Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

0

Share

Download to read offline

Lessons in Dishonesty - How we cheat ourselves into making decisions

Download to read offline

Summary of behavioural economics guru Dan Ariely's book "The (Honest) Truth about Dishonesty" told with a product management angle. How do we all fool ourselves into making decisions? And what can we do about it, as product designers, people managers and consumers?

Related Books

Free with a 30 day trial from Scribd

See all
  • Be the first to like this

Lessons in Dishonesty - How we cheat ourselves into making decisions

  1. 1. Lessons in Dishonesty How we cheat ourselves into making decisions
  2. 2. Warning: None of these ideas are mine! All based on Dan Ariely’s 2012 book: “The (Honest) Truth about Dishonesty” ProductCamp London – March 28, 2015 2
  3. 3. Inspired by Enron consultants Dan met someone he respected, who somehow never saw the problems in Enron while consulting there • “wishful blindness” • “Is dishonesty limited to a few bad apples, or is it a widespread problem”? ProductCamp London – March 28, 2015 3
  4. 4. Rational economics model of dishonesty “Simple Model of Rational Crime” • Economist Gary Becker risked a parking fine, weighed pros and cons, wrote a paper • Led to economic theory of rational cost/benefit for making decisions • A theory which is being disproved more and more… ProductCamp London – March 28, 2015 4
  5. 5. An example Retiree volunteer tellers at charity gift stores • Of $400k of sales, $150k was disappearing • Set up a sting, caught one guy… but it kept happening – was lots of people stealing just a little amount each • Got everyone to write down every sale in a ledger, thievery stopped • “We are going to take things from each other if we have a chance… many people need controls around them for them to do the right thing.” ProductCamp London – March 28, 2015 5
  6. 6. The matrix task Participants were asked to solve a series of simple problems (find numbers that add up to 10) • They were paid $2 for each correct answer • Some were checked and counted by administrators • But some were asked to shred the answer sheet and report verbally how many they got right • How much did people overestimate? ProductCamp London – March 28, 2015 6
  7. 7. The matrix task (2) • Checked: 4/20 • Self-reported: 6/20 • Doesn’t sound like much, but it’s a 50% increase… • Next they tried more money: $10 per correct answer! • How many this time? ProductCamp London – March 28, 2015 7
  8. 8. The matrix task (3) • Money made no difference • Participants added two correct answers each time, regardless of money • In fact, people cheated slightly less for more money ProductCamp London – March 28, 2015 8
  9. 9. The matrix task (4) • How about the probability of getting caught? – They put a blind person in charge of the money, but had a hidden camera – no difference! • Probability of standing out? – Told half that 4 was average rate, other half that 8 was average rate – no difference! • “Essentially we cheat up to the level that allows us to retain our own self-image as reasonably honest individuals” ProductCamp London – March 28, 2015 9
  10. 10. “Fudge factor theory” • Jerome K Jerome: – “When I have caught forty fish,” said he, “then I will tell people that I have caught fifty, and so on. But I will not lie any more than that, because it is sinful to lie.” • More likely to “steal” tokens rather than money – People took coke cans left in dorm fridges, but not cash ProductCamp London – March 28, 2015 10
  11. 11. Examples • Billable hours – Consultancies over-estimating hours – The one person who was totally honest had low utilisation, and was the first to go in downsizing • Other examples? – Estimating assumptions when writing business plans ProductCamp London – March 28, 2015 11
  12. 12. How to “remind” people to be honest? • Thinking about moral codes – “try to write down the ten commandments” • No one cheated! • Signing a “promise not to cheat” – Signing at the beginning is better than at the end ProductCamp London – March 28, 2015 12
  13. 13. Conflict of interest • Dentist upselling new tools • Consultants using new techniques and frameworks • Test: advisors paid more for bigger estimates of a marble guessing game – Stuck to the “fudge factor” of 25% • “Conflict-of-interest plus disclosure” – INCREASED estimates by ANOTHER 25%! – Listeners discounted their estimates, but only by 25% ProductCamp London – March 28, 2015 13
  14. 14. Decision fatigue, cognitive load • We make worse decisions when we are tired • Stanford experiment: – A group remembered a 2-digit number – B group remembered a 7-digit number – On the way was a plate of fruit and a plate of cake… – You can guess what happened! ProductCamp London – March 28, 2015 14
  15. 15. Ego depletion • Judges make harsher decisions when they’re hungry – Denying parole is the default decision – takes less thought – Granting parole takes more deliberation, only done when judge has more energy • So you should bring food to your next tough stakeholder meeting! ProductCamp London – March 28, 2015 15
  16. 16. Fakes vs luxury goods • Having a fake handbag makes you more likely to cheat! – (30% vs 74% cheated on the matrix task) • Having a real handbag changes your own views: “self-signaling” • Giving money (or food) to beggars makes people feel more altruistic – “fake it till you make it” really can work ProductCamp London – March 28, 2015 16
  17. 17. Self-deception • “I knew it all along” effect – Get people to write down their predictions first • Exaggeration – Brian Williams – Bill O’Reilly ProductCamp London – March 28, 2015 17
  18. 18. Creativity and dishonesty • Correlation between creativity and selfishness – “the link between creativity and dishonesty seems related to the ability to tell ourselves stories about how we are doing the right thing, even when we are not” ProductCamp London – March 28, 2015 18
  19. 19. Conflict of in • Thinking about moral codes – “try to write down the ten commandments” • No one cheated! • Signing a “promise not to cheat” – Signing at the beginning is better than at the end ProductCamp London – March 28, 2015 19
  20. 20. ProductCamp London – March 28, 2015 20
  21. 21. ProductCamp London – March 28, 2015 21
  22. 22. ProductCamp London – March 28, 2015 22
  23. 23. ProductCamp London – March 28, 2015 23

Summary of behavioural economics guru Dan Ariely's book "The (Honest) Truth about Dishonesty" told with a product management angle. How do we all fool ourselves into making decisions? And what can we do about it, as product designers, people managers and consumers?

Views

Total views

324

On Slideshare

0

From embeds

0

Number of embeds

9

Actions

Downloads

7

Shares

0

Comments

0

Likes

0

×