Dan Ariely

When a certain former New York State Attorney General became New York Governor, he pledged to “change the ethics of Albany” and make “ethics and integrity the hallmarks of [his] administration.” Sure enough, he went on to fight collar crime and corruption, reduce pollution and prosecute a couple prostitution rings. Oh, but then the New York Times disclosed that this same law-and-order Governor was bedding high-priced prostitutes. So much for changing the ethics of Albany.

Power and moral hypocrisy are no strangers – we see it all the time. But why?

A few social scientists recently took a stab at finding an answer. Joris Lammers and Diederik A. Stapel (from Tilburg University) and Adam D. Galinsky (from Northwestern University) ran five experiments addressing how morality differs among the powerless and powerful.

They simulated a bureaucratic organization and randomly assigned participants to be in a high-power role (prime-minister) or low-power role (civil servant). The prime-minister could control and direct the civil servants. Next, the researchers presented all participants with a seemingly unrelated moral dilemma from among the following: failure to declare all wages on a tax form, violation of traffic rules, and possession of a stolen bike. In each case, participants used a 9-point scale (1: completely unacceptable, 9: fully acceptable) to rate the acceptability of the act. However, half of the participants rated how acceptable it would be if they themselves engaged in the act, while the other half rated how acceptable it would be others engaged in it.

The researchers found that compared to participants without power, powerful participants were stricter in judging others’ moral transgressions but more lenient in judging their own: “power increases hypocrisy, meaning that the powerful show a greater discrepancy between what they practice and what they preach.”

Joris and Adam hypothesized that this power-hypocrisy connection was due to the sense of entitlement that comes with positions of power. But what if you took away that entitlement by having participants view their power as illegitimate? In that case, the researchers posited, you would see the power-hypocrisy effect disappear.

To test their idea, they had 105 Dutch students write about an experience in which they were powerful or powerless. But half of the participants were asked to write about a time when they deserved their high or low power (it was legitimate), while the other half were asked to write about a time when they didn’t deserve their high or low power. They then had to rate the acceptability of the bike dilemma from above.

Results: when power (or lack thereof) was legitimate, the powerful also exhibited moral hypocrisy (being less moral themselves but judging others more harshly), while the powerless weren’t – just as before. But when power (or lack thereof) was illegitimate, the powerful didn’t show hypocrisy. In fact, the moral hypocrisy effect not only disappeared but was reversed, with the illegitimate powerful becoming stricter in judging their own behavior and more lenient in judging the others.

Irrationally Yours,

Dan

Question: what are God’s views on affirmative action, the death penalty and same-sex marriage? Answer: whatever you want them to be.

That’s according to a recent study by Nicholas Epley, Benjamin Converse, Alexa Delbosc, George Monteleone and John Cacioppo, found that we tend to ascribe our own views to God.

Past studies have shown that when we reason about other people, we form an opinion of their views based on two sources: egocentric info (i.e., what we ourselves believe) and outside clues (what the other person has said and done, and what others have said about them).

Here, the researchers wanted to find out how much we rely on egocentric info to construe other people’s views, including God’s. To that end, they had devout American participants provide their personal views on various issues (abortion, death penalty, Iraq war, etc.), as well as what they thought were the views of others (Katie Couric, George Bush, the average American, God, etc.).

When the researchers compared participants’ personal views with the participants’ estimates of others’ views, they found one significant pattern: there was a correlation between participants’ personal views and their estimates of God’s view. For example, participants who said they were for same-sex marriage tended to also say that God was for same-sex marriage. And participants who said they were against same-sex marriage tended to also say that God was against same-sex marriage.

But this wasn’t the case for the other figures – Couric, Bush, average American, and so forth. Participants who said they were for same-sex marriage were statistically neither more nor less likely to say that Couric was for same-sex marriage than those who held the opposite view. In other words, what I say Couric thinks has nothing to do with what I myself think. But what I say God thinks has lots to do with what I myself think.

