RSA ANIMATE: The Truth About Dishonesty

Summary

The script explores the paradoxical nature of human honesty, where individuals rationalize small dishonest acts to maintain a positive self-image. It discusses the prevalence of 'little cheaters' over 'big cheaters' and their significant economic impact. The speaker suggests that reminders of moral values and opportunities for 'new page' confessions can reduce dishonest behavior. The summary also touches on the psychological distance in a cashless society and the role of incentives in shaping behavior, as seen in the banking industry.

Takeaways

• 🪞 Humans often strive for a balance between self-approval and the benefits of dishonesty, using cognitive flexibility and rationalization to achieve both.
• 📊 The majority of people are not big cheaters but engage in small-scale dishonesty, which collectively has a significant economic impact.
• 🤔 The psychological distance created by modern financial systems may allow individuals to be dishonest without feeling guilty, as they don't directly see the consequences of their actions.
• 🏦 The banking industry's complex practices can lead to dishonest actions that individuals may not recognize as unethical due to the layers of abstraction.
• 🍽 A restaurant experiment revealed that people rarely attempt to dine and dash, suggesting that the act of physically walking away without paying is a deterrent to dishonesty.
• 🎵 The prevalence of illegal downloads indicates a societal acceptance of small-scale dishonesty, with many rationalizing their actions as harmless or even beneficial.
• 📚 The research tested 30,000 people, finding a small number of big cheaters and a large number of 'little cheaters' whose collective actions had a substantial financial impact.
• 🧐 The ability to rationalize dishonesty is linked to the perceived distance between one's actions and the consequences, which can be manipulated by societal structures.
• 🛑 Reminders of moral values, such as recalling the Ten Commandments, can significantly reduce dishonest behavior by prompting individuals to self-regulate.
• 💬 The 'what the hell' effect describes a point at which individuals, after an initial act of dishonesty, may continue to cheat more freely, justifying their actions as they no longer see themselves as good.
• 🕊️ Opportunities for confession and forgiveness can reduce dishonest behavior by allowing individuals to 'start a new page' and regain a sense of moral integrity.

Q & A

What are the two things people generally try to do according to the speaker?

People generally try to feel good about themselves when looking in the mirror and also benefit from being dishonest, which they can achieve through rationalization.

How does the speaker explain the ability to be dishonest while still perceiving oneself as honest?

The speaker attributes this ability to our flexible cognitive psychology and the capacity to rationalize actions, allowing individuals to cheat a little while still thinking of themselves as honest.

What is the significance of the research involving 30,000 people as mentioned in the script?

The research aimed to understand the extent of cheating in society, revealing that there are far more 'little cheaters' who collectively cause a significant economic impact compared to a few 'big cheaters'.

Why does the speaker use the example of Johnny stealing a pencil?

The example illustrates the difference in perception between stealing a tangible item like a pencil and taking a small amount of money from a cash box, highlighting how the psychological distance from the act of stealing can affect our self-perception.

How does the speaker relate the concept of rationalization to the banking industry?

The speaker suggests that in the banking industry, due to the layers of abstraction and distance from direct consequences, people might take dishonest actions without feeling like they are doing something wrong.

What does the speaker inquire about when asking waiters about escaping payment at a restaurant?

The speaker is exploring the ease with which people might cheat or avoid paying, and the frequency of such occurrences, to understand the prevalence of dishonest behavior in different contexts.

What was ironic about the speaker's book being downloaded illegally?

The irony lies in the fact that the book, which is about cheating, was itself being cheated on by being illegally downloaded, highlighting the commonality of such behavior.

How does the speaker describe the rationalization of illegal music downloads by young people?

The speaker points out that young people rationalize illegal downloads by believing that musicians want their music to be heard and that they are not hurting anyone since they were not going to buy the music anyway.

What role does being reminded of values play in reducing dishonest behavior, according to the speaker?

Being reminded of values, such as through recalling the Ten Commandments or confession, can make individuals more thoughtful about their actions and less likely to engage in dishonest behavior.

What is the 'what the hell' effect mentioned by the speaker?

