One of my favorite books is Predictably Irrational, written by Dan Ariely, an economist and true social scientist. Dan is a master at organizing experiments to test theories and ideas. Being from Israel, he had a theory that Israelis cheat more than Americans. He designed an experiment in which test takers were paid $1 for each correct answer, but were allowed to self-report. So the more you lie, the more money you get. He found that there is no difference between Israel and the US, or among a number of other nations he tested.
So he’s tried something else. He tested bankers in NY and politicians in DC. Who do you think cheated more?
If you paid attention to the incentive for cheating, the answer becomes obvious. Bankers cheated more 2:1. Dan doesn’t offer much speculation about why, but this particular test may have been using the wrong incentives.
If you look at the study you’d find that the testing isn’t perfect because it was done in bars expected where bankers and Jr politicians are working and probably frequent. But let’s assume that the testing is perfect and that bankers and politicians were tested fairly and paid a dollar for each answer they get right. In my eyes, politicians are just as likely to cheat as bankers, but they’ll cheat for different gains.
In banking it’s clear what the incentive is. Make money, get money. So when someone sees they can make money by cheating on a test, they’re more likely to do it. Bankers are motivated by money.
But politicians have different motivations. Sure, plenty of them are motivated by money, but not as much as bankers. Many politicians give up higher paying jobs to work in DC. This goes from high up levels all the way down to the little guys working on campaigns. They want to get paid, but they are giving up certain amounts of pay for something else in return. Is it power? Is it social status by way of a high visibility job? Does it have to be internally motivated? No, they could be giving it up for some kind of altruistic endeavor, but even then their compensation is feeling good about themselves (there’s nothing wrong with that).
So, what if we could devise a system where the politicians were paid in some kind of equivalent value of a dollar to a banker? What would we find then? I think you would find they’ll cheat as often as a bank does, or as often as anyone does.
It just so happens that when sampling an entire population, using a dollar is a good incentive. But when you divide the population, the dollar may no longer be the right motivator. Would rich people cheat for a dollar as often as poor people? I don’t know. Maybe Dan can tell us; and I can’t wait until he does.
Be sure to read Dan’s post about cheating, and just read his blog, I love it.
Photo: Glenn Harper
 By The Weakonomist |
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