All language subtitles for 1_DisHonesty.The.Truth.About.Lies.2015.720p.WEB-DL.x264-iKA_English

When I lied on the application

I just thought

I was doing what was

in the best interests

of my daughters.

I was like

the big man on campus.

It kind of got a little

easier with each one

that I did after that,

to the point where

it started to feel

a little bit comfortable

and there was nothing

wrong with doing it.

I knew it was wrong.

I didn't know

how illegal it was.

I figured it was illegal.

I just didn't think

I was gonna get caught.

When you have that mindset

or when you think

that everybody else

is doing it,

it makes it lot easier

to consider what

you've done as legitimate.

I'm pretty sure

I convinced myself

that I wasn't harming

anything or anyone.

A white lie now became

a huge black lie.

You know, "She's such a liar."

I wasn't the slut,

I wasn't the partier,

I wasn't the bad girl,

I wasn't the druggy.

I was a liar.

At a certain point,

the monster's so big

that it doesn't

need you anymore

and you can't control it

and you just hope

that it doesn't eat you.

I even asked my lawyer,

I mean, "I'm certainly

not gonna go

to jail for this?"

(CHUCKLES) I mean,

"What do they do

with guys like me?

"They don't send me to jail.

"Can I pick a paper

on the road?

I mean, what am I gonna do?"

And he says,

"No. They send guys

like you to jail."

While I wished

I didn't have to

go through that

I understand now,

"Oh, okay,

I'm not the only one."

You know?

This is a deeply

human experience.

(BIRDS CHIRPING)

(INDISTINCT CHATTER)

My name is Dan Ariely

and I'm interested

in human behavior.

I'm interested in rationality

and irrationality.

I'm interested

in the cases in which

we make good decisions,

and the cases

in which we make

bad decisions.

Together with

colleagues and students,

we run hundreds of experiments

to try and understand

human behavior.

And in the last few years,

we've been focusing

on dishonesty.

I find myself,

especially here at school,

um, lying a lot

about, I guess

not really lying,

but, um, I guess...

I don't know.

Oh. Sometimes I, like,

put on fake accents.

I've convinced several people

that I'm from Russia.

Well, I guess I've lied

to my parents before.

I had a girlfriend

in high school.

It's hard to find time

with your girlfriend.

So, I've done

that whole thing.

I think we all have,

a few times.

DAN ARIELY:

My research falls within

the field called

behavioral economics.

And behavioral

economics challenges

many of the assumptions

of standard economics.

In standard economics,

we assume that people are

perfect decision makers.

That we can compare

all the options,

that we don't have

any limitations

of cognitive capacity.

Behavioral economics

doesn't make any assumptions.

Instead, what we do is,

we put people in

different situations

and we just see

how they behave.

And what we see happening

in those experiments is that,

often, people

don't think long-term.

People are

myopic and vindictive.

We find that people

are not able to consider

all the options

and we also find that

they don't always

behave in a perfectly

rational way.

I first became interested

in irrationality

as a result of

a tragic accident.

When I was a teenager,

I participated in the

Youth Movement in Israel.

And we were preparing

for a celebration

and we had these

magnesium flares

that were supposed

to light up the arena.

But instead,

one of them

exploded next to me.

And, as a consequence,

I was burnt on over

70% of my body

and I spent

the next three years

in hospital.

The worst part of my day

was the process of

removing my bandages.

The nurses believed

that the right

approach would be

to rip the bandages off,

one after the other

as quickly as possible

to get it over with.

And I, as somebody

who suffered this

excruciating pain,

wanted them to

do things slower.

Take more time.

Give me a break

from time to time.

But, of course,

they ended up doing

what they thought is

the right thing to do.

And the longer I stayed

in hospital, the more

frustrated I became.

And the more examples

of irrationalities

I would see all around me.

The study of irrationality

became my profession, my hobby

and the focus of my life.

When I left the hospital,

I started studying

at the university.

I didn't have much

money for research.

So I went to

a hardware store

and I bought

a carpenters' vise.

And I set it up in the lab

and I asked people to come

and put two fingers

in this vise.

(LAUGHTER)

And I would crunch

people's fingers

just a little bit

for different durations

and intensity

and patterns over time

and I would check

their preferences.

"How painful was this?"

"Which pattern would

you prefer?" and so on.

I learned that

the nurses were wrong

in systematic and

predictable ways.

They were focusing on

shortening the duration

when, in fact,

they should have tried

to minimize the intensity.

And from that point on,

I started looking

at all kinds of ways

to think about

irrational behavior.

How we think about money

and health and savings,

and how we procrastinate,

and all kinds of things.

And among one of those

was the question

of dishonesty.

When we started

looking at dishonesty,

my colleagues and I

thought this was just

another example of

human irrationality.

Another example

of the mistakes

that we all make

that we don't

understand very well.

But the world around us

seemed to be telling us

that this is actually

a more important

topic to study.

We watch corporate

scandals everywhere.

Enron, WorldCom,

the financial crisis of 2008.

We saw an increase in cheating

in professional sports.

INTERVIEWER: Have you

ever used steroids?

No.

I have never used steroids.

I have never doped.

We witnessed

political deception

and its huge repercussions.

Well, we don't torture people.

Let me say that again to you,

we don't torture people.

It appears that there

were not weapons of

mass destruction there.

MAN: You said you

knew where they were.

I did not.

I said I knew where

suspect sights were.

Does the NSA collect

any type of data at all

on millions or hundreds

of millions of Americans?

No, sir.

WYDEN: It does not?

Not wittingly.

ARIELY: All of a sudden,

the world was telling us

that it's more important

to understand dishonesty.

And not just to understand

what's causing it,

but also to understand

what we can do

to try and curb it

and reduce it.

How many people here

have lied at least once

since the beginning

of 2014?

(AUDIENCE LAUGHING)

How many people here

think of yourself,

in general,

as honest,

wonderful people?

(LAUGHTER)

The same group.

How can it be?

How can it be that

at the same time

we think of

ourselves as honest

and then we recognize

that we are dishonest?

It turns out it's

all about rationalization.

On one hand, we want

to look in the mirror

and think that

we're good, honest,

wonderful people.

On the other hand,

we want to benefit selfishly

from being dishonest.

As long as we cheat just

a little bit, we don't

have to pay any price

in terms of the image and

the way we view ourselves.

And we call this

the fudge factor.

So this is the ability

to misbehave

and think of ourselves

as good people.

And you can think about

all kinds of ways

in which, in your own life,

you have a fudge factor.

The speed limit.

May be it says 55,

but are you okay

in driving 60?

What about cheating

a little bit on taxes?

What about exaggerating

their online dating profile?

(LAUGHTER)

Across many studies,

we find that

everything that changes

the fudge factor

also changes people's ability

to be dishonest.

There are dozens

of elements that can

change the magnitude

of the fudge factor.

And we've been able

to observe many

of them in the lab.

For example, if you

can say to yourself,

"Everybody's doing it,"

it's easier for you

to rationalize to yourself

that this is actually

an okay thing to do

and cheat to a higher degree.

My name is Joe Papp

and I was born

in Cleveland, Ohio.

And I was

a professional cyclist.

I was utterly crazy

for cycling. I loved it.

Hey, now get the...

Watch the tire compress.

I started bike racing

my first year

of high school.

There we go.

BOY: Come on, Joe.

GIRL: Come on, Joe.

I competed

for the University

of Pittsburgh's team

when I was

an undergraduate there.

And then, I took two

and a half years off

to compete for

the US national team

all over the world.

COMMENTATOR: And for

the sprint for the bronze,

moving into second

and it's Joe Papp.

(PEOPLE CHEERING)

PAPP: I had a really

successful season

and I went

to the Olympic trials,

actually.

But then,

the academic year was

starting in the fall

and there was a deadline

to register for classes

and I felt the need

to return to my studies.

So I stayed in school,

uh, through 2000,

when I graduated with

my undergraduate degree.