The 'what the hell' effect refers to the point at which individuals, after a certain level of dishonesty, decide to stop trying to maintain a positive self-image and start cheating more openly.

How does the speaker suggest that confession might work from an economic perspective?

The speaker explores three theories: the added cost of confession, the desire to maintain a good feeling after confession, and the idea that confession might allow individuals to 'open a new page' and start fresh, reducing the likelihood of further dishonesty.

What is the main issue the speaker discusses regarding conflicts of interest?

The speaker discusses how conflicts of interest can bias our perception of reality and justify our actions, leading to dishonest behavior, especially when combined with the influence of incentives and the behavior of those around us.

Outlines

00:00

🤔 The Paradox of Dishonesty and Self-Perception

This paragraph explores the cognitive dissonance humans experience between wanting to see themselves as honest and the desire to benefit from dishonesty. It discusses how rationalization allows individuals to cheat while still viewing themselves positively. The speaker presents research findings involving 30,000 people, highlighting the economic impact of widespread minor dishonesty compared to fewer instances of major cheating. The paragraph also touches on the psychological distance in a cashless society and how it may influence dishonest behavior, using examples from the banking industry and everyday scenarios like restaurant dining and illegal downloads.

05:02

🧐 The Power of Rationalization and Moral Reminders

The second paragraph delves into the concept of rationalization and how it varies in different contexts, making some acts of dishonesty easier to justify than others. It discusses experiments conducted at UCLA involving the recall of the Ten Commandments and the effects of moral reminders on reducing dishonest behavior. The speaker also explores the Catholic practice of confession and its potential economic benefits in curbing dishonesty, introducing the 'what the hell' effect and the idea of opening a new moral page as a means to reset one's behavior and self-perception.

10:02

🏦 The Financial Crisis and Incentive Structures

In the final paragraph, the speaker examines the role of conflicts of interest and incentive structures in the financial industry, drawing a parallel to the biases that can arise from personal motivations. The discussion centers on how the financial crisis was exacerbated by placing individuals in situations where their vision was distorted, and the importance of changing incentive structures rather than simply replacing individuals. The speaker emphasizes that everyone has the capacity for dishonesty under certain conditions, and it is the environment and incentives that must be addressed to prevent misbehavior.

Keywords

💡Cognitive Psychology

Cognitive psychology is the study of mental processes such as thinking, learning, and memory. In the context of the video, it is the flexible nature of cognitive psychology that allows individuals to rationalize their actions, even when they are dishonest. The script mentions how we can 'benefit from cheating just a little bit' while still 'thinking of ourselves as honest, wonderful people', which illustrates the role of cognitive psychology in self-perception and moral justification.

💡Rationalization

Rationalization is the process of justifying or making excuses for one's actions, especially when they are wrong or unreasonable. The video discusses how rationalization enables individuals to cheat or act dishonestly while still maintaining a positive self-image. For example, the speaker talks about 'rationalize our actions' and how 'if we can rationalize things to a higher degree, we will be able to cheat more', highlighting the importance of rationalization in the theme of dishonesty and self-perception.

💡Big Cheaters vs. Little Cheaters

This concept from the video contrasts two types of dishonest individuals. 'Big Cheaters' are those who commit significant acts of dishonesty, while 'Little Cheaters' engage in minor acts of cheating. The video uses research data to show that while there are few 'big cheaters', the cumulative effect of many 'little cheaters' can have a substantial economic impact. The script states, 'we found 58,12 big cheaters...and we also had 18,000 little cheaters', demonstrating the prevalence and impact of minor dishonesty in society.

💡Economic Impact

Economic impact refers to the effects that actions or events have on an economy. In the video, the economic impact is discussed in relation to dishonesty, particularly how the collective actions of 'little cheaters' can significantly affect the economy. The speaker provides a specific example: 'they start to get a $36,000 from me', emphasizing the tangible consequences of widespread minor dishonesty.

