like I don't know
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    interest rates uh there are so many
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    layers on top of that and you don't see
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    who exactly you're affecting even though
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    you might affect the whole global
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    economy that it might be very easy for
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    people to take steps in that wrong
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    direction and still think of themselves
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    generally as not doing anything Terrible
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    by the way so so in the last year and a
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    half as I've been working on the on on
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    the book every time I go to a restaurant
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    I ask the waiter if there's a way to eat
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    in this restaurant and Escape without
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    payment I said look I'm not going to do
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    it but just tell me if you were giving
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    me advice how would you tell me to do it
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    and aside from one person they always
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    have great
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    suggestion and then I say and how often
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    does it happen and they say almost never
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    they said from time to time somebody
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    walks up without paying but they walk
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    slowly and we we stop them and they just
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    say they forgot almost never people just
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    walk without payment contrast that with
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    illegal downloads my book that came out
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    about a month ago in the first two days
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    was download 20,000 times from some
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    website it's kind of ironic a book on
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    cheating was
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    but if you talk to young people
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    virtually all of them have illegal music
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    on their computers and nobody feel bad
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    about it in fact one young guy recently
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    we talked about it he stood up he said
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    excuse me I don't think this is wrong he
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    said musicians want the music to be
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    heard that's what they wrote it for and
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    label companies are evil and he said
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    beside I was not going to buy this music
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    anyway so I'm not hurting anybody and
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    everybody is doing it right so this guy
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    in fact if you listen to him he was not
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    downloading illegal stuff he was
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    fighting for freedom
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    right he was he was promoting the world
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    making it a better place an amazing
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    level of russiz that you couldn't do in
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    a restaurant you can't go and say to
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    yourself oh you know what chefs really
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    want their food to be
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    eaten and it's really on by a
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    conglomerate that is really not that
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    good and I mean some things lend
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    themselves to a much higher degree to
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    rationalization some things are much
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    harder so we talked about what gets
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    people to cheat more what would get
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    people to cheat less what would get
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    rationalization to go down to kind of
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    scrutinize their own actions being
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    reminded of values yeah we've done we've
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    done that in a couple of ways and it's
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    really quite I think optimistic we went
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    to UCLA Los Angeles and we asked about
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    500 students to try and recall the Ten
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    Commandments but after trying to recall
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    the Ten Commandments when we gave them
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    the same opportunity to be dishonest
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    nobody was dishonest in fact even when
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    we take self declared atheist and we ask
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    them to swar in the Bible and we give
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    them a chance to cheat they don't cheat
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    so this suggest that there's something
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    about reminder
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    that the moment we think about morality
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    even if it's not our own moral code all
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    of a sudden we are kind of supervising
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    ourselves to a higher degree we're more
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    thoughtful about our own actions and as
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    a consequence we let ourselves get away
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    with less activities we also looked at
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    the Catholic confession we went to talk
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    to Catholic priests and we said from an
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    economic perspective we don't understand
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    confession please explain it to us he
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    said if you can confess and be absolved
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    shouldn't you cheat more shouldn't you