But couldn't get rid

of the bike bug

and I went back to cycling.

And so, I started

cycling again full-time

at that point,

and I'm not Lance Armstrong,

but I had been successful

at the professional level

for five or six years

before that.

And when I got

back into the races,

things were different.

Basically,

the races were faster.

There was one race

in particular

that I remember

in Massachusetts.

It was an event

that I would have

typically thought

that I had a chance

of winning

and, instead,

it took everything I had

just to be able to

stay in the field.

And that had never

happened before.

I remember crying.

Feeling like I was a failure

and how could this be and...

It took a couple of days

to process what had

happened really.

And I remember talking

to one of my

teammates on the phone,

and I remember him chuckling,

as if he was in on a joke

that I didn't know about.

And that was the point

when I learned about doping.

My teammate said,

"You should go see

doctor so-and-so.

"She'll take care of you."

And I met with this

doctor and I said,

"I'm a cyclist

and I can't match

"the performance of

these other athletes."

So she looked at my blood work

and, uh, she said,

"Yeah, we can

prescribe you EPL,"

which is a drug

that is given to

cancer patients

who're going through

chemotherapy.

It basically

forces their kidneys

to produce more

red blood cells.

But for an elite

endurance athlete,

once it manifests itself

it's phenomenal.

It's like night

and day, the change.

I can tell you exactly

how much this drug

improved my performance

and it was upwards

of 12 to 13 percent,

which is

a gargantuan improvement

in a sport that is decided

in terms of seconds.

(PEOPLE CHEERING)

PAPP: Not only did

I move up a level

in the sporting context,

but the doping

practices increased

in their sophistication,

and, uh,

and, uh, pervasiveness,

as well.

2006 is when I moved

to an Italian team

and I remember, many times,

the team manager's brother

coming to the hotel

with a small

stainless steel Thermos

and would start parceling out

to each rider

their own, uh, ampule,

their own pre-filled syringe

or their own pills.

And then the riders discussing

between themselves

what they were gonna use,

when, for and how.

Everyone was complicit in it.

You all have a shared interest

in keeping it quiet

and actually supporting

one another in it.

MALE REPORTER:

Professional cyclist

Joseph Papp said he felt

he couldn't win

without using

performance enhancing drugs

because so many

others were doping.

PAPP: I never would have

imagined myself doping.

But when you have that mindset

or when you think

that everybody else

is doing it,

or 70% of the other

people are doing it,

even if you don't

know that to be true,

it makes it lot easier

to consider what you've

done as legitimate.

ARIELY: In order

to study dishonesty,

we need to be able

to measure,

hopefully precisely,

the extent to which

people are dishonest.

So we have all kinds

of methods.

I'll describe one of them.

Thank you very much.

Uh, we're going to start.

Let's go to the lab.

You can just have

a seat anywhere

with a packet and

a pen in front of it.

We gave people 20

simple math problems.

WOMAN: Find the two numbers

that add up to 10.

These are problems that

everybody could solve

if they had enough time,

but we don't give

people enough time.

We're going to give you

five minutes to solve

as many as possible.

At the end of the five

minutes, please stop,

put your pencil down

and count how many

questions you got correct.

And now that you know

how many questions

you got correctly,

take the sheet of paper,

go to the front of the room,

and shred it.

People do that.

They come to the front,

they say they

solved six problems,

we pay them six dollars,

they go home.

Here you go. Thank you

for participating.

What the people

in the experiment

don't know

is that we played

with the shredder.

(AUDIENCE LAUGHING)

The shredder shredded

the sides of the page,

but the body of the page

remained intact.

(AUDIENCE LAUGHING)

And what do we find?

On an average, people

solve four problems

and report to be

solving six.

I solved six.

I don't know if

this is embarrassing

or not, but I got six.

I believe I got

seven right.

ARIELY:

We've run this experiment

on 40,000 people.

And so far,

we found about

20 big cheaters.

Those are people who

cheated all the way,

said they solved 20 problems,

and they stole

$400 from us.

And we also found

about 20-some-thousand

little cheaters.

And they stole about

$50,000 from us.

And I think this is not

a bad reflection of reality.

Yes, there's some

big cheaters out there,

but they're very rare.

And because of that,

their overall

economic impact

is relatively low.

On the other hand,

we have a ton of

little cheaters.

And because there

are so many of us,

the economic impact

of small cheating

is actually incredibly,

incredibly high.

I never told my kids

that there was a Santa Claus,

or an Easter Bunny,

or a tooth fairy.

I just refused to do that.

Because when

I was very young,

I went out to hide

in this little

chest of drawers

at the base of the stairs

to catch Santa Claus.

And saw that my parents

would put out

Christmas presents.

I was just shocked

that they had been

systematically

deceiving me

for years and years

and years,

and I don't think

I ever trusted them again.

GABRIELLA: My mother

makes a very special

cake for my father's birthday

called a dobos torte

which is

a Hungarian vanilla cake

with chocolate cream

going up nine layers

and then, at the very top

is this crunchy caramel.

And it is amazing.

(CHUCKLES)

Last year,

she gave the cake for me

to share with my children.

And I hid the cake

and ate it by myself.

(INHALES DEEPLY)

In second grade,

I had a little friend

named Irving.

And Irving was a big liar.

One day at lunch,

he's telling all

the kids at the table

that his father

owns a bazooka.

(CHUCKLES)

I was a little kid,

you know.

A bazooka was the biggest gun

that you could imagine.

And people at the table

said, "No, he doesn't".

And he turns to me

and says, "Yeah, he does.

"David, you've been

to my house.

"You saw the bazooka."

And I said, "Yeah, totally.

I've been to your house.

"Your dad totally

owns a bazooka."

And then I realized that

I had just told a lie

and I felt so bad,

but then I also thought,

"Wow, you really can't

trust people." (LAUGHS)

FRANCESCA:

Dan and I were sitting

in his office one day,

and in that

particular meeting

we were reflecting

on this idea

of the evil genius,

and the fact that

oftentimes it seems

that, uh, creativity

and dishonesty

come together.

(CAMERA SHUTTERS CLICKING)

At that time,

we were reading

news about the fact

that Bernie Madoff

was very creative

with his Ponzi scheme.

And so we started wondering

what creativity

does to people.

We ended up going into the lab

and studying that further.

We created situations

where people would be asked

to be creative,

or where creativity

was primed.

And then we asked the people

to use the matrix task.

And what we found was that

when people are in

a creative mindset,

they're more likely

to come up with lots

of justifications for why

what they're about

to do is morally okay

and is justifiable.

PR and marketing,

almost by their very nature,

involve the step on

to the slippery slope.

What do you do?

You have to create

something from nothing.

And because of that,

I kind of just made

it up as I went along.

I'd been reading this blog,

I thought it was really funny.

The blogger's name

was Tucker Max.

And the blog was stories

about drinking and hooking up.

It's this gonzo style

of storytelling

where this guy's going around

doing crazy things,

getting in all sorts

of trouble.

They're really

funny and hilarious,

but controversial

and messed up

and evil and awful,

all at the same time.

And, uh, I was attracted

to something in this writing

and I think

it was the honesty

and the authenticity

of the way

the author was

presenting himself

I was just sort of

fascinated by him.

I ended up

e-mailing the blogger,

and I say, like,

"I wanna work for you.

I'll do whatever you need."

There was talk that

he would do a book

and he didn't have

a publicist or anything.

I ended up working

on that campaign.

It was like, "Okay,

we have this book,

"I think people would like it.

"How would we get people

to know about it?"

And because we had nothing,

we could try anything.

I knew this one blog

linked to him a lot

and I was like,

"How've you got that?"

And he was like,

"Oh, I just send them

fake e-mails

"pretending to be

either a fan of my stuff

"or hating my stuff,

and I trick them

into linking about me."

So, it's like, "Okay, if that

worked with this site,

"would it work with

these bigger sites,

"would it work

with newspapers,

"would it work

with television?"

The book is called

I Hope They

Serve Beer in Hell.

