Why People Cheat and Lie

There are a few bad apples that cheat a lot, but surely most of us are honest people who'd never cheat, right? Not according to research study by Duke University Economics professor Dan Ariely. His study showed that almost everybody cheats just a little.
In a series of experiments, Ariely was able to increase or decrease the ratio of cheaters:

Much of what we have learned about the causes of dishonesty comes from a simple little experiment that we call the "matrix task," which we have been using in many variations. It has shown rather conclusively that cheating does not correspond to the traditional, rational model of human behavior—that is, the idea that people simply weigh the benefits (say, money) against the costs (the possibility of getting caught and punished) and act accordingly.
The basic matrix task goes as follows: Test subjects (usually college students) are given a sheet of paper containing a series of 20 different matrices (structured like the example you can see above) and are told to find in each of the matrices two numbers that add up to 10. They have five minutes to solve as many of the matrices as possible, and they get paid based on how many they solve correctly. When we want to make it possible for subjects to cheat on the matrix task, we introduce what we call the "shredder condition." The subjects are told to count their correct answers on their own and then put their work sheets through a paper shredder at the back of the room. They then tell us how many matrices they solved correctly and get paid accordingly.
What happens when we put people through the control condition and the shredder condition and then compare their scores? In the control condition, it turns out that most people can solve about four matrices in five minutes. But in the shredder condition, something funny happens: Everyone suddenly and miraculously gets a little smarter. Participants in the shredder condition claim to solve an average of six matrices—two more than in the control condition. This overall increase results not from a few individuals who claim to solve a lot more matrices but from lots of people who cheat just by a little.

Interestingly, increasing the payoff or the probability of being caught has no effect on making people cheat more.

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