💡Cashless Society

A cashless society is one where financial transactions are conducted electronically rather than with physical currency. The video explores the idea that as society moves towards being cashless, there is a psychological distance created between individuals and the consequences of their actions. The script mentions, 'we're becoming a cashless society...with the higher distance between us and the consequences of our action', suggesting that this distance may facilitate dishonest behavior.

💡Psychological Distance

Psychological distance refers to the perceived separation between an individual and an event or object, which can affect their emotional response and decision-making. In the context of the video, psychological distance is increased by modern financial practices like credit cards and electronic wallets, potentially making dishonesty seem more acceptable. The speaker suggests that 'as the distance increases, people can be dishonest but at the moment don't think of themselves as doing anything dishonest'.

💡Conflicts of Interest

Conflicts of interest occur when an individual's personal interests or biases could potentially interfere with their professional judgment or actions. The video discusses how conflicts of interest can distort one's perception of reality and lead to dishonest behavior. The script states, 'conflicts of interest mean that we have a pool to see reality in a certain way and we could justify our view', illustrating how personal gain can cloud judgment.

💡Moral Code

A moral code is a set of principles or rules that guide an individual's behavior and decision-making, often based on cultural, religious, or ethical beliefs. The video suggests that being reminded of a moral code, even if it's not one's own, can reduce dishonest behavior. The script describes an experiment where recalling the 'Ten Commandments' led to no dishonesty, showing the power of moral codes in self-regulation.

💡What the Hell Effect

The 'What the Hell Effect' is a term used in the video to describe the moment when an individual, after a period of minor dishonesty, decides to engage in more significant dishonest behavior because they no longer view themselves as good. The script explains this as 'many people switch and start cheating all the time' after a certain point, indicating a shift in self-perception that can lead to escalated dishonest actions.

💡New Page

In the video, 'opening a new page' refers to the opportunity to start afresh after admitting wrongdoing and seeking forgiveness. This concept is related to religious practices like confession and is suggested as a way to reduce dishonest behavior. The script mentions that after 'a non-catholic kind of confession...cheating goes down', indicating the effectiveness of this approach in promoting honesty.

Highlights

People have a dual desire to view themselves as honest while also benefiting from dishonesty.

Cognitive flexibility and rationalization allow individuals to engage in dishonest behavior while maintaining a positive self-image.

The research tested 30,000 people and found a significant number of 'little cheaters' causing a substantial economic impact.

Society tends to focus on 'big cheaters' while the majority of dishonesty comes from many 'little cheaters'.

The psychological distance created by cashless transactions and financial instruments may contribute to dishonest behavior.

The banking industry's practices may exemplify how actions taken without direct consequences can lead to widespread dishonesty.

A study found that asking waiters about restaurant escape tactics revealed a low incidence of actual non-payment.

Contrastingly, the rampant illegal downloading of a book on cheating highlights the normalization of such behavior.

Rationalization of dishonest actions is common, as seen in the justifications for illegal music downloads.

Experiments at UCLA showed that recalling the Ten Commandments significantly reduced dishonest behavior.

Catholic confession may serve as a mechanism for reducing dishonesty by allowing individuals to 'start a new page'.

The 'what the hell' effect describes a point at which individuals, after an initial transgression, engage in more frequent dishonest behavior.

Creating opportunities for confession and forgiveness can effectively reduce dishonest tendencies.

Conflicts of interest can significantly distort an individual's perception and justification of reality.

The financial crisis highlighted how incentive structures can lead to widespread misbehavior in the banking sector.

Changing incentive structures, rather than simply replacing individuals, is key to addressing systemic dishonesty.