And frankly,

there is not much in it

that can be repeated

on a nice family

show like yours.

Tucker Max, author of

I Hope They

Serve Beer in Hell.

Classy.

And so, we tried

all this new stuff

and it ended up working.

The book sold close

to two million copies.

After his book became

this big bestseller,

he ended up producing a movie

based on the book.

We'd seen how

effective controversy

had been with driving

sales of the book.

So it was like,

why don't we make this

one of those movies

that people boycott

and say, "Don't go see,"

because we knew

that our audience

would go see it

precisely because of that.

We ended up trying

these tactics of,

"Let's get people to protest.

"Let's make people horrified

so they talk about it more."

We would send

anonymous e-mails

to LGBT groups on campus,

women's groups on campus.

We designed these

really offensive ads.

There was jokes about midgets,

strippers, blind people.

I went out and I

vandalized these ads.

Um, I put these

offensive stickers

all over them.

Then I took photos and then

I leaked those photos

to these two small

blogs in Los Angeles.

They run this big story.

And then that

starts to get more

and more media coverage.

And then, people

started vandalizing

the billboards for real

in all these other cities.

(TYPING)

HOLIDAY:

My staff began calling

the Chicago Transit Authority

to protest about

these offensive ads.

(PHONE RINGING)

WOMAN:

Chicago Transit Authority.

HOLIDAY: They put out

an announcement that

they were banning

the ads from the city

and they were

pulling them off

from the buses.

Which is exactly

what we wanted

because now this

is a news story.

The Chicago Tribune

actually ran an editorial

lauding the CTA's decision

to pull the ads.

And now, it was this

sort of full-fledged

massive controversy.

(PROTESTERS CHANTING)

HOLIDAY: In New York City,

this group organized

a city-wide

protest/vandalization

of the billboards

and they invited

the media along,

so we got more press there.

It became difficult

for me to know

where the line was.

She wants me to

sign her underwear.

HOLIDAY: What we were

doing was generating

chatter about the movie.

But if you step back

and you look at it,

it's like you're deceiving

more and more people,

and then once it started,

it couldn't stop,

and it just carried on

under its own power.

ARIELY:

There's another version

of the fudge factor

in which we

convince ourselves

on all kinds of things that

are not perfectly true.

For example,

the vast majority

of people believe

that they're better drivers

than the average.

The vast majority

of people believe that

they have less chance

of dying from a heart attack

and cancer and

all kinds of things.

We have these

over-optimistic beliefs

about ourselves.

And we convince ourselves

that this is

actually the truth.

Self-deception starts off as,

we know we're

lying to ourselves.

Or we are aware

that we're engaging

in rationalization,

for example.

And after a while

we just believe

what it is that

we're telling ourselves.

So that is basically

the optimism bias

and we see it

in 80 percent

of the population.

Self-deception

has both positive

and negative consequences.

I think, on average,

the positive must have

outweighed the negative

for us to evolve

to be able to self-deceive

and do it quite a lot.

MICHAEL NORTON:

So we have

people take this test,

and, um, some people

don't have the answers and

we see how well they do.

And these are hard questions,

so they don't do very well.

Other people,

we give them the test,

and we give them

the answers at the bottom.

We say, "Check them

if you want. Up to you."

They do terrific

on the test.

But we give them

another test. So we say,

"Here's some new questions

"and, by the way,

there's no answers

at the bottom this time.

"How well do you think

you're gonna do?"

And they don't

correct at all.

They just think that

they're amazing

test-takers now,

and we can even pay them.

We can say, "Look,

if you guess how many

you're gonna get right,

"we'll give you

a lot of money."

No change at all.

They just believe.

They've deceived

themselves into thinking,

(LAUGHS) "I'm

the greatest test-taker

in the world,"

and we can't get them

to stop doing it.

This process of

deceiving ourselves

is so strong,

and it happens to us

so quickly, where

we have a twinge of,

"Maybe I cheated," and then,

"No, I didn't. I'm a genius."

And then, "I'm a genius

for the rest of my life."

It's so powerful

and so strong in us,

this impulse.

I can tell immediately

when someone's not

being honest with me.

It made me an excellent

admissions officer.

I expelled one person

because he had somebody else

take all his SATs for him.

And it was pretty

clear that was true

because he couldn't

pass anything.

What I see happening

in the world

is that children

are more and more

being encouraged to be

something other than

who they truly are.

The college admission process

is definitely

a big offender here.

So,

um,

when I'd first applied

for the job at MIT

I wrote then that

I had gone to this

other school where I was

actually taking classes

instead of my college.

I was taking classes

at RPI in Troy.

And I said,

I just sort of

morphed that into,

"Oh, I went there for

undergraduate school,"

I just sort of morphed it.

I felt that,

at a place like MIT,

they wouldn't accept me

if I'd come from, you know,

a Catholic girls' school.

I kept getting promoted.

And I got a call from someone

from the American

Academy of Pediatrics.

Would I join him

in writing a book?

Yeah, absolutely.

I was on television,

I was on the radio,

I was in newspapers,

I was in a lot of places.

I want us to start

another revolution tonight

because I want us

to be able to give

our childhood back

to our children.

Often, you know, you...

People would get a bio

or they'll introduce you

a certain way,

you know, and things just...

Some people think

you have a Masters,

some people think

you have PhDs,

some people this,

some people that,

and, you know, whatever.

For me it was just,

"Okay, well,

"they're saying

what they're saying,

I don't care. Here I am."

They frequently

called me "Doctor," 'cause

that's just how it was.

It seems that

someone had said,

"Oh, she was passing

herself as a PhD."

Well, then things began

to unravel pretty hard.

Marilee Jones resigned today

as Dean of Admissions at MIT

after 28 years at that

prestigious school.

In a statement today she said,

"I am deeply sorry for

disappointing so many

"in the MIT community

and beyond."

MARILEE:

I wasn't allowed to see

any of my staff members.

I was like a persona

non grata on campus,

and I kept thinking,

"This is me."

I kept saying, "People,

it's me. It's me.

"You've known me for years.

I'm the same person."

And suddenly,

I was on the other

side of the wall.

What just happened to me?

Who am I?

It sent me right down.

Right down deep, where

I'd never really been.

(CHATTERING)

I think a really

important skill is

to be good at lying.

(LAUGHTER)

If you do it in a really

good way, then you

don't have to worry

about them catching you.

So that's why I

think it's good

to be good at lying.

Sometimes you also

have to lie, in a way,

because you are

making somebody happy.

Like, if you're throwing

a surprise birthday party,

then that means

you're obviously trying

to help and get ready

or do something.

And so, you're lying

to your friend

to help them have

a good birthday.

All creatures,

uh, big or small,

uh, have deception as part

of their armamentary.

Oftentimes it's just survival.

A plant or a bird

might change color

and camouflage itself,

which is a form of deception.

The bigger the brain,

the larger

the capacity to lie.

Chimpanzees, for example,

have been known

to lie where they

may lead their group

away from where the food is,

so that that one

particular chimpanzee

can come back

to the food later on

and find that food.

It's very common for

younger children to fib.

And for them,

it gives them pleasure,

it helps them imagine things

and it helps them

build their brain

and helps them build what

is called the theory of mind.

A psychological theory

by which,

as our brains mature,

we're able to

predict and imagine

what the other person's

thinking about.

And unless children lie

and unless children

imagine and dream big,

they may not have

the full capacity

to develop the theory of mind.

A lie is like a knife.

So if you use the knife

to stab somebody, it's wrong.

If you use a knife

to put some butter

on your bread,

there's nothing

wrong with it.

Once I flew from

Berlin to Milano.

We got into many

kind of, like...

Air pockets... I don't know.

It was very,

very bad kind of flight.

At some stage,

I hear this woman

start crying

and shouting in Italian.

She was about 50 years old.

She had a big cross

on her neck.

And I look back to

the flight attendant

because I expected

somebody to go to her.

