>> host: repeated the same thing every day like a movie groundhog day. that's right. >> host: at the next coming duke university professor dan ariely sat down to talk about his book, "the (honest) truth about dishonesty."

in the book, professor ariely looks at how dishonest he plays out in our society. the interview is part of today's college series. it is about 40 minutes. >> host: duke presser dan ariely, what do you teach here at duke? >> guest: i teach a few classes. i was teaching mba class on behavioral economics. teach a phd class psychology for economists. every year a change. one year i taught a class that was co-listed in economics and literature. i asked the students to either run an experiment on behavioral economics or to write a short story using principles from behavioral economics. when you're a tough debate undergrad class. last year i taught the class with kathy davis tried to learn from the students. >> host: what is behavioral economics?

>> guest: may be the best they could think about it is a contrast to standard economics. so we have a view of the human being as being perfectly rational. people have power we can look into the future. they just always make the right decisions. these are actually assumptions. we just assume this is it. behavioral economics. instead of assuming everything puts people in different institutions and see how we behave. surprisingly people see how we behave very irrationally. systematically irrational. because of that we had three different predictions on what we should do. for example, if you built the policy for rational people, but say you think about obesity and say what he might be obese? they probably just don't have the right information. given the right information and don't eat better.

let's force every fast food place to place calorie information on people with realized they were overreading and stop immediately. it turns out it was not the case. posted the calorie information basically nothing happened. tiny changes, but not truth. it's because it's not about information. if you think about the mistakes people make when they make decisions, you'll think about very different interventions. we're not trained to only study human behavior. we also try to think about the human condition, how can we do things to be better off in looking at changes to the need to make an environment to get people to have a better life. >> host: with your background? with your education? >> guest: i have a ba from tel aviv in israel and psychology. i have a masters from umc

another phd in business from duke. so i am involved in both the diversity and still have some loyalty to the end after that i went somewhere else for 10 years. i taught at m.i.t. for a while and then i came back and have been back here since. it's a very special feeling to be that. some of the professors that were my professors when i was a student are still here and i still feel as a student which is a very, very wonderful feeling. i met my wife were phd students at chapel hill. so going with my wife feels that could we are still dating, which is also wonderful. >> host: professor ariely has written three books. the upside of irrationality. his most recent book is this one. "the (honest) truth about dishonesty: how we lie to everyone- especially ourselves."

how do you define dishonesty? >> guest: yes, lots of ways to think about dishonesty. for the purpose of the experiment, we define in a simple way. we see if they live. i don't think there's a lot of ambiguity in the particular one. we give people a sheet of paper with 20 not problems and we say go ahead. you have five minutes. solve as many as you can then i'll pay you a dollar per question. people saw this much as they can. at the end of the five minutes we save the stock. put your pencil down and count how many questions you got correct. now that you know how many questions you got correctly, go to the back of the room and shred it. once you finish writing it, come tell us how many questions you got correct. we pay them. we pay them $6, they go home. but the people an experiment to know is we play with the

shredder. the shredder show the status of the page but the main body of the page remains intact. when you put the sheet and it vibrates, shakes, you feel it is the tragic, but it's not. we can find out how many questions people really solved. people software problems and report to be solving six. so there is a switch. the switch is not you to a few people cheating a lot. it's due to a ton of people cheating a little. we think of this as the fudge factor. the idea we cannot cheat a little bit and still think of ourselves as good people. >> host: does everybody cheat? >> guest: not everybody. in experiments and 65% to 75% cheap. what we don't know is that the people who don't cheat are the same people every time. in each experiment there some people who don't cheat. but we don't know if it's the same people over and over. would be important to figure out

if it's the same people. but we haven't been able to do it for all kinds of reasons. but it's certainly on our list of things to do. >> host: people who cheat, can they justify it? >> guest: there's two types of cheaters. the cheaters to do the cross in its analysis. i'm going to cheat and steal things and the cost is not worried man so one. these are psychopaths. these are people who don't care about morality. they just do a cost benefit analysis. thankfully there are very few psychopaths. we have a lot of little cheaters who cheat as long as they can justify it. now the question exactly is what causes you to be with to justify something. think about all kinds of areas in your life and the cases in which something would help you justify something. for example, what kind of things in the world and hope you justify some thing. this behavior.