Transcripts

human beings basically try to do two

things at the same time on one hand we

want to be able to look at the mirror

and feel good about ourselves on the

other hand we want to benefit from being

dishonest now you could say you could do

one or the other you can either look at

yourself as honest or you could benefit

from this honesty you can't do both

well turns out that thanks to our

flexible cognitive psychology and thanks

to our ability to rationalize your

actions we could do both and as long as

we rationalize our actions and as long

as we choose just a little bit we can

benefit from cheating just a little bit

and at the same time we can keep

thinking of ourselves as honest

wonderful people it's all about

rationalization if we can rationalize

things to a higher degree we will be

able to cheat more or be more dishonest

and think of ourselves as good people

and if we can rationalize less we would

be more honest and by the way it's not

as if we have a lot of big cheaters we

have a lot of little cheaters in this in

this book in this research we've

basically tested about 30,000 people and

from those 30,000 people

we found 58 12 big cheaters and those 12

big cheaters together stole about 150

dollars for me from those 30,000 people

we also had 18,000 little cheaters and

they start to get a $36,000 from me and

I would like to argue that this kind of

reflects what we have in society sure

there are some big cheaters out there

people who just go all the way but

they're very few of them and in fact the

magnitude of this honesty we most likely

see in society is by good people who

think they're doing good work but in

fact cheating just a little bit but

because there's so many of them of us

this actually has a tremendous economic

impact there's a little joke that the

journey comes home from theirs from

school with the little note that says

that Johnny stole a pencil from the kid

who sitting next to him and Johnny's

father is furious and he said Johnny you

never never never steal a pencil from

the kid who sitting next to you this is

unacceptable I can't believe you do this

you're grounded for two weeks and

besides Johnny you know very well that

if you need a pencil you can just say

something you could just mention it and

I can bring you dozens of pencils from

the office

now why is this slightly amusing because

I think we all recognize that if we took

ten cents from petty cash box we could

not help but think of ourselves as these

but if we took a pencil we would feel

very differently in fact if we took a 10

cents from petty cash box and when to

buy a pencil we would still feel like

this but taking a pencil is kind of

removed from money because if you think

about it we're becoming a cashless

society

we're becoming a society with the higher

distance between us and the consequences

of our action credit cards electronic

wallets mortgage-backed securities stock

options think about all of those things

that represent psychological distance

between us and the people us and money

could it be that as the distance

increases people can be dishonest but at

the moment don't think of themselves as

doing anything dishonest

I think the banking industry is kind of

trying to think about things exactly in

that way imagine you manipulate

something like I don't know interest

rates just so many layers on top of that

and you don't see who exactly you're

affecting even though you might affect

the whole global economy that it might

be very easy for people to take steps in

that wrong direction

and still think of themselves generally

as not doing anything terrible anyway so

so in the last year and a half as I've

been working on the book every time I go

to a restaurant I asked the waiter if

there's a way to eat in this restaurant

and escape without payment I said look

I'm not going to do it but just

generally if you were giving me advice

how would you tell me to do it and aside

from one person they always have great

suggestion and then I saying how often

does it happen and they say almost never

I said from time to time somebody walks

up without paying but they walk slowly

and we we stop them and they just say

they forgot almost never people just

walk without payment

contrast that with illegal downloads my

book that came out about a month ago in

the first two days was done on 20,000

times from some website it's kind of

ironic a book on cheating was

but if you talk to young people

virtually all of them have illegal music

on their computers and nobody feel bad

about it

in fact one young guy recently we talked

about a stood up we said excuse me I

don't think this is wrong

he said musicians want the music to be

heard that's why they wrote it for and

label companies are evil and he said

beside I was not going to buy this music

anyway so I'm not hurting anybody and

everybody is doing it right so this guy

in fact if you listen to him he was not

downloading illegal stuff he was

fighting for freedom idea he was

promoting the world making it a better

place an amazing level of

rationalisation that you couldn't do in

a restaurant you can't go and say to

yourself oh you know what chefs really

want their food to be eaten and it's

really owned by a conglomerate that is

really not that good then I mean if some

things lend themselves to a much higher

degree to rationalization some things

are much harder so we talked about what

gets people to cheat more what would get

people to cheat less what would get

rasterization to go down to kind of

scrutinize their own action being

reminded of values yeah we've done we've

done that in a couple of ways and it's

really quite I think optimistic we went