When I looked back I saw

the two flight attendants

sitting in the back

and crying.

And this woman kept shouting

in Italian and crying.

And I said to myself,

"Something must be

done about this woman."

And there's

an empty seat

next to her.

So I unfastened

my seat belt,

I get next to her

and I fastened my seat belt.

I hold her hand

and I said to her,

"Look at me,

do I look scared?"

And she said, "No,

why aren't you scared?"

And I said, "Because

from all the people

in this plane,

"I'm the only one

who is

an aeronautics engineer.

"I'm only one that knows

"that we are on the safest

passenger airplane on Earth,

"and it doesn't feel right

but nothing bad is

gonna happen to us."

And she looks at me

and takes some breath,

but she's still kind

of crying, actually.

(PANTS) And she

starts breathing

and she still holds my hand

and she said,

"Jesus sent you to me."

She said to me,

"What's the probability

"that from all

the people on Earth

"an aeronautic engineer

would sit next to me." So...

So this is

the kind of lies that

I have no moral

problem lying about.

Because I think that

even if we would have died,

I think dying

while you're hysterical

is less fun

than dying while

somebody next to you

tells you a nice lie.

We grow up in this

social world in which

our parents teach us

about how to have manners,

and how to care

about other people,

and how not to

point at people,

how not to say

all kinds of things.

And we learn that

a little bit

of lying is okay.

In an experiment

we're conducting right now,

we get people to lie

and we connect them

to a lie detector.

Lie detectors basically

detect emotional arousal

when we feel uncomfortable.

And when people

cheat for themselves,

the lie detector tells us

that they're lying.

There's no problem

detecting it.

But sometimes we ask people

to cheat for a charity.

And then the lie detector

is silent.

The lie detector

doesn't catch anything.

Why?

Because if we

could justify that

we're doing something

for a good cause,

there's really no arousal,

there's no conflict,

there's no

emotional problem.

My name is

Kelley Williams-Bolar,

and I'm from Akron, Ohio.

When my oldest daughter

was in junior high

and my youngest daughter

was in second grade,

I had concerns with

the quality of education.

The schools were not

at the academic level

that they needed to be.

My father and I lived

in two different

school district areas

no more than three miles

away from each other.

I made a decision,

me and my father,

that I would enroll my kids

in his school district.

And as I was

filling out the paperwork,

I do remember just thinking

"What's the possibility

"that I will get into

serious trouble?"

My daughters

loved that school.

They taught the children

how to be

focused academically.

They were there

for a full year.

And then the treasurer

of the school called

my dad's house,

and I answered the phone.

He asked me,

"If I was to come there

"right now, would you

be sitting there?

"Would you be there?"

And it just so happened

I was there.

So I was like, "Yeah, come.

"If you need to come

to see if I'm here,

then I'm here."

I received a letter

from the treasurer

and the superintendent,

"We have clear and

convincing evidence

"that you do not

live or reside

"at 1373 Black Pond,

Copley, Ohio

"and we have a meeting for you

"and we would like for you

to come to the meeting."

And I remember

going to the meeting.

I don't know how

many men it was.

Four men.

Superintendent, treasurer...

To solve this problem.

KELLEY:

And they had attorneys there.

I did some things wrong,

but I love my kids.

And I remember

still trying to say,

"No, they live there,

they live there."

And that became difficult.

Because it's like

you bury yourself more.

Deep inside I was

thinking, "Golly, this is...

"This is just too much."

They were pretty upset.

Basically,

"You can take your children

and go to another school."

I said, "Okay, that's fine."

They don't want them there.

I just took the kids out.

Roughly two years later

I get an indictment

to go to court.

BAILIFF:

The court of common pleas

is now in session.

KELLEY: They wanted

criminal charges.

I need to be

there for my kids.

I need to be

a supporter for them.

Unfortunately,

the means don't

justify the end.

The verdict was guilty.

BAILIFF: All rise.

(KELLEY SOBBING)

KELLEY: My daughters knew,

I explained to them

what happened.

Because I wanted them

to see the effect of lying.

You have a small

twist in a story

and it can become...

It can become, uh,

a huge impact in your life.

ARIELY: I own

a vending machine.

I set it up to

a price of zero.

So what would happen?

You would put your money,

you would press on

the candy you want,

you would get the candy

and the money.

First of all, I put

a big sign that says,

"Here's the number to call

in case the machine

is not working."

(AUDIENCE LAUGHING)

How many people called?

Zero. That's right.

How many candies

did people take?

Nobody took

more than four.

(AUDIENCE LAUGHS)

The majority took

three or four, like

five would be cheating.

Three or four

is kind of okay.

(AUDIENCE LAUGHING)

I think that what people

were basically doing is

rationalizing

their vending karma.

What people were saying

is, "I remember some

vending machine

"that took my money before,

(AUDIENCE LAUGHING)

"and that vending machine

has to be a close

relative of this one."

So the other thing

that people did was

to call their friends.

(AUDIENCE LAUGHING)

And I think you can see

the intuition, right?

So, if one of my

friends is coming

and doing it as well

it's more

socially acceptable

all of a sudden.

In one set of experiments,

we got people to

work as a team.

So, imagine you and I

are working as a team.

And when I cheat,

you get some of it.

Then when you cheat,

I get some of it.

What happened now?

Cheating goes up.

(HORNS HONKING)

My name is Garrett Bauer,

44 years old.

And I used to be

a professional

stock trader.

I loved trading.

It was more fun

than almost anything.

Doing a really smart trade

was more important to me

than even making money.

When I first

moved to New York,

uh, I met my first friend

and his name was Ken.

I knew he knew a lawyer.

I'm Matthew Kluger.

I worked at a very

prestigious firm

that represented some

of the biggest names

in corporate America.

I had known Ken Robinson

for a couple of years.

We talked to each other

on the phone.

He said, "So you're working

on these high-profile deals?"

And I said, "Yes."

He said, "So let me

get this straight.

"You kind of get to read

tomorrow's paper today."

And he said, "You know,

that information could be

valuable to someone."

And I said. "Yeah,

but it's very risky.

It's highly illegal."

Ken said, "I have a friend

who's a big day trader.

"Who could take

that information

"and use it to

a great advantage,

"but could probably

avoid detection

"because he does

a lot of day trading."

We set up a meeting

on the street corner

and talked for maybe an hour.

By just entering

into a discussion

of the possibility

of doing this,

I was crossing the line,

but it didn't feel like

that at that point.

Bauer put me at ease

that what we were doing,

the wrong,

was "A," common,

and "B," not really

hurting anybody.

Insider trading information

is passed around,

if it's not daily,

it's weekly.

KLUGER: There are a lot

of people out there

who are becoming privy

to inside information

and using it to trade.

BAUER: Everyone's

trading on this stuff.

There wasn't one

person in my office

that wasn't.

I passed information

and the scheme gelled.

BAUER: Matt would

call Ken with

information somewhat like,

"We think IBM is buying

Sun Microsystems."

Then they would tell me

how many shares.

We'd subtract the tax rate,

I'd pay the taxes,

and then we

would get the cash.

I did not expect it to

take on a life of its own,

and then it took on

a life of its own.

(SIREN WAILING)

One night,

Ken called me and said

his house had been raided.

I don't remember everything

he said on that call,

but I remember thinking

that some of what he said

was a little suspicious

and was wondering,

"Is it possible

someone is listening,"

but I dismissed that

as being paranoia.

And I was arrested

the next morning.

I sit up out of bed and

I hear someone say, uh,

Garrett Bauer, where are you?

Clearly, I'm thinking

it's pretty serious

when you have that many

FBI agents in your apartment.

WOMAN: Federal

prosecutors have charged

two men with an

insider trading scheme

that went on for 17 years.

Our investigation

has documented

more than $109 million

in illegal trades.

FEMALE REPORTER:

Bauer and Kluger

pleaded guilty to

securities fraud,

conspiracy to

commit money laundering

and obstructing justice.

I was curious.

