Why do some people cheat while others don’t? It might be a black and white question about morals, but regular readers will know that when the human mind is involved, nothing is ever as simple as it seems. A great new study published this month shows that the behavior of those around us has a bigger influence on our honesty than we might like to admit, and that bad behavior might be contagious.

Bernie Madoff is the latest poster child for blatant dishonesty, perhaps successfully taking the crown from long time champions Enron. But these are just two prominent examples; we’ve all heard of someone who’s stolen from work, cheated on their taxes or of an athlete using illegal drugs.

But what’s this got to do with you? You’re a good person right? But what happens to you when you see someone behaving unethically and getting away with it?

That’s the question Dan Ariely of Predictably Irrational fame asked in his recent paper examining the contagious nature of unethical behavior.

Cold assessment of risk versus reward

One of the classical attempts to explain bad behavior looks at it as a simple economic problem. When given the opportunity people will cheat up to the level they think they can get away with. Along this line of thinking, there is a conscious or unconscious calculation of risk vs. reward. For example, when stealing a pen from work you are unlikely to get caught, but the reward is small. But at the end of the day you still get paid your salary and also have a pen, so you are ahead of the game, having maximized your reward.

But as I’ve covered many times here on Very Evolved, the human brain is not a purely rational place especially when money is involved.

Also we are not alone. We never make decisions in a social vacuum – everything we do has consequences for those around us and this is factored into our decision making process. And vice-versa – observing how others behave lets us know how we should act if we want to fit in.

But does this extend to cheating and unethical behavior?

Honestly I’m trustworthy

The setup of the experiement involved asking several large groups of students to solve a series of 20 math problems within a certain time limit. The subjects were then instructed to write down how many they solved and then shred their answer sheet so it could not be checked. The researchers then paid out cash based upon how many problems people reported getting right.

The catch was that the time limit to do the problems was short enough that no one could realistically solve all of them.

Of course we’re not really interested in how good people are at mathematics under pressure, so the real test began when a planted subject loudly announced halfway through that he’d solved all of them and what he should do now.

Everyone in the study knew that this must be impossible given how little time they had, so this person was clearly an example of blatant cheating. At this point the plant takes all of the money and leaves without any penalty or shame.

The effect on the remaining people was unmistakable: the barefaced dishonesty caused a massive increase in cheating across the group.

Thinking this might conform to the cold calculation theory that people will assess the risk of getting caught and cheat up to that level, the experimenters changed one simple aspect of the study: the T-shirt of the blatant cheater.

When the shameless cheater was wearing a plain shirt like the rest of the students at the university where the test was being conducted, group cheating rose dramatically. But when the cheater wore the shirt of a rival university everything changed.

Seeing this outsider being brazenly unethical actually caused the levels of cheating to go down below normal.

Surprisingly, the identity of the cheater matters. Insiders, or those people on your team have a much greater influence over our perception of what is morally acceptable than strangers do. This also argues against the decision to cheat being based on a cold risk-reward calculation, otherwise seeing the rival university member cheating and getting away with it should have encouraged dishonesty as much as any in-group member.

Should we be looking for the next Bernie Madoff?

Given that Bernie’s portfolio always returned a profit year after year and never lost despite what the market was doing, it had to be clear to other fund mangers that this was impossible and some cheating was involved. So the question arises: How many followed Bernie’s example?
Knowing how people from the in-group respond to bad behavior of one of their own it seems likely that we haven’t seen the last of the unethical fund manger. Perhaps not on this scale or with the same scheme, but the contagious nature of bad behavior makes it likely that more unethical events are yet to be discovered, a conclusion that Ariely also considers possible.

Do you really want to cheat?

Fortunately there are two silver linings we can look to. First, now that Bernie has faced the consequences he is no longer like our T-shirt wearing cheater. Just as bad behavior can spread, seeing unethical actions punished may help to correct the ethical quagmire that Bernie helped create.

And the second comes from the final experiment from the study. This time the planted test taker doesn’t cheat, but merely asks loudly at the beginning “is it OK to cheat?” A bold question to be sure, but it the effect is to bring to the forefront of our minds the ethical considerations of what what we are about to do. The results? Everyone cheated less than normal. It seems that even without examples of good or bad behavior, just considering the ethics of the situation is often enough to keep our moral compass pointed in the right direction.

To use a well-worn phrase; the moral of the story is that individual acts of unethical behavior can have a very potent influence effect on the honesty of the whole group. So now you can ask yourself one question:

Are you setting the right example for your group?

I think a good example to set would be to encourage you to get instant updates to Very Evolved via Email or RSS.

March 23rd, 2009