to UCLA Los Angeles and we asked about

500 students to try and recall the 10

commandments but after trying to recall

the Ten Commandments when we gave them

the same opportunity to be dishonest

nobody was dishonest in fact even when

we take self-declared atheist and we ask

them to Swan the Bible and we give them

a chance to cheat they don't cheat so

this suggests that there is something

about reminders that the moment we think

about morality even if it's not our own

moral code all of a sudden we are kind

of supervising ourselves to a higher

degree we're more thoughtful about our

own actions and as a consequence we let

ourselves get away with less activities

we also looked at the Catholic

confession we went to talk to Catholic

priests and we said from an economic

perspective we don't understand

confession please explain to us they

said if you can confess and be absolved

shouldn't you cheat more shouldn't you

cheat on the way to confession

the priest said no so here are three

theories how confession might work one

theory is that you think to yourself I

want to rob this convenience store but

I'll have to confess it will be

unpleasant

and the priest would think badly of me

and this added cost makes the whole

thing not worthwhile we don't find any

evidence for that

another possibility is like the Ten

Commandment experiment I told you about

you come out of confession you feel good

or wonderful about yourself and for a

little while longer you want to keep

that feeling of being good we find some

evidence for this but the most

interesting version is the following

when we gives people hundreds of

opportunities to steal and to cheat over

time what we find is that people are

slightly dishonest balancing feeling

good about myself cheating a little bit

feeling good ginger and then at some

point many people switch and start

cheating all the time and we call this

switching point to what the hell effect

it turns out we don't have to be a

hundred percent good to think of

ourselves as good but if at some point

you don't think of yourself as good you

might as well enjoy and many people by

the way report this same thing with

diets you start a strict diet and then

you violate your diet and you say act

today I'm not dieting I might as well

have a burger and some fries I'll start

tomorrow next Monday or next month now

if people cheat a lot all the time why

would they ever stop why would you ever

stop if you think you're going to hell

in a Catholic version why would you ever

stop the Catholic instruction might have

actually stumbled on this witnesses

might be a really good idea that if you

are cheating a lot maybe you need to be

able to open a new page so we did these

experiments we do a non-catholic

kind of confession people cheat a little

bit they cheat a lot we give them a

chance to say what they have done badly

we give them a chance to ask for

forgiveness from whatever spirits they

believe in what happens after those two

actions together cheating goes down

opening a new page does seem to be very

successful just by the way I think is

something that religion figured out and

the question is how do we put it into

civic society should we create

opportunities for bankers for example to

ask for forgiveness from time to time

and start and start a new page people

would transgress there's nothing that we

can do about it how do we get people to

feel clean again and able to act on

their goodness let me let me just

summarize with the following if you

think about it this is really the whole

thing is a question of conflicts of

interest and conflicts of interest mean

that we have a pool to see reality in a

certain way and we could justify our

view

imagine that you like a particular

football soccer team and you go to a

game and the referee calls the call

against your team is there any way but

for you to think the referee is evil

vicious stupid blind something like that

of course not you can't help but having

your motivation influence how you see

reality now replace your team with five

million dollars now it's something else

and you can see how the same forces

would get you to see reality in the

biased way so imagine you are banker and

imagine that I paid you five million

dollars a year to view mortgage-backed

security as a good product

could you help but seeing them as better

than they are now I'm not saying that

you will shift your opinion from

thinking that are terrible to think that

are wonderful but you'll probably shift

your understanding of them and what if

everybody around around you thought that

they were great as well and what if they

were difficult to compute and you were

sitting there with a big spreadsheet and

you would different calculations and

parameters and estimators and in the

bottom you would see their final value

but it would also reflect on your end of

your bonus wouldn't you shade your

evaluation even further and this is

actually quite important because if you

think about the whole financial crisis

we've taken people and we put them in

situations which basically are

guaranteed to blind or at least to

distort their vision and we expect

people to overcome that you know we all

have a tendency to think of people as

good or bad and we say as long as we

kick the bad people everything would be

fine

but the reality is that we all have the

capacity to be quite bad under the right

circumstances and I think in banking

we've created the right circumstances

for everybody to misbehave and because

of that it's not such a matter of

kicking some people and getting new

people in it's about changing the

incentive structure that because unless

we change that we're not going to get

sold

you