Predictably Irrational: The Hidden Forces That Shape our Decisions

This is the first of two chapters to consider humans’ dishonest nature and focuses on the kind of dishonesty “committed by people who generally consider themselves honest” (273). To examine this kind of dishonesty in greater detail, Ariely set-up a study with four groups of students. The first group of students—the control group—had no way to cheat. They answered as many questions as they could on the exam, a standard multiple-choice worksheet, in 15 minutes. They then gave these worksheets to a proctor who graded it. The second group of students took the same test in the same time allotment, but they graded their own tests; students in this second group were given not only a worksheet on which to mark their answers, but a second worksheet with a grid that had the correct answers already marked on it. To grade their own exams, these students were to transfer their first worksheet answers on the grid and score themselves. Once they finished grading their exams, they handed their original worksheet and the final one to a proctor. The third group followed the same conditions as the second group, except they could shred their original worksheet. The final group shredded both worksheets, and they did not have to report their scores to the proctor. The conditions in the second, third, and fourth groups enabled Ariely and colleagues to push both groups’ integrity.

The experiment revealed that the second, third, and fourth groups all cheated about the same. Moreover, there were not just a few bad apples in each group; most students cheated when given the opportunity. The risk of getting caught cheating also did not influence the amount of participants who cheated, since all three groups cheated equally.

Ariely argues that while “we care about honesty and we want to be honest” (279), humans’ internal honesty monitor only activates when they are considering large lies. Moral benchmarks, however, seem to encourage honesty, even when a person is given the chance to cheat. These benchmarks (such as oaths or rules) must be recalled around the moment of temptation.

The second of two chapters on dishonesty, Chapter 14 examines how cash curbs dishonesty. Ariely opens by telling the story of when he left a six-pack of Coke and a plate containing six one-dollar bills in a communal fridge in one of MIT’s dormitories. The Cokes disappeared within 72 hours, but none of the bills did.

To test why people are more dishonest with nonmonetary than monetary items, Ariely and colleagues designed another experiment. They asked students to solve 20 simple math problems in five minutes. Students received 50 cents per correct answer. There were three groups of students, and, while the study began the same for each group, the group conditions ultimately differed in the exam scoring process. The first group took their worksheet to an experimenter who corrected the exam and gave them their payment. The second group tore up their worksheets and told the experimenter the number of questions they answered correctly. They would then receive the cash. The final group followed the conditions of the second group, except they received tokens rather than cash for correct answers; the students would then walk over to another experimenter to exchange their tokens for cash. Ariely and colleagues wanted to see if the introduction of tokens, which are “valueless, nonmonetary currency” (298), changed students’ honesty levels. When given a chance to cheat, all the students took it. However, the students in the tokens group were twice as likely to cheat as those in the cash-only group.

While it is common knowledge that people cheat, most would not assume that people cheat more when nonmonetary objects are involved compared to monetary objects. Ariely underscores that people are all vulnerable to this temptation. For example, the clothing industry loses $16 billion annually from wardrobing, which is when a person buys an article of clothing, wears it for a while, and then returns it in such a state that the store cannot resell it. This costs the clothing industry an amount equal to automobile thefts and home burglaries combined.

In Ariely’s studies, “the participants were smart, caring, honorable individuals, who for the most part had a clear limit to the amount of cheating they would undertake, even with nonmonetary currency like the tokens” (304). Yet, Ariely points out that because most of the participants wanted to be ethical, they likely only captured the lower bounds of human dishonesty. If these experiments used participants who cared less about honesty, the findings might reveal higher levels of deception.

The last chapter presents one final experiment to illustrate “our predictable irrationality” (310). Ariely returned to a brewery. There were two conditions in this experiment. In the first condition, Ariely described a set of free beer samples and then took orders. Once he returned with the beer samples, he asked the people at the table to complete a short survey, which asked how much the participants liked their beer and if they regretted their choice. In the second condition, Ariely described the beers but then asked participants to write down their beer order instead of ordering aloud. He found that people ordered differently in public (the first condition) than they did in private (the second condition). When individuals order out loud, they order a greater variety of beer so that others at their table did not think they are copying them. Except for the first person to order, most individuals in the public setting were unhappy with their beer selection.

Ariely believes “these results show that people are sometimes willing to sacrifice the pleasure they get from a particular consumption experience in order to project a certain image to others” (315). This is not a universal human characteristic, however, but cultural. Ariely provides some advice, or “free lunch” (316), for how to ensure an order for the preferred dish. He suggests that when individuals go to a restaurant, they should know ahead of time what they want to order. They can also order first to ensure they get their preference or announce their order to the table so they can stake their claim.

The text’s final experiment supports Ariely’s central hypothesis: People are far less rational in their decision-making processes than conventional economic theory argues. While behavioral economics might seem depressing since it argues that humans are predictably irrational, these irrational decisions provide opportunities for improvement; these opportunities are also known as “free lunches” (318).