Monday, February 1, 2016

The (Honest) Truth about Dishonesty

We know people lie and cheat sometimes, but can we predict when and why? Dan Ariely has researched this question and reports the results in his entertaining and enlightening book The (Honest) Truth about Dishonesty—How We Lie to Everyone—Especially Ourselves. This book is very accessible, yet gives deep insights into dishonesty.

The most important thing to understand about cheating is that it involves a tension between our self-image and the benefits of cheating. “We are all capable of cheating, and we are very adept at telling ourselves stories about why, in doing so, we are not dishonest or immoral.” “We cheat up to the level that allows us to retain our self-image as reasonably honest individuals.”

I would have thought that lying and cheating involved conscious evaluations of trade-offs at least some significant fraction of the time, but Ariely says this isn’t so. “There are rational forces that we think drive our dishonest behavior—but don’t. And there are irrational forces that we think don’t drive our dishonest behavior—but do.”

Ariely’s experiments show that “it is very difficult to alter our behavior so that we become more ethical.” A consequence is that he suspects “that this ineffectiveness also applies to much of the ethics training that takes place in businesses, universities, and business schools.”

In one amusing section, Ariely “studies” the link between his students writing exams and “Dead Grannies.” He finds “that grandmothers are ten times more likely to die before a midterm and nineteen times more likely to die before a final exam.”

Something I’ve noticed before is that my self-control is a limited resource, similar to my ability to focus on tasks, or my physical endurance. “Simple, everyday attempts to keep our impulses under control weaken our supply of self-control, thus making us more susceptible to temptation.” So, the chocolate bars and cupcakes constantly available to me at work are making my life worse, even if I never eat them.

The ability to lie to ourselves is an important component of our dishonest behaviour. “We are all very good at rationalizing our actions so that they are in line with our selfish motives.”

In one interesting experiment, women were asked which of four nightgowns they preferred. Most subjects picked the one on the far right and gave their reasons why it was best. The most interesting part of the experiment came when the subjects were told that the nightgowns were identical. They insisted this wasn’t true.

In another experiment, the researchers found that more creative people cheat more. “Creativity can help us tell better stories—stories that allow us to be even more dishonest but still think of ourselves as wonderfully honest people.” So, more creative people are more dishonest, but they would deny this fact.

There were a great many factors found to increase dishonesty, but two surprising factors that had no effect were the amount of money to be gained and the probability of getting caught. Factors that increased honesty included making a pledge, signatures, moral reminders, and supervision.

Overall, this book is a fairly easy read, but gives deep insights into the nature of lying and cheating. I highly recommend it to anyone who wishes to better understand the actions of others, and more importantly, to better understand yourself.


  1. As well, there are numerous studies revealing the abundant cheating/lying culture within the financial sector, moreso than other industries.

    I guess financial sector fraud has more to do with physical rewards, whereas personal dishonesty has more to do with perceived mental rewards.

  2. @SST: I'm not sure what drives people to lie and cheat beyond what I learned from this book. You may be right.

  3. Interesting to note that when an investor lies to himself, it usually results in a loss for the liar (e.g. not selling Nortel).

    When a financial "professional" lies to an investor, it usually results in a gain for the liar (e.g. Buy more Nortel now that it's down! = commission).

    The investor lies to preserve an established mental state (ego); the advisor lies to preserve an established physical state (bank account).

    But these days it's so much more than simple lying. With almost everything being monetised, there's a level of dishonesty in almost every facet of society.

    "Factors that increased honesty..." -- these would be good to incorporate into a personal finance/investment plan.

    If I had to do it all over, I'd be a brain scientist for sure. Or a Cosmonaut.