>> host: i'm probably not going to answer that question. i'll let you answer. >> guest: other people are doing it. so what that increase shooting? is important to say that when they look at the cost benefit analysis, it should say what we do, how much money. we don't find much evidence. for example, we change how much said to be from cheating on each question from 10 cents to 25 cents, to 50 cents, we don't see an increase in cheating. other people cheat a little bit in there and influenced by the game. if you think about it, what causes so much to be honest and dishonest is really not about the consequences. one example. in the last two years, every time we go out to eat, asked the waiter, i say if i were going to be here and escape without

paying, how would you recommend? sometimes asked for my credit card, but most of the time they give me good advice. they say wait for a good party to be coming in. they have suggestions. and then i say how often do people do that? they say almost never. sometimes get up at me without paying because they forgot about their credit card. sometimes they call back to africa to pay. so something about a restaurant it's easy to cheat. easy to escape. people don't do it. think about illegal downloads. when asked my students that, they'll do it and nobody cares. they don't think of it as a moral issue. if you walk out of a restaurant without paying an eye-catching, you could say i forgot. if you have the legal downloads because she can't say i didn't pay attention. so what stops us from misbehaving is the idea in the restaurant somebody served us.

we consume food. we took some cost in the restaurant and we would feel like a villain simply didn't pay them back. online retail sales billings. it's not the cost benefit analysis. it's the internal judge within us that basically awakens in controls behavior in one case. this is all about justification. what kind of things justify this? everyone else is doing it. we did an experiment in which people in a big room in solving the problems. but we have an acting student sitting in the front row and 30 seconds into the experiment he raises his hand that excuse to have solved everything. what do i do now? you have no doubt this person is cheating in the experiments that you finished everything? take all the money and go. you see the person got away with all the money. but what happened to other people in the room?

lots and lots more people cheat. you have two theories. baby because other people realize there's no downside consequences. look at the experiment. nothing happens. one possibility. the second is because everybody else is good. how do we test this? we change the outfit. we ran the six are your experiment at carnegie mellon. the acting student was a student. he was ready university of pittsburgh's pressure. think about the group of university of students. all of a sudden he's the one who's cheating going away without the money. or by cost-benefit analysis can be used to live in this experiment you can get away with it. here's the proof. but you don't get the signal that this is something people like you are doing. in fact come eat at the signal this is what other people are doing. what happened now? cheating goes down.

so it really is about what do we find acceptable within our group? i'll give you another example. this is a funny experiment. if they studied more than an experiment. i own a vending machine and for a particular week i fixed the vending machine the following week. i put on the outside 75 cents. but the inside of the machine i said to be zero. so what i have been? you press the button, get the candy and your money back. see here's the question to you. how many candies to people take? to people stop after a while? did they take more? what do you think? the answer is lots of people took three or four. nobody took more than four. but three or four of us sensible. we also had a big sign with a number to call in case the machine was not working. how many people do you think all

of? zero. nobody called. i think people make sense for themselves. the proper set their members a that the money and the other machine was a close relative of this machine. i'm just restoring that the need, in some way. the other thing that was very curious as people would call a friend to come take as well. i think that actually helped them justify. it's not just me. other people are doing it and it justifies. so if you think about it like this, we want to balance and look in the mirror and feel good about ourselves. we want to feel we are good, honest, wonderful people. we also want to benefit. it could do both. one of the other. you either are good or you cheat. what we cheat a little bit, we can justify and do both. we can achieve a lot in and of

ourselves as good people, but as long as we cheat just a little bit, all of a sudden we feel good about ourselves. here's another way to think about it. we are sitting at the duke washington in an this is a very nice hotel. so let me tell you about some experiments. we asked about 12,000 golf players questions. imagine the following. imagine your ball fell in the rest. not a good place. you really wished it was to the left. we asked people, would you pick it up and move it forages? people said heaven forbid. i can imagine doing that. this is not what golf is about. just by asking this question, it proves to me you don't know the game. then we asked about kicking the ball a little bit. no problem whatsoever. kick into the club even easier.

