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The Honest Truth About Cheating, Lying, and Dishonesty

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If you're watching this right now, you're probably a liar — about something. It doesn't make you bad. It just makes you human. That's what Dan Ariely, behavioral economist at Duke University and author of the best-seller Predictably Irrational, argues in his new book The (Honest) Truth About Dishonesty: How We Lie to Everyone—Especially Ourselves.

In his book, Ariely describes a series of experiments and studies that undermine a core belief among economists and law enforcement about crime, bad behavior, and cheating. The system tends to believe that people make rational cost-benefit analyses about what they'll gain from outside-the-lines behavior and the potential consequences. And so it follows that the way to forestall bad behavior is to put tough punishments in place. Ariely says that's the wrong way to think about it. "Our behavior is driven by two opposing motivations. On the one hand, we want to view ourselves as honest, honorable people.  On the other hand, we want to benefit from cheating and get as much money as possible." Human behavior is the balance between those two forces.

While there is a very small population of sociopaths that cheats all the time, most people tend to cheat just a little bit. At the core of his book lies a study that he repeated in different iterations with college students. They were asked to solve simple math problems, but given a short amount of time to do them. They were told they'd get a certain amount of money for each correct answer. Some students were asked to put the tests in a paper shredder after they finished and then report the number of problems they completed correctly. When Ariely looked into the shredder bin (he lied about actually shredding the paper), he found that students routinely over-reported the number of answers they solved correctly. "If you look across all our experiments, about 30,000 people, a handful cheated in a big way, and 18,000 cheated" in much smaller ways.

The (Honest) Truth About Dishonesty contains plenty of other great insights. People are much less squeamish about cheating when they can distance themselves from what seems to be immoral behavior. People are much more likely to take a can of coke out of a common refrigerator than they are to take a dollar bill off a plate. Golfers are much less likely to say it's ok to physically move a ball four inches with their hands than they are likely to say it's ok to nudge it with their club — even though both actions are violations of rules.

Fatigue seems to play a role. A concept called "depletion" holds that people who are emotionally or physically exhausted are more likely to cheat, whether it's cheating on their diet or cheating on one of Ariely's controlled tests. "You try to resist temptation all day, and you get tired," he said. "So people are prone to cheat more in the evening than in the morning."

In another experiment, Ariely and researchers found that people are more likely to cheat on his mathematical tests when they were wearing fake designer sunglasses. "We take cues from the environment about who we are," he said. "When you wear a set of fake glasses, you think of yourself as slightly more of a cheater. And then you're more likely to take the next step."

There's lots more in the book. Ariely argues that cheating can spread like a virus within organizations — think of Enron, or the many instances of mortgage fraud. When he did a paired, not-so-scientific test, he found that Wall Streeters were more likely to cheat than politicos on the self-reporting mathematical test.

He also notes that cheating and lying is part of life. And it's not always about personal gain. "We routinely don't tell people how they really look and really smell," he notes. People tend to value truthfulness highly, but they also value loyalty. "When other people you care about tend to gain from you being dishonest, you're more likely to be dishonest." In other words, people are more likely to post a positive review about a book written by a friend even if they don't think it is so great.

I've known Ariely for several years. But you can take it from me (honestly) that The (Honest) Truth About Dishonesty is a fun, highly engaging read.

Daniel Gross is economics editor at Yahoo! Finance

Follow him on Twitter @grossdm; email him at grossdaniel11@yahoo.com