Fraud Slides Flashcards
Rational Theory of Crime
We weigh positives and negatives to make an optimal choice for ourself. for example parking illegally and getting a parking ticket
Matrix Task
The task is to find two numbers that add up to 10. In the control the answer sheets were checked and they solved 4. When they can shred their answer sheets they self reported 6. This says everybody cheats a little when it is easy and justifiable. When incentives are raised cheating does not increase but in fact is slightly less.
Cab Driving
-Some cab drivers are infamous for long hauling or taking a longer than necessary rout to increase their fare. A blind and seeing person both took the trip who on average paid more? It was the blind person as they could not detect the cheating so they were more likely to be taken advantage of.
What is behavior driven by?
Ego motivation (feel good about ourselves) and Standard Benefit (weighing positives and negatives of the lying)
MIT dorm experiment
6 cokes and 6 dollars were placed in a fridge and the 6 cokes quickly disappeared when the money was left in the fridge. This is because this is less salient as stealing. It isn’t the value of what we are taking but rather the perception of the act.
If the Matrix task instead of receiving cash you got tokens which later where turned into cash what happens to the levels of cheating?
It doubles as it is less salient in your mind keeping your ego in tact.
Golf example
if you were to improve your lie would you use hand, club, or shoe. In that order they felt the most to least cheating. Shoe was least salient as they were adjusting their stance and easiest to rationalize. There is wiggle room around ego and social perception. Ambiguity leads to easier justification.
Matrix Experiment at CMU
Claimed to have solved all 15 in 60 seconds. the number claimed was much higher than the potential cheating baseline of 12. Forced to wear a University of Pitt sweatshirt with the number 9 on it.
Conflict of interest
-Subjects evaluated art and were given the name of a gallery (one was the sponsor of each subject’s participation). Subjects exhibited a preference for art in their sponsor gallery.
-FMRI said there was suggested pleasure. Higher compensation greater the preference.
-Subjects denied that their opinions were influenced.
Motivated Switching
Humans engage in motivation shifts to protect against overexertion. (dopamine hits from other sources) Those who faced the incongruent condition were far more likely to cheat
Motivated Switching
Humans engage in motivation to protect against overexertion. We look for dopamine hits from other sources. Those who faced incongruent conditions were far more likely to cheat.
How to fight against motivated switching
Self control limited? the evidence goes against it.
Standard advice is that- if you believe will power is unlimited you will do better, frame it as rule following, and keep goals salient.
Storytelling
Participants take an exam with answers at the bottom and are offered money to predict score on a similar exam. People predict that they will make the cheated score.
Creative Types
Participants are given more money if they pick the right not the left side. More creative people have a propensity to cheat. In more ambiguous situations
Self-Deception experiments
1.) People often avoid checking, because ignorance protects their self-image. If they don’t know whether giving helps or harms, they can feel moral for giving little or nothing — it’s strategic ignorance and self-deception in action.
2.) People are likely to delegate to self-interested third parties who choose selfish outcomes, allowing the dictator to avoid responsibility.
Delegation acts as a moral buffer — “I didn’t make the greedy choice, they did.” It’s a way to outsource blame while still benefiting.
Restaurant Payment
Customer receives 9 dollars instead of 5 dollars. 45% if the time cash is returned. If the barista is in a cell phone call only 14% return the money to the coffee shop.
Collaborative Effort
Cheat even more if it is to help other people. Easier to convince yourself that you are doing good protecting your ego.
What the hell effect
-Slippery slope: Small acts eventually become bigger as they are easier to justify
Dot task: as cheating when unpunished gets rewarded and you fall deeper and deeper into this convincing yourself that it is okay.
-Confession or New Years Resolution: “fresh start” after periods of unethical behavior — like making resolutions or confessing. This acts as a moral reset, allowing them to stop the cheating cycle and restore self-image.
Reducing Guilt
When people feel guilty, they’re more likely to accept self-inflicted pain as a form of emotional cleansing or moral reset.
In the study, participants who recalled a guilt-inducing memory gave themselves the strongest electric shocks, suggesting they were punishing themselves to relieve guilt.
Ponzi Scheme
fraudulent investing scheme that generates returns for old investors using new investors capital.