the easiest is when you're not looking. if you look up, that turns out to be. it simplifies the intuition that if you pick something and move it, you would feel if you croak. if you just take it a little bit, you would feel it could have gone there. it still has some kind of slander rule were some. it turns out to be incredibly curious about what we can justify and not justified and has really strong ratification. i'll tell you about the most disturbing study and a little joke that little johnny comes home from school with a note from the teacher is a little johnny so the pencil at johnny's father is furious. i'm so embarrassed. you never, never steal a pencil from the kid sitting next to you. and you know all you need to do

is say something. you just mention it, just asking that asking that could bring a distance of pencils pencils from the office. why is this likely in the same? again, we felt taking 10 cents from a petty cash box affiliate a crime. taking a pencil not so much. even if it took 10 cents for a petty cash box in which i personally feel that critics fill the cracks. taken a pencil not so much. so people did the same math problems. they showed at the piece of paper. when they came to the experiment, they either said mr. experiments where i thought x problems, give me x dollars when he said i thought x problems, give me x tokens. repay them in pieces of plastic. the trophy to the site in exchange for money. when you look them in the mid-lie to them from the life or

something not money but was going to become money quickly. a pencil is going to become money and our participants doubled their cheating with the plastic. for me this is one of the most worrisome result. why? because the society we are getting away from money. money's checks, credit cards, derivatives, options come into that with people directly, over great distances and it is possible that as the distances increase, people could misbehave to a larger degree and still think of themselves as behaving well, which means we need to be very careful. when we see each other face-to-face until a tangible goods, we might not have to be as careful about morality and regulation. the best of the further and further we need to be much more careful. >> host: professor ariely, david brooks at "the new york times" blurb your book on the back and outstanding encapsulation of the goodhearted

and easy-going moral climate of the age. do we cheat more now than we did 50, 100 years ago? >> guest: i think we do. i don't think it's because people are different. i think it is because of two reasons. first of all, we live in a different world. we live in a world that has more distance. if you think about stopping to interact directly through some derivatives market it easier to cheat. the second thing is that it's really more great skills in the world than they were 15 years ago. i'm a university professor. i think a lot about morality. once the area made the democrats and we discuss off the record things that bother them. so there's all kinds of new things. for example, think about after all. adhd medication.

but if you take it it's like 15 cups of coffee. you can basically stay awake all night. it's not supposed to be used for recreational abuse. but the drug companies make it easy to go and say i can't focus in the quickly give you medication. where do you stand on the morality of that? is immoral to lie to a doctor should get the medication? we all have some focus problems. is it okay to exaggerate? and if your friend exaggerates, to exaggerate yourself? kinnie virally pilfer non? right now you can go to wikipedia. you can change the value and quality. it's a strange word, ray. there's lots of things like that the grayscale is much more nuanced. finally, dishonesty is much more press than the media. if you think that everybody else is doing that, it creates

situations where we situations where we have a sense that everybody else is doing it to a higher degree than it is. if you think about something like athletes taking drugs, the moment you think everybody else is doing it, you might as well do that. i think it is more common. i don't think it is because the moral fiber of young people is different. for example, almost all the people i know download illegal stuff online. i'm sure you don't but you don't probably because you don't have to do it. but also your friends are not from that community. i'm not sure, that i think you basically have a domain of life that doesn't apply to you, which is illegal downloads. what has happened a society is becoming more distant, which is clearly increasing cheating. we know more. we think it's more prevalent come up with all kinds of new domains of life to create real challenges. think of something like the stock market.