But correlation doesn’t imply causation, so to shed light on the direction of causality, the researchers ran two follow-up experiments. This time, instead of just surveying participants for current views, they induced participants to change their personal views by randomly assigning them to give speeches for or against the issue (death penalty) in front of a camera. Because it was random assignment, some people ended up arguing for their personal view, while others argued against it (many past studies have shown that in this context, people tend to shift their own opinions in a direction consistent with the speech they delivered). So, what about the other views (God’s, Couric’s etc.) – would the participant revise those as well?

Yes and no. The only other view that changed was God’s. As participants’ own views changed, so did their estimates of God’s view. The participant who started out very much for the death penalty but took on a more moderate view after arguing against the death penalty on camera also ascribed a more moderate view to God. But his estimates of the others’ views remained unchanged.

Overall these results suggest that God is a blank slate onto which we project whatever we choose to. We join religious communities that argue for our viewpoint and we interpret religious readings to support our personal positions.

Irrationally Yours,

Dan

p.s and happy birthday to my little sister Tali

The New York Times Magazine publishes once a year the “years in ideas.”

This is the third year in a row that they are picking one of my papers, which is very nice of them.

It is also particularity nice of them that this year they picked two papers I am a part of.

One of the papers they picked this year is: The Counterfeit Self

Her is their report:
Wearing imitation designer clothing or accessories can fool others — but no matter how convincing the knockoff, you never, of course, fool yourself. It’s a small but undeniable act of duplicity. Which led a trio of researchers to suspect that wearing counterfeits might quietly take a psychological toll on the wearer.

To test their hunch, the psychologists Francesca Gino, Michael Norton and Dan Ariely asked two groups of young women to wear sunglasses taken from a box labeled either “authentic” or “counterfeit.” (In truth, all the eyewear was authentic, donated by a brand-name designer interested in curtailing counterfeiting.) Then the researchers put the participants in situations in which it was both easy and tempting to cheat.

In one situation, which was ostensibly part of a product evaluation, the women wore the shades while answering a set of very simple math problems — under heavy time pressure.

Afterward, given ample time to check their work, they reported how many problems they were able to answer correctly. They had been told they’d be paid for each answer they reported getting right, thus creating an incentive to inflate their scores. Unbeknown to the participants, the researchers knew each person’s actual score. Math performance was the same for the two groups — but whereas 30 percent of those in the “authentic” condition inflated their scores, a whopping 71 percent of the counterfeit-wearing participants did so.
Why did this happen? As Gino puts it, “When one feels like a fake, he or she is likely to behave like a fake.” It was notable that the participants were oblivious to this and other similar effects the researchers discovered: the psychological costs of cheap knockoffs are hidden. The study is currently in press at the journal Psychological Science.

Could other types of fakery also lead to ethical lapses? “It’s a fascinating research question,” says Gino, who studies organizational behavior at the University of North Carolina. “There are lots of situations on the job where we’re not true to ourselves, and we might not realize there might be unintended consequences.”

The second paper they picked this year is: The Drunken Ultimatum

Her is their report:

The so-called ultimatum game contains a world of psychological and economic mysteries. In a laboratory setting, one person is given an allotment of money (say, $100) and instructed to offer a second person a portion. If the second player says yes to the offer, both keep the cash. If the second player says no, both walk away with nothing.

The rational move in any single game is for the second person to take whatever is offered. (It’s more than he came in with.) But in fact, most people reject offers of less than 30 percent of the total, punishing offers they perceive as unfair. Why?

The academic debate boils down to two competing explanations. On one hand, players might be strategically suppressing their self-interest, turning down cash now in the hope that if there are future games, the “proposer” will make better offers. On the other hand, players might simply be lashing out in anger.

The researchers Carey Morewedge and Tamar Krishnamurti, of Carnegie Mellon University, and Dan Ariely, of Duke, recently tested the competing explanations — by exploring how drunken people played the game.