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    cheat on the way to
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    confession the priest said no so here
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    are three theories how confession might
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    work one theory is that you think to
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    yourself I want to Rob this convenience
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    store but I'll have to confess it will
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    be unpleasant the priest would think
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    badly of me and this added cost makes
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    the whole thing not worthwhile we don't
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    find any evidence for that another
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    possibility is like the Ten Commandments
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    experiment I told you about you come out
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    of confession and you feel good and
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    wonderful about yourself and for a
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    little while longer you want to keep
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    that feeling of being good we find some
  • 00:07:01
    evidence for this but the most
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    interesting version is the following
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    when we give people hundreds of
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    opportunities to steal and to cheat over
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    time what we find is that people are
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    slightly dishonest balancing feeling
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    good about myself cheating a little bit
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    feeling good cheating and then at some
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    point many people switch and start
  • 00:07:19
    cheating all the time and we call this
  • 00:07:21
    switching point the what the hell effect
  • 00:07:22
    it turns out we don't have to be 100%
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    good to think of ourself as good but if
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    at some point you don't think of
  • 00:07:28
    yourself as good you might as well enjoy
  • 00:07:31
    it and many people by the way report
  • 00:07:32
    this same thing with diets you start a
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    strict diet and then you violate your
  • 00:07:36
    diet and you say ah today I'm not
  • 00:07:38
    dieting I might as well have a burger
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    and some fries I'll start tomorrow next
  • 00:07:42
    Monday or next month now if people cheat
  • 00:07:44
    a lot all the time why would they ever
  • 00:07:46
    stop why would you ever stop if you
  • 00:07:47
    think you're going to hell in the in the
  • 00:07:48
    Catholic version why would you ever stop
  • 00:07:51
    the Catholic confession might have
  • 00:07:52
    actually stumbled on this which this is
  • 00:07:54
    might be a really good idea that if you
  • 00:07:56
    are cheating a lot maybe you need to be
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    able to open a new page so we did these
  • 00:08:00
    experiments we do a non-catholic kind of
  • 00:08:02
    confession people cheat a little bit
  • 00:08:04
    they cheat a lot we give them a chance
  • 00:08:05
    to say what they have done badly we give
  • 00:08:07
    them a chance to ask for forgiveness
  • 00:08:09
    from whatever Spirits they're beli in
  • 00:08:12
    what happens after those two actions
  • 00:08:13
    together cheating goes down opening a
  • 00:08:16
    new page does seem to be very successful
  • 00:08:19
    this by the way I think is something
  • 00:08:20
    that religion figured out and the
  • 00:08:22
    question is how do we put it into Civic
  • 00:08:24
    Society should we create opportunities
  • 00:08:26
    for Bankers for example H to ask for
  • 00:08:28
    forgiveness from time to time and start
  • 00:08:31
    and start a new page people would
  • 00:08:33
    transgress there's nothing that we can
  • 00:08:35
    do about it how do we get people to feel
  • 00:08:37
    clean again and able to act on their
  • 00:08:39
    goodness let me let me just summarize
  • 00:08:42
    with the following if you think about it
  • 00:08:45
    this is really the whole thing is a
  • 00:08:47
    question of conflicts of interest and
  • 00:08:50
    conflicts of interest mean that we have
  • 00:08:51
    a pool to see reality in a certain way
  • 00:08:54
    and we could justify our view imagine
  • 00:08:57
    that you like a particular football
  • 00:08:59
    soccer team and you go to a game and the
  • 00:09:02
    referee calls a call against your team
  • 00:09:04
    is there any way but for you to think
  • 00:09:06
    the referee is evil vicious stupid blind
  • 00:09:08
    something like that of course not you
  • 00:09:11
    can't help but having your motivation
  • 00:09:14
    influence how you see reality now
  • 00:09:16
    replace your team with $5 million or
  • 00:09:19
    with something else and you could see
  • 00:09:21
    how the same forces would get you to see
  • 00:09:22
    reality in a biased way so imagine you
  • 00:09:25
    were a banker and imagine that I paid
  • 00:09:28
    you $5 million a year to view mortgage
  • 00:09:30
    back security as a good product could
  • 00:09:32
    you help but seeing them as better than
  • 00:09:34
    they are now I'm not saying that you
  • 00:09:36
    will shift your opinion from thinking
  • 00:09:38
    that are terrible to thinking that are
  • 00:09:39
    wonderful but you will probably shift
  • 00:09:41
    your understanding of them and what if
  • 00:09:44
    everybody around around you thought that
  • 00:09:46
    they were great as well and what if they
  • 00:09:48
    were difficult to compute and you were
  • 00:09:50
    sitting there with a big spreadsheet and
  • 00:09:52
    you would different calculations and
  • 00:09:54
    parameters and estimators and in the
  • 00:09:56
    bottom you would see their final value
  • 00:09:58
    but it would also reflect on your end of
  • 00:09:59
    year bonus wouldn't you shade your
  • 00:10:02
    evaluation even further and this is
  • 00:10:04
    actually quite important because if you
  • 00:10:06
    think about the whole financial crisis
  • 00:10:08
    we've taken people and we put them in
  • 00:10:10
    situations which basically are
  • 00:10:12
    guaranteed to blind or at least to
  • 00:10:14
    distort their vision and we expect
  • 00:10:17
    people to overcome that you know we all
  • 00:10:19
    have a tendency to think of people as
  • 00:10:21
    good or bad and we say as long as we
  • 00:10:23
    kick the bad people everything would be
  • 00:10:25
    fine but the reality is that we all have
  • 00:10:28
    the capacity to be quite bad under the
  • 00:10:31
    right circumstances and I think in
  • 00:10:33
    banking we've created the right
  • 00:10:35
    circumstances for everybody to misbehave
  • 00:10:38
    and because of that it's not such a
  • 00:10:41
    matter of kicking some people and
  • 00:10:42
    getting new people in it's about
  • 00:10:44
    changing the incentive structure that
  • 00:10:46
    because unless we change that we're not
  • 00:10:48
    going to get
  • 00:10:58
    forward e
Tags
  • rationalization
  • cognitive psychology
  • honesty
  • dishonesty
  • economic impact
  • moral reminders
  • banking industry
  • psychological distance
  • incentive structures
  • cheating