the stock market today is very different than the stock market 50 years ago. we have all these really amazing financial products. i used the word amazing in a very loose way. these are products nobody really understands that allow people to misbehave and all kinds of new ways, ways we didn't have 50 years ago. i think we are going in the wrong direction. one of the problems is we have a slippery slope going down. every deterioration is a long-term deterioration will have to pay for. >> host: there's the old joke how do you tell if a politician is lying? his or her lips are moving. >> guest: here's the thing about politicians. so we did a study in lots of places around the world in the one. one of the places was in washington d.c. the data in a bar where

congressional staffers hang out. we also did it in new york city in a bar where thinkers hang out. who do you think cheated more? the bankers are politicians? the bankers sheeted twice as much. but the two tales of caution, the first is cheating with money, which was the bankers day-to-day bread-and-butter, not the politician and congressional staffers meeting politicians for growth. >> host: what is the experiment you did? >> guest: the same one we go to a bar and give them a major season we change the payment a little bit. but basically indexed to the cost of a in the establishment. but we have some other versions of the next era made. so far there are basic good

>> host: you have a section of the book called adventures with the irs. >> guest: yes. so i have lots of adventures with the irs. but when you think about these results, it is basically asked the question of what do we feel comfortable? it's not about being afraid of being caught. it's not about punishment. if people were afraid of being caught for having negative consequences, nobody would text and drive. that's just an unbelievably to do that you could get penalized. we don't do that. we don't think about the consequences of our actions. the question is at the moment, what do you think open? what we found out is when people think about their own morality to recite and commandments are asking to think about the code of conduct were sent in that it's about morality, that stays with you for a while. not too long, but for a while

and you become more ethical. so we propose for people to get to sign first. he sang at the end. but that's an cheating is over. it's done. no one will say any to go and fix everything. it's over. everything i'm going to say is the truth and will fill it out. it's so natural to think this way. imagine you went to court. would you swear at the end? to finish the testimony and that was a place where everything you said so far as the truth. of course not. in the oral traditions we understand that swearing on the bible is about preparing you to tell the truth. it's not about the verification. so people verify we need to do in the beginning.

the irs said you can't do it in the beginning because verification is crucial. suicide are people assigned twice in the beginning and the end? one for mindset alteration in the other for verification which we don't think is important. and they said that would be confusing. of course if you see the iris forms no that's not what they need to worry about. and then we thought about other ways. for example, what is the first item on the tax form would ask you whether you want to donate some money to a task force to fight corruption. you would think about your own morality and you'd behave better. but the irs did not want to do any experiments for obvious reasons. i think it would have been. , but they are a difficult organization. they have lots of their complexity cedilla for my experiments are not high on their priority list.

but we did a similar experiment. the car insurance company sends people a letter saying please give us your odometer reading. if you get one of those letters you want to decrease your odometer reading because your premium goes down. regular pharmacy right down to an odometer reading and signing period give this one to 10,000 people attend as many people we got them to sign first. the people who sign first reported to be driving 2400 miles more. about 15% more. so this basically suggests when you invoke people's mindset in a more honest way, there's a good chance honesty would follow by higher degree of honesty. so no matter what you think, i don't think it's easy to change people's moral fiber, but what you can do is get people to be

more honest than the two hours than they do their taxes are fair professionals they can be more honest as it is a crucial time for them. but sadly we don't do enough of those. >> host: when att is invoked, does that increase honesty? >> guest: yes and in multiple ways. so first of all, people, when people think about religion in particular, it does bring thoughts about honesty and morality. for example, we did a study in which they asked about 500 people in california to record the 10 commandments and interestingly none of them recall the 10 commandments and many of them wrote new interest in commandments. but if i think about believing

