Most of us would rather not think of ourselves as irrational or dishonest. But in the books "Predictably Irrational" and "The (Honest) Truth About Dishonesty," Dan Ariely, a behavioral economist at Duke University, makes the case that we're all probably both. And what's more, he says, that's not entirely bad.
Does everyone behave irrationally sometimes?
Absolutely yes. Irrationality is not about stupidity. It's about being human. Actually it's about both. Sometimes we behave irrationally because we don't think, or we don't think long-term. But other times it's because we're human, because we're kind and generous and not selfish. So we're all irrational from time to time, and occasionally it's a good thing. How often we do it is hard to say. But consider texting and driving. If you text only 10% of the time that you drive, or even 1%, is that a lot or a little? The trouble is, however rarely you do it, the danger is just tremendous when you do.
In general, anything that causes emotion — sexual arousal, or hunger, or anger, or compassion — can lead to irrational behavior. Emotions are inherently nonrational. They are ways to compute something, react quickly and not think. Also, we're often irrational about money. Money is a very, very complex domain. Every time you buy a cup of coffee, you should be thinking about what you're giving up, now or in the future, for this cup of coffee. But that's very, very tough to think about, so we don't. And then there's herding behavior. Every time people around us behave in a certain way, we may start adopting that as a reasonable strategy.
If you point out to people that they're behaving irrationally, will they change?
Very rarely. Take texting and driving again. People know it's incredibly stupid, but it doesn't help. Or suppose you point out to people that they don't save enough for retirement. If you do it at the right moment, and then you give them a form to enroll in automatic deductions, they might do something. But if you wait for the end of each month, so they need to make the right decision every time, it's unlikely to work out.
Does everyone lie sometimes? How often?
Maybe Mother Teresa didn't. But the vast majority of people do.
There are different estimates, but I would say the average person does it multiple times a day without even thinking that they do it. If some people lie more than others, it's probably because they have more opportunities. Say you work in an office, and people ask you questions all the time that you're uncomfortable with. Or you're married to someone who wants to know where you spend every penny. Those are things in the environment that create a higher tendency to lie. Of course, the most common lies are white lies. Why? Because we see them as helping not just us, but the other person involved, and then we don't think of ourselves as liars. We think of ourselves as helping the other person. Of course, in the business environment, we don't want people to lie. But we grew up in a social environment, and we learned our lessons about life in a social environment, with friends and so on. When you move to the business environment, it can be a little tough to make the switch.
If people get caught lying, do they tend to become more honest?
I do think it makes them more cautious. But dishonesty is selfishly rewarding in the present if you get away with it. And even if you don't, it's only negative in the future. We often weight the present over the future. There's also self-deception. We can't get caught lying when we think we're being honest.
When is it rational or irrational to lie?
The rational calculation is a calculation of cost-benefit. Take stealing as an example, I think if we were perfectly rational, we would steal much more. There must be all kinds of stuff you could pick up from the office, and nobody would find out. You could probably go to your friends' house and take stuff without them noticing. Thankfully, we're irrational. We care about morality. We care about our conscience. If you eat at a restaurant, and you could escape without paying, you would still feel bad about it. This is the beautiful irrational part of ourselves. We're not just selfish. We're not perfect economic actors. And because of that we're actually better off. We can trust each other. Not perfectly, but to a high degree.