In a captivating TED talk which he called our buggy moral code behavioral economist Dan Ariely tells us about the studies he has conducted to discover some of the bugs in our moral code: the hidden reasons we think it's OK to cheat or steal (sometimes). His clever studies help make his point that we're predictably irrational -- and can be influenced in ways we can't grasp.
For example, he conducted some simple experiments. In one he would pass out a sheet of paper with 20 simple math problems that everyone could solve, but would not give them enough time, yet he promised to pay a dollar for every solved problem. He also set up the experiment tempting some to cheat. In his talk he explains, captivatingly, what happened.
Ariely tells us that in economic theory, cheating becomes a very simple cost-benefit analysis - what's the probability of being caught? How much to I stand to gain by cheating?And how much punishment would i get if caught? And then we weigh the options and decide whether it is worthwhile to cheat or not.
What he learned is that:
- A lot of people can cheat
- When reminded of their morality we cheat less
- When we get a bigger distance from cheating, from the object of money, for example, people cheat more
- And when we see cheating going on around us, particularly if it is part of our in-group, cheating goes up
This last point goes a long way to explain the greed, cheating and corruption that has been so rampant in recent years from Enron, to Worldcom, Global Crossing and the numerous examples that are part of the recent financial and banking meltdown and part of the decision making and policies that has led to the current financial crisis.
Ariely also discovered that when people thought what they were doing fell inside an honor code they did not cheat. Which makes the recent initiative of MBA students to sign honor codes so significant and offers the possibility that these future executives will not cheat. Now that would be a transformation.
Check out the honor codes:
- Columbia Business School's Honor Code
- Harvard Business School The MBA Oath
- Thunderbird School of Global Management Oath of Honor
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