Are there more men,

over-represented

in large cheaters

than women?

Yeah, so first of all,

this is a great question.

So the question is,

are there

gender differences

between cheating

in men and women,

and there are

huge differences.

Huge differences.

And the difference

is that only women

ask this question.

(LAUGHTER AND CLAPPING)

But in terms of cheating,

there's no difference. Now...

(AUDIENCE LAUGHING)

MIRIAM NOVALLE: I was

sitting in the lounge,

charging my phone,

and all of a sudden

you hear the announcement,

"Your flight's

about to take off."

So I run out,

and I get to my flight,

and I sit in my seat,

and I realize as

the door is closing

my phone is in

the charger in the lounge.

I run up to the girls

in the front,

the stewardess, but she said,

"You must sit down, Miss.

We're just taking off..."

"No, you can't.

My phone is in the lounge.

"I'm sorry. Listen,

I work for CNN News.

"I'm on the air tomorrow,

and I need to have my phone

"because everything that

I've just worked on

is sitting in this phone."

Guess what?

The plane went back,

they got my phone,

a woman hands me my phone,

and everyone in the place

looks at me and goes,

"Who the fuck is that?"

FRANCESCA: In one project,

Dan and Shahar Ayal and I

decided to look at

what's the influence of

others' unethical behavior

on our own

decisions to cheat.

So we designed an experiment

with different

types of conditions.

So imagine the same experiment

I described to you before,

but with one

main difference.

We hired an acting student.

And 30 seconds

into the experiment,

he raises his hand.

Yeah, I got all of them.

What do I do?

And they say,

"I solved everything.

What do I do next?"

WOMAN: You should

come up here and...

ARIELY:

Now, this is 30 seconds

into the experiment,

you're still on

question number one.

(AUDIENCE LAUGHS)

There's no question

in your mind that

that person is cheating

and the experimenter said,

"You finished everything.

You're free to go."

And you see

that person taking

all the amount of money

and going home.

What would happen

to your own morality?

Well, lots more

people cheat.

But it could be two

explanations here.

One explanation is

we just proved to people

that in this experiment,

there's no downside

for cheating.

The second

possibility is that

it's not about the fact

that they wouldn't catch you,

it's about the fact

that it's actually

socially okay.

WOMAN: Thank you

for participating.

And so we decided

to study this

by looking at whether

the person cheating

is somebody like us,

or somebody we

feel similar to,

or somebody who's

very different from us.

ARIELY:

We ran this experiment

at Carnegie Mellon.

Everybody was

a Carnegie Mellon student,

the acting student

was a Carnegie Mellon student.

We dressed the acting student

in a University

of Pittsburgh sweatshirt.

(AUDIENCE LAUGHING)

Now what happens if

you're a University

of Carnegie Mellon student

and the Pittsburgh

student cheats?

(AUDIENCE LAUGHING)

You still know that

you can get away with it.

Here's the proof that

somebody goes home

with all the money,

but you don't think

that people like

you are doing it.

And what happens now?

Cheating goes down.

So, it's not about

the probability

of being caught.

It's about the question

of what is

socially acceptable

in our circle.

My name is Erika Nelson.

I am from Florida.

I'm married to

my husband Kenny.

And we have a total

of six children,

and him and I have

two children together.

He has a really good heart,

and we had a really

good relationship.

But to go from nothing

to having six children,

you know, was a lot.

So, he kind of, like,

dove into his work,

and we weren't having sex,

we weren't, um...

We weren't even talking.

It was all about the kids

and then his work,

and that was really it.

And I was just

kind of, you know,

wiping butts from

the moment I got up

to the moment I went to bed,

and that was kind of my life.

You're just gonna

change, too.

(FROLICKING)

(LAUGHS) A good day,

I had a bra on.

It was my dress-up day.

I kind of just

got lost in that.

But I really loved my husband,

and I wanted to make it work.

So, I would try

to talk to him,

and no matter what I say,

it doesn't seem to

get through to him.

Nothing changes.

I even went to him

crying the last time,

and I said, "Look,

I need more than this,

you know, in my life.

"And I love you enough

to tell you this

"because I don't

wanna ruin this."

And, um, he's like...

(SHRUGS)

(LAUGHING)

Not that he was indifferent.

I just think that he thought,

"We'll get through it."

I didn't take it like that.

I took it as

a slap in the face.

Ashley Madison is a website

for married people

or people that are

in a committed relationship

that want to have

random sex,

or hook-ups, or whatever.

I think that that's an appeal

to Ashley Madison.

You know that everybody

knows that you're married.

So there's not

that awkwardness.

You check your area,

and we live in a small,

little community

and there's like, hundreds

of people on there.

And it's easy to kind of mask

um, the reality of

what you're doing, too,

'cause you're behind

a computer screen.

I talked to one guy.

We had, actually, a really,

pretty good friendship

um, for a few months.

And then it got

more into, like,

intimate conversations,

and talks, and then,

"Let's meet up."

He would take me

to fancy restaurants,

I would get dressed up,

and I'm thinking, "Wow,

this should be awesome.

"I can have, like,

this whole home life

and I can be the good parent,

"be the good mom,

and then I can have

this whole other life

"of jet setting

and wearing bras

and dressing up,

"and wearing makeup

and doing your hair."

Polar opposite of what

I had going on at home.

And I think I almost

was more attracted to that

than anything else.

And I would lie and

say that I was just

gonna go to hang out

with my friend,

or I was gonna

visit my parents

or whatever, to see him.

So, I think...

I think that

even when you know

it's wrong, the immediate

gratification suffocates

what you know is right.

So, I came home one night

and I asked my husband,

"Are you going out of town

this week at all?"

And he said, "Why?

So you can talk

"to him on the phone

while I'm not here?"

And I just said,

"How did you find out?"

And he kind of walked away,

and I followed him upstairs.

I didn't know how long

he had known,

I didn't know what he knew,

so all these questions

were in my head.

And he said,

"You left up an e-mail."

And he said,

"I came in the office,

"and the e-mail was up

from the night before

and I read all of them."

And I said,

"Look, I was gonna

"get attention or whatever

from somebody else,

"as messed up as that is,

that's how I am,

"and I don't know

how to get over that.

"So I need your help

or I need somebody's help,"

I said, "But I don't wanna

mess this up between us."

I saw how hurt he was.

And my husband

didn't deserve it.

Um...

I deleted my account that day.

ARIELY: So as I told you,

I was badly burnt,

and when I came

back to the hospital

maybe four or five years

after I was released,

the head of the burn

department finds me

and he said,

"Dan, I have a new,

fantastic treatment

for you.

"Come with me."

I go with him and

he explains to me

that when I shave,

I have little black dots

on the left side

of my face, stubble,

the right side of

my face is burnt,

there's no hair,

there's no stubble.

And he can fix

this asymmetry.

How? He's going to tattoo

the right side of my face,

(AUDIENCE LAUGHS)

until it would fit

the left side of my face.

And he says,

"Go home, shave,

come back tomorrow,

"by noon you'll

be symmetrical."

So I drive home and

I think to myself,

what kind of shave

should I aim for?

What would give me

the most hours of symmetry?

The early morning shave,

the afternoon shadow

what's the right shave?

Anyway, I shave,

I get to his office,

and I say, "You know,

I'm not so sure I want this.

"I'm not so sure

it's for me."

And then he looks

at me and says, "Dan,

what's wrong with you?

"Do you enjoy

looking non-symmetrical?

"Do you get some

depraved pleasure

from looking different?"

Anyway, I left

and I went to his

deputy and I said,

"What's going on?

Where's this guilt

trip coming from?"

He says, "Well,

we've done it on two

patients already,

"and we need a third

for an academic paper."

(AUDIENCE LAUGHS)

And I'm kind of

an ideal client, right?

Half the face burnt, half not

would come out

really good in his paper.

Now, here's the thing.

It's really easy to think

about this physician

as being evil.

But this guy was

an amazing physician.

I really loved him,

I owe him a lot.