in god. it was about the people who remembered more commandments are last. it is thinking about morality that caused people to behave better. so that's the first. just moral thinking is an issue. the second thing is religions help us because they create rules. something we don't we don't do well in our gravestones. when there is a great so we digress. we don't because we are bad people. we digress because we are people. there's a range of how we see things and it's more comfortable this way. if you are a fan of some basketball team and the referee calls against a team come you can't help but see reality from

the perspective of the team. it's not about being a bad person, just having was caught and motivated reason. so having gravestones don't play well with our cognitive ability because we can outsmart ourselves. i meant the last thing about religion is about forgiveness. so we've done some experiments in which we've given people lots of chances to shoot over time. once this receives people cheat a little trying to balance feeling good, cheating a little bit at some

>> so pure and wonderful you don't want to destroy that feeling and, yes, indeed, a little bit after confession people are better. but what about the what the hell effect? so we got people to the lab, and they did the same task, and they cheated, and still cheating a lot, and then we give them a chance to confess. they got a sheet of paper, and they wrote things they've done recently that they regret, and they shredded it for real. and then they got another sheet, and they basically asked for forgiveness from whatever deity they believe in, and they shred it as well. what happened after both of those? cheating went down dramatically.

this, for me, is the lesson that religion got. religion understands, i think, in a very intuitive way that opening new pages is important. if you don't law people to open -- allow people to open new page, why would you start fresh? if you think you're going to hell, why would you behave well, right? so the question, i think, is how do we get more opening new pages in society, in secular society? so one example is the truth in reconciliation act of south africa. when you say how do you move from appar tiled to post-apartheid? there's no smooth transition. so they stood up and said here are all the awful things we've done, and we'll try to put them to -- [inaudible] but it does create a clearing point. similarly, the netherlands, the dutch bankers, there's a new regulation that they're going to have a vow of honesty for the bankers which i think is very similar in nature in the same

idea. we're going to say here is what we promise, and let's get back some credibility and some promise to this. so i think this is actually a very interesting and promising direction both for social science to try and get lessons from religion and see what we can learn and what kind of mechanism is happening, but also implement some secular mechanism that would help us behave better. there's one other thing i want to say about cheating which is very important for me. you know, the whole thing here is really about conflicts of interest. it's about the fact that people are motivated to see reality in a certain way, and they'll be able to do it. and we have a tendency to look at people who cheat, and we say these are bad people. so it is a personal story that, for me, kind of represents the complexity of this. so i was in -- i got burned many years ago, and i was this hospital for about three years.

maybe four or five years after i left hospital, i come back for a checkup, and the head of the burn department finds me, and he says, dan, i have a new, fantastic treatment for me. come with me. i to to his office, and he explains when i save i have little black dots on the right side of by face, the left side there is no stubble. he wants to fix this asymmetry. how? he's going to tattoo the right side of my face with the same black to thes, and i'll be symmetrical. he says go home, shave, come back tomorrow, i'll make you symmetrical. so i drive home and i think to myself what level i want to be symmetrical, the morning shave, the afternoon shadow, what do i want? i get back to his office the next day and say can i look at pictures of other people you did this to? i say what happens when i grow older and my hair becomes right?

don't worry about it, we'll laser it out. i just don't think i want this. i just don't think it's for me. and then he looks at many he and says, dan, what's wrong with you? do you enjoy looking nonsymmetrical? do you get some pleasure from looking different? now, he was my doctor for three years. he did many, many operations on me, but i didn't do everything he suggested. this was the first time he was trying to give me a guilt trip over a treatment. i anyway, i left his office, i went to his deputy, i said what's going on? his deputy said they've done it for two patients, and they needed a third for an academic paper. i was a really good candidate because half the face burned, half not. now here's the thing. it's easy to say this is a bad physician, but he was a wonderful physician. he was my physician for three years. you see this half an eyebrow here? i lost it. it got burned. and he wanted to fix it,