Fudging the nudge

Sorry folks, missed a post last week because I’ve ended up with two more courses running at the same time and it all got too much again – will I never learn?

This week I’m back to share what I learned on Dan Ariely’s behavioural economics MOOC A Beginners Guide to Irrationality on Coursera. This week we’re on to rational crime, the fudge factor and morality training.

Is dishonesty the result of a few bad apples or is it due to many people cheating just a little bit?

Well, there is no morality in economic theory which is why pure economics doesn’t work and why behavioural economics was born. Apparently lots of people cheat just a little bit and we carry out mental cost benefit analysis, weighing up the benefit of cheating against the possible costs of getting caught.

According to Dab we need a new economic model of dishonesty that doesn’t solely rely on cost benefit analysis.

The fudge factor

This is when we balance a view of ourselves positively against benefiting from cheating.
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Shrinking the fudge factor

Dan carried out an experiment where people took a test where there was an opportunity for cheating. Those who were asked to write down as many of the 10 commandments as they could before taking the test didn’t cheat at all. Reminding people of their morality makes them more honest and this work has resulted in many educational establishments introducing honour codes.

The bad news: morality training has no measurable long-term effect.

The good news: reminding people of morality just before being tempted to cheat does make a difference. Honour codes work better at the beginning of a process and they don’t work at the end as the cheating has already happened. An example of this in practice would be the work the Cabinet Office’s Behavioural Insight’s Team did with tax return forms where they moved the honesty signature box to the top of the form and saw fantastic results compared to when it had been at the bottom.

Dan’s research shows that in the US lots of people exaggerate by 10-15% on insurance claims. In their heads this doesn’t seem like a lot to individuals but tallied up costs a whopping $24 billion a year.

Expanding the fudge factor

Removing the direct link to money allows us to rationalise our dishonesty. In his experiments Dan discovered that cheating doubles when cash is replaced by tokens.

You can also expand the fudge factor by providing examples of others cheating – this is called social proof. A great example of this is when doctors surgeries around the country put up notices showing how many people didn’t turn up for their appointments. Instead of attendance going up, it went down because people saw it as almost normal behaviour to just not turn up instead of cancelling their appointment.

Do certain personality traits foster cheating?

Cheating is about how much we can rationalise our behaviour and according to Dan creative people are best at this because we can create little internal stories to explain our behaviour.

We can rationalise to a greater extent when there is:

  • a greater distance from money
  • social proof
  • creativity

During a series of experiments Dan lost $150 to 12 people who cheated a lot but $36,000 to 18,000 people who each cheated a little.

Next time I’ll look at conflicts of interest, cheating over time and across cultures and medical decision-making gone wild.

Tune of the week

Cheat song! (Whisper Parody) – by Emmanuel N. Phillip Hudson

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