But, nevertheless,

at that moment he had

a conflict of interest.

On the computer screen,

you'll see a square.

It'll be divided into two.

There'll be a right half

and a left half.

We're going to flash

some dots in the square

just for half a second.

Your task,

if you're a participant

in the experiment,

is just to tell me

which side of

the line has more dots.

And it's usually

pretty obvious which side,

there's like a lot here

and not very many here.

ARIELY: Now,

there's one more thing,

we're not going to

pay you the same amount

for the right

and for the left.

But regardless

of the amount,

your task is to, basically,

be as accurate

and truthful as possible.

Ready? Go.

The dot task is

a basic experiment

in conflicts of interest.

Very, very few people start

by lying egregiously.

But if the dots

are kind of similar,

just slightly more

to the left,

they would say "Right."

Almost any moral conflict

you can think of as,

there's a line and

you have to decide

whether you're gonna

cross it or not.

You kind of want to

go to the other side

and you kind of know

what the right side is.

Maybe I'll go

to the other side

sometimes.

My name is Tim Donaghy,

I grew up in Havertown,

Pennsylvania.

My father

was a college

basketball official,

and because of that

and because of

my love of sports,

I followed in his footsteps

and pursued a career as

an NBA basketball referee.

The NBA's a much

different game,

if you will,

from high school and college,

even though a lot of the rules

are written the same,

they're not enforced the same.

I started to referee

based on the rules

and how they're written

in the rule book.

MALE COMMENTATOR:

Tim Donaghy,

the rookie official,

is calling it very tight

here in the early going,

a lot of offensive

fouls and picks,

so, they're calling it

by the rule book.

TIM: Unfortunately,

I saw some people

that were moving up

a little bit quicker than me.

I'd learned from the veterans,

if there's a certain craft

and a certain way that

you have to do things

in order to advance,

and they'll tell you.

Certain players

are given the benefit

of maybe traveling

with the basketball

rather than other players.

Certain players are

getting the benefit

of not having

that critical foul

called on them

that would send

them to the bench.

MALE COMMENTATOR 1:

Rubio, gets a look,

good if it goes...

MALE COMMENTATOR 2:

Oh, my gosh,

that's just a horrible

call by Jason Phillips

who did not have

the courage to call that

against Kobe Bryant.

Wow. Awful no-call.

It's probably about

50-50 when you look at

calls that are enforced

by the rule book

and then calls that

are made or not made

based on star treatment,

pressure from coaches

at certain times.

What changed those

last few minutes

for your guys?

The guys with the whistles.

TIM:

I've never had conversations

with the commissioner

about what to call

in a game and what

not to call in a game.

But from

the operations department,

they clearly dictate.

Through video,

through e-mails,

through meetings,

what they want called

and what they

don't want called.

And it always seems to revolve

around the star players

or the big market teams.

Kobe Bryant's

a star in this league.

He puts a lot of people

in the stands,

he sells a lot of sneakers

and he sells a lot of jerseys.

And the fans pay

an enormous amount of money

to sit in those,

uh, courtside seats

and they want those type

of players on the floor,

that's who they came to see.

The bottom line is

it's more of

a form of entertainment

than an actual

athletic competition.

I don't think

the officials feel

that they're not

doing something

that's not right.

Because in their minds,

they're being told what to do

from the league office.

And if they're gonna

continue to advance

and get those big

playoff bonus checks,

you're gonna do what

the league wants.

MALE COMMENTATOR:

And Reggie Miller

who is a 90%...

TIM: Being an NBA referee

and being involved

in the planning

of how the game

was gonna be called

that night,

I knew certain teams were

gonna be at an advantage

or a disadvantage.

And it was just a situation

where I crossed a line

that I shouldn't

have been near.

I'll never forget

when the first

situation arose.

A friend of mine was

looking at the lines

in the NBA games

and he just asked me

to help him pick

some winners

and I remember

I was looking at

the master schedule

of referees that night

and I knew who was

refereeing certain games,

and I picked

some games for him

and the games did very well.

And he called me the next day

and we just had

a frank conversation.

I knew a certain line

was way off or I knew

a certain referee

was, uh, gonna give

special treatment

to a certain owner,

team or individual player.

So, I passed that information

along to my buddy

and he was shocked

that I could predict

the outcome of a game.

(AUDIENCE CHEERING)

(COMMENTATOR ANNOUNCING)

We would discuss

certain games

that we both liked

and, because of my

contract with the NBA,

I wasn't allowed to place

a bet of any kind.

So, he would

contact the bookies

and put everything

under his name

for both of us.

It got to the point

where we were gambling

probably three or four games

a week in the NBA.

As time went on,

I started to feel

guilty about doing it

and, basically,

I wanted to stop.

What I didn't realize

is my good friend

was passing this

information along

to people that were associated

with organized crime.

And they were,

basically, betting

an enormous amount of money

based on the information

that I was giving him.

They picked me up

outside a hotel

in Philadelphia

and, basically,

took me for a ride

in a car

and made it known

that they had been

getting that information

and it was going

to continue to come

and if not,

somebody would visit

my wife and kids,

down in Florida.

So, my quick thoughts

were to play ball

with them a little bit

and, hopefully, at the end

of this coming season

they would release me

from their grips and make

enough money to where

we could all just

wash our hands of this

and be done with it

and never do it again.

And I could continue

to keep my job

and just move in

a different direction.

MALE COMMENTATOR:

The San Antonio Spurs

are NBA World Champions!

TIM: What happens is,

as the season ends,

I'm back home

in Sarasota, Florida

getting ready to play golf.

And I get a call

from a friend of mine

who tells me that

the FBI's been knocking

on a lot of people's doors

and that the whole

scheme was discovered

over a Gambino wiretap.

And that they were asking

a lot of questions.

FEMALE REPORTER: Today,

former NBA referee,

Tim Donaghy

is expected to plead guilty

in federal court

in connection

with allegations that

he bet on games

in which he officiated.

(CAMERA SHUTTERS CLICKING)

We kind of

anecdotally know

that once you lie,

you're more likely

to lie again.

And probably the second lie

will be bigger than the first.

What we find in

the brain is that,

at the beginning,

if you lie a little bit,

there's a huge response

in regions

involved in emotion

such as the amygdala

and the insula.

The tenth time you lie,

even if you lie

the same amount,

the response

is not that high.

So while the lying

goes up over time,

the response in

your brain goes down.

We think that

the reason that

this happens

is because of

a very basic principle

of the brain.

Which is,

the brain adapts.

For example, if you're

listening to music

and it's quite low volume

and I turn it up,

like, two notches,

it will feel like

a really big difference,

right.

But if you're listening

to the radio and it's

really high volume,

and then I put

it up two notches,

you won't even feel it.

The brain is coding

everything relative to what

the base line is.

The same goes

with dishonesty.

If we're pretty much

honest people

and we haven't lied

and now we're

telling a lie,

the brain is coding this

as a really big difference

relative to our baseline.

But if we're dishonest

and we lie quite a lot,

the brain doesn't

respond so much.

After a while,

the negative value

of lying,

the negative feeling,

is just not there so much.

Which kind of

makes you just lie

more and more and more.

My parents, uh, they

grew up in the Bronx

and they placed

a lot of emphasis

on getting me

and my two brothers

around the kitchen table,

every night, for dinner.

The role that I grew into

was an insane fabulist.

I just lied constantly.

I was down at

the basketball court

and, uh, Karim Abdul-Jabbar

showed up

and I smacked his

shot away and I said,

"Get that sky-hook trash

out of my face, Karim."

My family would

roll their eyes.

Until one night,

I talked about how

there was a pickup game

and we're tied,

next basket's

gonna win the game.

Someone from my team

puts up a shot,

I went up to rebound it,

the ball bounced

off my head,

arced in the air,

swish, into the basket.

I win the game.

And everyone in my family,

all at once,

they had finally had it.

"Stop lying to us,

that is ridiculous,

that did not happen."

