Transcript for Daniel Ariely, “The Context of Our Character”

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[00:00:03.94] This is Duke University.

[00:00:34.93] When the scandals with Enron were becoming apparent, I started thinking about cheating. Thought about it in 2 ways. And the first one is that I wondered whether those architects at Enron would have stolen money from an old lady's purse. I mean, let's assume that they couldn't have been caught. And let's say she has $10,000. Would they have snatched her purse and take it away from her?

[00:01:04.09] My thoughts, maybe not. It wasn't necessarily evil people. Clearly they were doing awful things and they stole millions of dollars from old ladies in reality. But the situation where they would still directly from one person didn't look to me like it was going to be likely for these guys, Really what I read about them.

[00:01:23.64] So, you know, when I started looking at experiments where we would tempt people to steal, and we would try to understand what really governs cheating in everyday life. And a way to think about it is our conscience plays a role in our decision. It's not just about the external rewards and benefits. We can cheat up to the place where we would irritate our conscience, and in that place we stop.

[00:01:53.48] In one experiment, I walked around in dormitory refrigerators one day. And I put in the refrigerator six-packs of Coke. And then I would come every few hours and I would measure how many Cokes are left. What's the half life of Coke? And it turns out that Coke disappeared very, very fast from the dorm. These were not common refrigerators, in the sense that everything belongs to everybody. Everybody had their own property. But when the property was Coke, people stole the Coke from somebody else, not knowing who they took it from.

[00:02:28.65] When I repeated this experiment, but instead of putting Coke I put a plate with six dollar bills, nobody took the money. What's the intuition here? The intuition is, would you take a pencil from work home, and will you take $0.10 from a petty cash box? Those things feel very differently. And even though you can tell yourself all kind of stories about pencils, if you take money from somebody, you would feel like a thief. If you take a pencil, you could tell yourself all kinds of stories about the work expects you to do it, it's a part of the compensation, everybody does it, and so on. The sad thing is, as we move to a society where we have less and less cash, and more and more symbolic transactions-- credit cards, gift certificates, PayPal, and so on-- it might actually become easier and easier for people to be dishonest, and still think of themselves as being honest.