17 Jan 2013

The (Honest) Truth About Dishonesty -- the review

The (Honest) Truth About Dishonesty: How We Lie to Everyone---Especially Ourselves is the second book that I've read by Dan Ariely [Predicatably Irrational], and it's similarly enlightening.*

The main focus of this book -- as you can see from the title -- is dishonesty, an area which Ariely has been exploring for several years. I'm guessing that this line of research grew out of his broader interest in the difference between how we behave (revealed preference, or RP) what we profess (stated preference, or SP). This research agenda is similar to mine, as RP-SP divergences loom large in many water sector topics (everything from environmental flows to human rights). Most of those topics are interesting because success and failure depend on decisions made by people who have the freedom to favor themselves over those who depend on them (I explore this "principal-agent problem" here and here).

But Dan states his purpose differently, i.e., he proposes to explain why we are not often dishonest in terms of a rational calculation of costs and benefits (as the economist Gary Becker proposed) but in terms of continuous small fudges made by many people. The socially-relevant dimension of dishonesty, in other words, is not about car thieves and purse snatchers but people taking pencils from the office or stock brokers thinking their fees are justified. The enemy, in other words, is us -- or as he states on page 22:**
Essentially, we cheat up to the level that allows us to retain our self-image as reasonably honest individuals.
From these words, you may be able to guess that this book explores how we create our self-image and how to change our perception of it.***

So that's a LOT of context and summary. Here are some particular notes:
  1. People will steal more, the more "distant" the object is from money, i.e., pencils are easier than petty cash and stock options are easier than salary.
  2. People who are given gifts are more likely to "objectively" favor the person/opinion of the giver. This is relevant to discussion of everything from political lobbying to "free samples."
  3. That said, it's not easy to eliminate conflicts of interest without inadvertently increasing other costs (lobbying has SOME use).
  4. We make worse decisions and are less honest when we are tired, hungry, etc.
  5. People who wear counterfeit (to show false prosperity) may also be less honest (theft, infidelity, etc.) and less trusting (thinking that you're the same).
  6. The "why-the-hell-not?" effect of eating too much after a small lapse in your diet, taking more drugs once you've tried a few or breaking more laws once you've broken one is real and harmful to you and others.
  7. We are more likely to cheat when someone in our social group does. (I read about the "culture" of cheating years ago, and this finding is similar. We pay attention to social cues.) That said, people in many countries cheat at similar levels in NON-cultural settings; local versions of cheating (infidelity, running red lights, etc.) will still vary.
  8. Ariely (posing as a student) paid for papers from "essay mills" that were crap. When he complained, they threatened to turn him in for cheating!
  9. People are more dishonest when their cheating can help others. This result has something to do with our ability to rationalize that it's not for us, but them (or our ability to "blame them" for the cheating).
  10. Most religions have ways to reduce cheating (confession, starting the new year clean, the Haj, etc.) -- and that's no accident.
Bottom Line: I give this book FIVE STARS for it's fascinating exploration of how we lie to ourselves (forget rational homo-economicus), the impacts of those lies and how to reduce them. Anyone interested in how humans work with "discretion" should read this book.
* I'm also reading Kahneman's Thinking Fast and Slow, which covers FAR more material at length. Review to come.

** I am reviewing the Kindle edition, and I don't think I'll be buying many more hard copies. I am traveling and it's MUCH easier to download and mark up an e-book than find or carry around a hard copy (I have eight books on my iPad). I was going to send the Nile book to someone in the US but didn't, since postage would have been $50! It's time for you to start looking at e-books if you are not already.

*** Adam Smith explored "fair" behavior in his 1759 Theory of Moral Sentiments by considering how actions would change if we looked at ourselves from an outsider's perspective (a variation on "what would your mother think?")

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