As described in a working paper now under peer review, Morewedge and Krishnamurti took a “data truck” to a strip of bars on the South Side of Pittsburgh (where participants were “often at a level of intoxication that is greater than is ethical to induce”) and also did controlled testing, in labs, of people randomly selected to get drunk.
The scholars were interested in drunkenness because intoxication, as other social-science experiments have shown, doesn’t fuzz up judgment so much as cause the drinker to overly focus on the most prominent cue in his environment. If the long-term-strategy hypothesis were true, drunken players would be more inclined to accept any amount of cash. (Money on the table generates more-visceral responses than long-term goals do.) If the anger/revenge theory were true, however, drunken players would become less likely to accept low offers: raw anger would trump money-lust.

In both setups, drunken players were less likely than their sober peers to accept offers of less than 50 percent of the total. The finding suggests, the authors said, that the principal impulse driving subjects was a wish for revenge.

Lets see if this trend continues….

Direct my steps by Your word, and let no iniquity have dominion over me.

Redeem me from the oppression of man, that I may keep Your precepts.

Make Your face shine upon Your servant, and teach me Your statutes.

Rivers of water run down from my eyes, because men do no keep Your law.

-Psalm 119: 133-136

If you remember from Predictably Irrational, at some point we carried out a cheating study that assessed the value of moral reminders. In the experiment, we asked participants to complete a test, told them they’d receive cash for every correct answer, and made sure they knew they had ample room to cheat. Now here’s the kicker: prior to starting, we had half the participants list ten books off their high-school reading list, and the other half recall the Ten Commandments, a manipulation that turned out to have a marked effect on the results: While many in the first group deceitfully reported a higher number of correct answers, no one in the second group cheated.

How do we explain the findings? A tempting conclusion to draw would be to equate the religious with a higher morality; however, this argument doesn’t hold, since in a follow-up study with atheist participants, the Ten Commandments had the exact same effect. Rather, what was at play here was the power of a moral reminder: Prime a person to think about ethics right before they have an opportunity to cheat, and they’ll avoid immoral behavior.

This experiment also suggests to me that religion can be a good source of ideas for social science research. If you think about religion as a social mechanism that has evolved over time, then you can ask what purpose its many rules serve and how they can help us to better understand human nature.

For example, though religious leaders may not have understood the exact psychology of moral reminders, they’ve certainly had enough of an intuitive sense of their importance to circulate the Ten Commandments and emphasize a whole score of other religious tenets, statutes, and regulations. Whether or not they could cite the causes for it, somewhere along the line they gathered that a good way to keep people in check was to present them with a moral benchmark to keep in mind.

Given religion’s role in society and the way it evolves over time, I think we could benefit from using its wisdom to direct social science research. The key is to zero in on a religious tenet and ask why it’s there and what it suggests about human behavior, and to then empirically test the hypothesis with the hopes of deriving science from religious texts.

God bless.

The first chapter of the Bernie Madoff fiasco has come to a close, with Madoff pleading guilty to 11 charges of fraud yesterday.

Madoff’s massive Ponzi scheme was horrific on many levels. But while we watch the next phase of the scandal, it’s important to ask: What lessons are we going to learn from this? I can see three lessons that relate to my work studying human irrationality — and in particular, some non-useful lessons we might learn.

One lesson that individuals and foundations are likely to take from the Madoff scandal is that in addition to diversifying their portfolio across several investments (stock, bonds, equity, cash), they also need to diversify their investments among several advisors. While the idea of diversifying among advisors has some merit — and it could reduce the exposure risk of another Madoff scandal — it will also make the task of managing portfolios much more difficult and much less efficient. Imagine that you have $1,000,000, split among four advisors. You will need a whole new level of coordination among them so they can have the right amount of cash, bonds, stocks etc., across all of your assets.

And I think that people will begin to over-diversify across investors. Why? Because when we have one large and salient instance in our minds, it can be so powerful that we overemphasize it. This same effect is very apparent in what we call “the identifiable victim effect,” and it is the reason that we overemphasize the risks of a shark attack, and underestimate the risks of riding a bike without a helmet. In general, what we find when there’s one single vivid event is that people overweight it — we focus on it too much. So that’s the first lesson: We’re going to learn from the Madoff scandal, but we are going to overdo it.

