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Notes on video lecture:
Why People Cheat and Its Economic Impact
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cheating, signature, benefit, remembered, partially, creative, home, cashless, down, encourage, social, verification, identify, afterward, whatsoever, personality, dishonest, reminder, top, thinking, invented, accounting, concept, honest, despite, dishonest, Becker, steal, honor, billion, measurable, distanced, college, front, tokens, atheists, deserved, confusing, rationalize, consequences, agreement, tempted, exaggerate, dollar, economic, everything
fudge factor
due to our flexible cognitive ability, the fact that we can                        things very quickly, as long as we cheat just a little bit, we can both benefit from cheating, and we can still see ourselves as honorable people
the moment we start creating a                    behavior, there is a range before it invokes a different concept of ourselves, and in that range, we can both be dishonest and think of ourselves as honest people
people try to balance two forces
1. feel that we are good, moral,              people
2. benefit from                 
the moment we start creating a dishonest behavior, there is a range before it invokes a different                of ourselves
in that range, one can both be                    and think of oneself as an honest person
experiment: How much will people cheat after trying to recall the Ten Commandments?
answer: very little
UCLA, asked 500 students
interestingly, none of them could recall all 10 commandments and some of them                  new ones
but after getting them to try to remember the ten commandments, they were given the same math task as before
there was no correlation between people who                      more commandments to those who cheat less
even those who were self-declared                  did not cheat after thinking about the ten commandments
conclusion: just                  about morality shrinks our willingness to cheat and can make us more honest
experiment: secular version of the above: how much will people cheat after being reminded of the            code?
at MIT and Yale
has no Honor Code
added one sentence to beginning of test:
"I understand that this test falls under the MIT/Yale Honor Code."
required a                   
result: no cheating                     
               the fact the neither MIT nor Yale actually have an Honor Code
there were actually no costs associated with cheating
just the                  of some moral element of cheating decreased it so far that none could be detected
at Princeton
has Honor Code
they give Freshmen a week long lesson on honesty
crash course on morality
two weeks after, we                students in same way
when they did not sign the code, they cheated similarly to the Yale/MIT students
when they did sign the code, they didn't cheat
bad news
a week-long course in morality doesn't seem to have any                      effects two weeks down the road
morality training doesn't seem to be that effective
good news
reminding people about their own morality, whether it has                          or not
take away
rather than thinking about global, cultural changes, we should think about how we change things just before people are tempted in being dishonest
ideas to improve IRS form
some people signed an honor code before a test and after a test
those who signed it before the test cheated less than those who signed it                   
went to IRS and said that they should put the signature at the front
the IRS responded that it would be illegal to do this since the signature on your IRS form is meant for                         , not for priming morality
so they suggested to the IRS that they put a signature in the            and in the back each with a different purpose
the IRS responded that this would be                   
we then suggested that the first question ask if the person wants to donate $25 to a task force to fight corruption, as this would also prime people to think about ethics before doing their taxes
insurance company
said that the cheating they see was similar to these experiments
that few people invent crimes that happened to them, but many people                      their claims, probably around 10-15%
costs the industry around $24                per year
while people are on hold, play religious music for them
put images of eyes, as if they are being watched, on the forms
got them to sign first
one forms that asked how much people drove each year, they moved the signature line to the       
results indicated that cheating was reduced
how do you get people to cheat more and still feel comfortable with themselves
for the purpose of understanding it
people will            pencils from work which cost 50 cents, but they won't steal 50 cents from work
the further what we steal is                    from money, the more stories we can tell ourselves to rationalize our actions so that we can cheat more but nevertheless feel better about ourselves
the workplace wants us to have these pencils, otherwise they wouldn't put them there
other people take them as well
I                    use them for work anyway
coke experiment
put six-packs of coke in refrigerators where people had common food
wanted to see what the half-life of coke was
on the average, within 72 hours, no cokes were left
I put six one              bills on a plate in the refrigerator and nobody took them
same experiment with tokens
lying for tokens was done more often than lying for money
but then they replaced these              for money
this is one of the most worrisome experiments that I have ever done
since we are moving to be a                  society
digital wallets
online shopping
financial investment software
stock options
how to increase cheating
increase distance from money
if being close to money, being able to hold it and see it is keeping us honest, the more our distance to coins and bills increases, the more we can be dishonest and think of ourselves as honest
provide examples of others cheating
1. experiment, actor who cheats
at the beginning, they got an envelope with all the money and they had to pay
take only the money they                 
hired an acting student, after 30 seconds, "I solved                     , what do I do now"
others know that he had to have cheated
teacher said, you are free to go, he took whole envelope
results were: many more people cheated
1. it's a cost/               analysis: at the beginning you don't know what the cost of cheating is
2. social proof: a social                    perspective
2. actor who asks about cheating
switched it again: actor said, "can't I just say I solve everything and go         ", instrutor said, "yes you can, it's up to you"
cheating actually when         
3. actor with different outfit
dressed acting student with clothes from another               
others didn't                  with him
cheating went down
cheating based on                        type
people in general want to view themselves as honest people yet benefit from cheating
you need to cheat and rationalize, i.e. they can tell better stories
result: more creative people cheat more
advertising agency
less cheating in                     , and much more cheating in the creative professions
cheating is all about rationalizing
three things that make people cheat more:
1. increase the distance from money
2. social acceptance: seeing other people in your              group cheat
3. creativity: the more creative and the better able to rationalize
             model: cost/benefit analysis
doesn't explain much of our behavior
bad apple
not so much due to one person cheating a lot but many people cheating a little bit
cheating comes from people finding the fine line between feeling good about themselves and getting the benefits of cheating
to                    less cheating
find ways to allow people to feel comfortable with less cheating
help people become aware of these traps
create rules that don't allow this flexibility in rationalization
results of experiments
30,000 people tested
we found about 12 people who cheated a lot, lost about $150 on them
we found about 18,000 people who cheated a little bit and lost about $36,000 on them
we learned that the                  impact from cheating comes much more from a large amount of people cheating a little and not from a few people cheating a lot

Spelling Corrections:


Ideas and Concepts:

On honesty in a cashless society via this afternoon's Irrational Behavior class: "One of the most worrisome psychological experiments I have conducted was one where students were encouraged to cheat on a test in that they were able to report by themselves how many questions they got right, and would immediately receive either (1) direct cash for each question, or (2) tokens for each question which they could then exchange for cash. Students who received tokens consistently cheated more than those who received cash, which indicated that the further our actions are removed from physical money, the more we have room to rationalize dishonest behavior. This is worrisome in that our society is gradually moving to be a cashless society where digital wallets, stock options, financial investment software, online shopping and smart phone payments are becoming the prevalent way to do commerce. If being close to physical money, being able to see it and touch it, is one thing that is keeping us honest, then the greater our distance to coins and bills, the easier it will be for us to be dishonest while still thinking of ourselves as honest."
The Simple Model of Dishonesty
Why People Cheat and Its Economic Impact
Conflicts of Interest
What Motivates Us to Do Work
The Value of Meaning in Work
How Effort Leads to Fondness of the End Result