Wednesday, August 31, 2011

Dan Ariely

Today I got to hear Dan Ariely, author of Predictably Irrational and The Upside of Irrationality, speak. Professor Ariely performs studies in the area of Behavioral Economics. His speech today was about cheating.

People cheat for all different kinds of reasons. His first example was of dentists who have a conflict of interest that encourages cheating. In fact, the longer a person is with a dentist, the more that dentist is likely to recommend less necessary work. Because of the relationship, the patient trusts the dentist and the dentist creates a story to justify to himself what he does.

In studying cheating, it does not seem to matter what culture or religion the people he studies comes from, cheating is pretty much consistent. He acknowledges that different cultures have different moral values so that different forms of cheating occur at different rates depending on the society looked at. However, the techniques that Ariely uses to measure cheating take people out of their normal environment and place them into an artificial environment.

There are two theories of cheating. The rational or classical theory is that people cheat based of off the expected return for cheating versus the expected cost, meaning it is simply a cost benefit analysis. However, the Behavioral Economic theory is that people tend to act emotionally and that personal characteristics or environment are more likely to determine whether or not someone cheats.

To test the theories, Ariely performed tests were people were offered $1 per correct answer. The tests were simple but the participants were not given enough time to complete the entire test. Once the test was complete, they graded their own work, placed it into a rigged shredder and came to the from to state how many they got right. On average, the participants got 4 right but on average they claimed they got 6 right. This was not due to a few participants cheating and claiming they got them all right, most cheated just a little.

To determine if the classical theory was right, one participant stood up and said he was done after just 30 seconds. This set the expectation that cheating was accepted by the other participants. In one test they had the cheat wearing a sweater of the school performing the test and in a second test he wore a sweater from their biggest rival. Under the classical theory, it should not matter what this obvious cheat was wearing, students should behave the same way. However, if the cheat was wearing the local school sweater, cheating went up but when he wore the rival sweater cheating actually went down. This confirms that it is more then a simple cost/ benefit analysis to cheating.

So much good information was given at this presentation that it is impossible to go over it all. Several of these studies are mentioned in Predictably Irrational. I would highly recommend his book.

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