Another non-useful lesson that I think we will adopt is to start searching with more vigor for other bad apples. On one hand, it is clearly important to prevent more Madoffs, but at the same time I worry that as a consequence of searching for bad apples, we won’t pay enough attention to other financial behavior that might not be as badly wrong but that can actually have larger financial consequences.

In our research on dishonesty, we found that when we give people the opportunity to cheat, many of them cheat by a little bit, while very few cheat by a lot. In our experiments, we lost about $100 to the few people who cheated a lot — but lost thousands of dollars to the many people who each cheated by a bit. I suspect that this is a good reflection of cheating in the stock market, where the real financial cost of the egregious cheating by Madoff is actually a tiny fraction of all the “small” cheating carried out by “good” bankers.

The risk here is that if we pay too much attention to chasing bad apples, we might pay too little attention to the situations where the small dishonesties of many people can have large consequences (such as paying slightly higher salaries to cronies, making small changes to financial reports, doctoring documents, being slightly dishonest about mortgage terms), and in the process neglect the real economic source of the trouble we are in.

A third bad lesson that I think people will take from this concerns the way we define acceptable levels of cheating. In a study that may parallel Madoff’s egregious dishonesty, we again gave the participants the opportunity to cheat, while solving a puzzle quiz — but this time we hired an actor. This actor, posing as a fellow participant, stood up at the start of the session and declared that he had solved all the puzzles. Now the question is how his behavior would influence the other participants in the room — the ones who were watching him.

What we found is that when the actor wore a plain T-shirt, which made him part of the student group, cheating increased. On the other hand, when the actor wore a T-shirt of the rivaling university, cheating decreased. What this means is that when someone who is part of our own social group cheats, we find it more acceptable to cheat, but when people who are not part of our social group cheat, we want to distance ourselves from these people and cheat less.

Madoff was part of the financial elite — part of an in-group of our financial leaders. Think of all these people who were in his house, who knew him well. So now, when other people in this circle see him cheating, think about the long-term consequences: Would these other people in this financial industry now be more likely to take the immoral path? It doesn’t have to be another Ponzi scheme. It just means that, now that they have been exposed to this extreme level of dishonesty, they might adopt slightly lower moral scruples. Maybe they will start not letting their clients know exactly what they own and what they don’t own, or change a little bit the interest rate that they’re charging them … I don’t think that those in his circle will necessarily become more Madoff-like people, but I do suspect that they will get a substantial relief from their moral shackles. Sadly, that’s his legacy.

So, Chapter One of the Madoff scandal is over, but I worry that the negative downstream consequences of this experience are just starting …

An interesting story out of the BBC: one priest, Father Tim Jones, recently gave an incredibly provocative sermon where he offered controversial advice–to shoplift. His argument is basically that those who are less fortunate may often turn to illegal means: they can rob, they can become prostitutes, etc… Jones is arguing that of these “evils,” shoplifting, especially from large corporations, has the least impact on society, and thus, somehow, is the least immoral. Of course from a psychological standpoint this is our intuition. It is easy to do harm to large corporations because we think that we are spreading our damage out evenly among more individuals, and, moreover, those individuals are faceless people wearing suits. However, giving this more thought, we can also sense that if we were to allow this to happen as a society (or be more forgiving of poor people who steal from big corporations to get by), we could very quickly slip into a system of mutual distrust. Before you know it, we will all be having to have our bags checked at entrances and exits, with costs going up for everyone. On the whole, this might leave fewer people with jobs, and the cycle could continue to spiral out of control. As we know, many of the biggest financial blunders of the recent years had to do with tiny misjudgments that added up to larger and more catastrophic costs, with the resulting mutual distrust freezing credit and badly hurting the economy. One thing we must beware of is the allure of thinking that our tiny, seemingly inconsequential decisions won’t matter much in the long run. As history and research have shown us, it’s the little decisions that we gloss over that end up hurting us most in the end.