But here's the thing about it,

I, to this day, I can see

the texture of the basketball.

And I can feel

myself doing this

and the ball going in

and the exultation, like,

lives in me still.

In my head I know it's a lie,

in my heart, I can't let go.

ARIELY: We did a study

with 12,000 golf players.

We said, "Imagine

the ball fell

"on the rough,

not a good place,

"and you really,

really wanted it to be

four inches to the left.

"Would you pick it up

and move it four inches?"

And people said,

"Heaven forbid."

It was in the nature

of the game, how

people feel about it,

nobody would do that.

Fine, nobody does that.

What about

kicking the ball?

No problem, whatsoever.

(LAUGHTER)

What about

hitting it with a club,

it's even easier.

And you know

what's the easiest?

If you're not looking,

like you look up

and then you

kick a little bit...

(LAUGHTER)

But I think you can

feel the intuition

that if you

picked something up

and you moved it,

the act would feel

incredibly deliberate.

But if there was

some distance,

you kicked it,

something happened,

all of a sudden,

this distance would

allow people to have

a bit more ambiguity

in the connection

between them

and the final act.

So, imagine

the same experiment

I described earlier.

You fill in your sheets,

you solve these

little problems,

you shred the piece of paper

and you come to

the experimenter.

You tell them how much

money you deserve.

You tell it in tokens,

"I solved X problems,

I deserve X tokens."

So, now you pay them

in pieces of plastic.

They take this

piece of plastic,

walk 12 feet to the side

and change it for dollars.

So, when somebody

looked you in the eyes

and they lie,

they don't lie for money,

they lie for something else

but that thing

becomes money very quickly.

What happened?

In our experiment, people

doubled their cheating.

WOMAN: There you go.

MAN: Thank you.

This, by the way,

is the most troubling

result I think we got.

Think about it, as a society

we're moving away from money.

Credit cards, stock,

stock options, derivatives,

dealing with people

over great distances.

Could it be that

as these distances

in all of their versions

are increasing,

people find it easier

to misbehave and still

think of themselves,

or of ourselves,

as good people.

And I think the answer

is absolutely,

absolutely yes.

My name is Walt Pavlo,

I grew up in Savannah,

Georgia.

I was the first one

on either side of my family

to ever go to college.

I worked for MCI,

a very large

telecommunications company.

I was a bill collector.

And they weren't

telephone bills you and I

open up each month.

They were for large companies.

While I was managing

customers that were paying

their bill on time,

I was getting a small

number of customers

that were involved in things

like 900 business.

Those types of companies

aren't exactly

good business people.

One company owed MCI

in excess of $50 million.

And I took this

to my management

and said, "What do I

do with this guy?"

He owes us $50 million,

we have to,

in accounting terms,

do a write-off.

Just really tell

our shareholders

that $50 million

that we were expecting

from this customer,

it's not gonna come in.

And instead, I was told,

"We're not gonna

tell anybody about it."

We're gonna leave it

on MCI's accounting records

and we're going

to do some, uh,

cooking of the books,

if you will,

to allow this debt

to be put off

into the future.

So it looks like

it's gonna be collected

at some other time.

The ability for me

to move numbers around

was something that

I knew that was wrong

but, at the same time,

it took a lot of

pressure off of me.

And before I knew it

I had moved around

or not told shareholders

about probably $100 million

worth of debt that

wasn't on MCI's books.

It really is that simple.

I mean, it's just

an accounting entry,

it's just a number.

I felt a sense that

it wasn't gonna be

very much longer

that there are ways

to undo this and

turn the clock backwards

in a few months,

and then I realized that

this isn't gonna happen.

Customers still

aren't paying us.

The amount of money

that I've manipulated

is getting larger.

I'm working for a company

that doesn't care

the pressure that

they've put me under.

So, I confided in somebody

outside of MCI and said,

"Hey, I'm looking

for some advice.

"What do I do in

this situation?"

He says,

"Walt, I have an idea.

I think that there's a way

"that we can get

some of these customers

to pay MCI's debts.

"That solves

your other problem

"in that you're

actually gonna see

money coming in again.

"And then third, Walt,

I think I can make you and I

"a hell of a lot of

money doing this."

(CHUCKLES) And I was like,

"What was number three again?"

I felt a sense

of empowerment,

really, cockiness.

You know, "If there's

money involved,

"yeah, I'm doing this, yeah,

this is the way this

is supposed to work."

WOMAN: Hi, Walt.

Hi.

Is this pretty cool?

Real cool.

I can tell you, that feeling

didn't last very long.

I went down to

the Cayman Islands.

I went on a private jet

and a guy

hands me a lot of money.

And I'm like, "Oh, my God.

What is this?

"What have I done?

How far have I

taken this thing?

"No more,

I don't want to

do this anymore."

Six months after that,

um, I received

a call from my boss.

"Somebody from

accounting has called me

and told me

"something's wrong

with one of

the accounting entries.

"And they need

an explanation for it."

For a split second,

I said, "I can fix this."

And then the totality

of what I had done,

it was just coming

crashing down.

There was no way

that I could fix it.

I've been caught.

FEMALE REPORTER:

Worldcom said last night

that an internal investigation

has uncovered massive

accounting fraud,

almost $4 billion,

in disguised expenses

in what could become one of

the biggest accounting

scandals in US history.

(CAMERA SHUTTERS CLICKING)

ARIELY:

Now, when we run

these experiments,

we run them either

at universities

or in bars.

We went to a bar

in Washington, D.C.

where congressional

staffers hang out.

And we went to

a bar in New York City,

where bankers hang out.

So, who cheats more,

the bankers or

the politicians?

(LAUGHTER)

Who votes for bankers?

Who votes for politicians?

Okay, many more

for politicians.

The bankers cheated

twice as much.

(LAUGHTER AND CLAPPING)

You can't be happy

with this result.

(CHUCKLES) Like,

there's no way that

this is a good result.

If we took all the elements

that we studied

and we combined them

into one environment,

we would get

an environment that is

very similar to the one

that operated in

the financial crisis

of 2008.

MALE REPORTER:

Not in generations,

has Wall Street absorbed

the number of body blows

it took today.

Three of the five biggest

investment banks are gone.

The country's biggest

mortgage lender is gone.

ARIELY: We had politicians,

bank regulators

and even investors,

all influenced

by many factors.

Self-deception, social norms,

distance from money,

lying for the benefits

of other

and, of course,

conflicts of interest.

And this is what I think

corruption is all about.

It's about that when

you get into a system,

and something in the system

tells you that things

are wrong there,

all of a sudden,

you abandon your

own moral fiber.

And because of that,

we really need

to figure out

what can we do about it?

How can we get people

to behave better?

Because if we don't,

we're just going to get

more and more disasters

like the one we've

just experienced.

(CRICKETS CHIRPING)

(MANGALAVATHY

SPEAKING IN ENGLISH)

Our founder

was always very keen

about character formation,

uh, for children,

more than making

them score marks.

Because when we sow that seed

when they're very young,

when they grow up,

it blossoms.

(CHILDREN CHATTERING)

So if anybody

wants to purchase

any stationery

or other things,

the first things is, uh,

they'll come and look

at the price list.

And they'll pick whatever

they wish to take.

And they'll put the rupees

inside that bowl,

and there will

be no monitoring.

They'll get it by themselves.

(SPEAKING TAMIL)

At first, people took

things without paying.

They took things like

pencils and erasers

But then the principal

repeatedly told us

during assemblies that

it would actually

create a big loss

in the future

and would hurt us.

(TILAGAVATHI IN ENGLISH)

This honesty is happening

everywhere in our

school environment now.

From the children

in higher grades,

the children in lower grades

also came to know

what is meant by honesty.

(SPEAKING TAMIL)

For people looking

at it superficially,

it appears to be

a shop for things.

But if you look deeply,

it teaches us honesty.

And it is an example of

the trust madam has in us

and the trust students

have in each other.

(SPEAKING TAMIL)

Even though

I know I can pick up

what I want without paying

I don't because

if we live without stealing,

without cheating,

without lying,

we can win in life.

Many of the experiments

that we have conducted

are about trying to find

ways to curb dishonesty.

We went to UCLA

and we asked

about 500 undergrads

to try and recall

the 10 Commandments.

NINA: We asked people

to write down as many

of the 10 Commandments

as they could remember.

And then we put

them in a situation

where they could cheat

with the matrix task.

How many of them

do you think recalled

all 10 Commandments?

MAN: Zero.

Zero, that's right.

(CHUCKLES)

By the way,

they invented lots

of interesting ones.

(AUDIENCE LAUGHING)

What happened after

people tried to recall

the 10 Commandments,

even if they

were unsuccessful,

nobody cheated.

It wasn't as if

the people who remembered

more commandments,

the people who are

presumably more religious,

cheated less,

and the people who

remembered almost none

of them, cheated more.

Nobody cheated.

NINA: It didn't matter

what religion

the participants had.

You know what the 10

Commandments are about.

They are about moral code,

they are about

proper behavior,

and just knowing that

and being reminded of that

decreases dishonesty.

In fact, even when we take

self-declared atheists

and asked them to

swear on the Bible,

they stopped cheating.

It is not about

heaven and hell

and being caught.

It's about reminding

ourselves about

our own moral fiber.

We found this result

to be very promising.

But we wanted to test it

in a non-religious context.

So, we went to MIT

and we did a similar

experiment with honor codes.

So we got students at MIT

to sign the honor code,

"I understand

that this short study

"falls under

the MIT Honor Code."

They did it, shredded

the piece of paper,

what happened?

No cheating whatsoever.

And no cheating

whatsoever

despite the fact

that MIT doesn't

have an honor code.

(LAUGHTER)

Then we replicated

the experiment

at Princeton.

Princeton has a very

strong honor code.

In fact, the freshmen

get a whole week of

a crash course on morality,

lectures, discussion.

Their a cappella

group has a song

on the honor code.

(SINGING)

It's an awful song,

by the way,

but they have it.

So we took

the Princeton students

signing the honor code

and not signing

the honor code,

the MIT students

signing the honor code

and not.

Was there any

difference? No.

When they did not

sign the honor codes

they both cheated

to the same level.

When they signed

the honor code,

none of them cheated.

I think this is

kind of a mixture

of good news and bad news.

The bad news is that

the crash course on morality,

particularly

the Princeton version,

doesn't seem to

have any effect

two weeks down the road.

The good news is that even

without a crash course

reminding people about

their own moral fiber,

does change

how people behave.

The fact that

we can change you

with these tiny,

tiny interventions

is actually at the heart

of behavioral economics.

It's this idea

that we think that

to change people's behavior

we need to

change a society

or change a culture.

And in fact, sometimes,

little, tiny tweaks

around the edges

can have big impacts

on what we do.

I feel that both,

in collaborating

with organization

as well as government,

we could make

a difference as scientists.

I think we could

design intervention

that would be helpful

in reducing

unethical behavior

at work as well as

in society, more broadly.

The Behavioural

Insights Team was set up

by the British government,

by Prime Minister

David Cameron in 2010

with the new

coalition government.

And the idea was to introduce

a more realistic model,

into, um, how people

actually make decisions,

and, um, what drives

their behavior,

and if we did that,

we'd make better policy.

It turns out a lot of

both tax and benefits

actually rest on honesty.

When we add one line into

our tax letter saying,

"Most people pay

their tax on time,"

it turns out,

not only is it effective,

it's also a nicer way

of encouraging

people to pay their tax

than just to threaten them.

We increased payment rates

from about 30% to about 35%.

Now, you could say

that's not very much.

No, it's not going

from 30% to 100%.

Or you could say,

"This is literally

just one line of text."

And suddenly

you're talking about

hundreds of millions

of pounds of revenue

brought forward to

your tax authority.

Once you start

turning the needle

in lots of different

places simultaneously,

you start to see the effects

build upon one another

and it starts to add up

to something quite profound.

Dishonesty is

sort of contagious

and we see this

in many contexts,

both in the real world

and in lab experiments.

It has an even wider

ramification which is,

how do you feel about

other people around you?

In the Scandinavian countries,

more than 60% of people

will generally say

most people can be trusted.

In other countries,

much of Africa

and South America,

it's often below 10%.

It's an enormous advantage

to live in a country

where there's

high social trust.

It turns out it boosts

economic growth.

When you build it

into an equation,

it's more important,

for example,

than levels of skills

in the economy.

We've been kind of

stumbling in the dark

with really naive models

of human behavior

built into policy.

Imagine what we can do

if we put even

a half-decent model

of how people behave

into, um,

what we do and how we design

our economies and societies.

How many people here

grew up in countries

outside of the US?

Please raise your hands.

Keep your hands up,

outside of the US.

Okay. And how many of you

think that people

in your country of origin

cheat less than Americans?

Less than Americans,

keep your hands up.

Canadian?

(LAUGHTER)

British?

British.

Yeah, of course.

(LAUGHTER)

British.

Anybody else thought

that they cheat less?

MAN: Tanzania.

ARIELY: Tanzania?

Are you joking?

(LAUGHTER)

I think you didn't

hear the question.

(LAUGHTER)

So, I grew up in Israel,

so the first place

I went to test was Israel.

I was sure

that the Israelis

would cheat more.

No, they cheat

just the same.

We tried Turkey,

China, Colombia,

South Africa, Portugal.

We tried Germany.

And in all of those

countries, we don't find

any real difference.

Now, how can it be?

We've all traveled,

we've all been to

different places,

and we all get

the feeling

that cheating

feels differently

in different places.

And here's the thing.

Our experiments are

general and abstract.

And because of that,

they capture

the basic human

ability to cheat

and feel good

about ourselves.

And from that perspective,

we're not different.

We're the same

the world over.

And for me this

is the big lesson.

It's not about being bad,

it's about being human.

And because of that,

it means that we all

need to think about

how do we protect ourselves

against our own bad behavior

and the bad behavior

of other people.

(SCREAMING)

We have much more to learn

and a lot to gain

from understanding

our ethical shortcomings.

When it comes to building

the physical world,

we seem to understand

our limitations.

We build things

like roads and bridges

to help us with

the things that

we can't do

perfectly on our own.

But when it comes

to the mental world,

we somehow forget the idea

that we're limited,

that we're fallible.

Science has some

starting points to help us

think about this.

It's not going to be simple,

but we all have

the capacity to build

a better, more ethical,

more honest world.

It took me a long time

to come to grips

with the fact that

I was gonna go to prison.

And it wasn't because

I didn't know

that I was guilty.

I mean, I knew

for sure that I was.

I knew that what I

had done is wrong,

and I wanted to make it right,

but what I couldn't

come to face with

was the consequences.

I had to fall on a sword

and let everybody know that

I'd basically screwed up

and I'd made some

terrible, terrible choices.

It really... I mean,

it destroyed my life,

to be honest with you.

I'm pretty honest now.

I'm about

like Honest Abe,

but I'm... (LAUGHS)

I try to tell the truth

about everything.

It's not like

there was one thing

where I said like,

"That was so wrong.

I'm never gonna do

that ever again. I'm done."

It's more like,

on everything that I did,

there were parts

that I didn't like

that bothered me

and those added up over time.

I regret it all.

I mean, because

I would like to be

honest with my girls

and tell them that I went

the higher route and

that I didn't cheat,

and that one wrong

doesn't make a right

and preach all that

to them, but I can't.

I mean, if my girls ask me

about my infidelity,

I'm gonna be honest with them

because it's who I am,

and I need to own it.

I used to think of

the world in terms of

good people and bad people.

And now I think of

the world as people.

(LAUGHS)

When I do

get out of jail,

my brother said

he will help me,

but I just don't know what

I'm gonna do at all. Uh...

I figured I'll have a lot

of time to think about that.