The Pinocchio Effect

The Pinocchio Effect_V1_Page_1I HAD just finished behavioural economist Dan Ariely’s new book THE (HONEST) TRUTH ABOUT DISHONESTY. I was on a late evening flight back to Mumbai. “Ice cream?” asked the stewardess as the dinner was served. As I took a cup, the print on its label caught my eye: ‘Frozen Dessert: Contains Edible Vegetable Oil’. It was brightly packaged and even looked like a real ice-cream. That said, apart from a small mention of milk solids in the fine print, it really was vegetable oil. But why was it being served as ice cream then? Was it the stewardess’ fault? Or the airline’s? Or manufacturers? But hadn’t they told you already that it was not milk-based, but vegetable fat. Was someone being dishonest? Ariely’s book certainly got me thinking.

Dishonesty hits us in business continually. Not only in marketing and advertising, but also, as we saw recently, in finance, big business and politics. It could be subtle (as the ‘ice cream’ I didn’t eat) or more damning such as the shenanigans in the world of finance, which are still haunting us. So why are we dishonest? Why do we cheat?

The author is a Duke University professor and a prolific writer. His 2008 tome Predictably Irrational on irrationality and how we react to everyday events was a bestseller. His other famous work is The Upside of Irrationality (2010). In his latest work, Ariely tells us something we might really not know: dishonesty seems to be embedded in what we do – the way we behave, our daily lives and our interactions with everyone. To cement his argument, Ariely compiles a number of experiments. The pull of dishonesty, he feels, is present in us all, and it is only certain norms that are imposed on us, mainly by the society, that keep most of us from being crooks.

The book discusses a few interesting facets of dishonesty. For instance, wearing knockoffs of luxury brands cue us to accept being a little less honest. The psychological distance from the action also impacts dishonesty – whether in moving a ball in a game of golf (using the club instead of one’s hand) or in paying out a bribe (slipping it in an envelope). In conflict-of-interest situations – which many lawyers, doctors and dentists face – self interest, even  to the detriment of the client, always comes out ahead. Stress can increase our willingness to be dishonest. Ariely says all countries have the same level of dishonesty at individuals’ level. Finally, an interesting one: helping someone else when we cheat can always be a great motivator for being more dishonest.

But Ariely’s key take is on how we delude ourselves and be dishonest to ourselves. While this could be due to power or arrogance, it could also be just plain human behaviour, where we start believing in our lies. Now comes an interesting insight from the psychology professor: ‘creative’ people might well be the biggest ‘benders’ of rules and liars – forging ahead with changing rules and innovating.


Ariely brings out the curious effect of religion and secular codes reducing the willingness to cheat. Just showing the Ten Commandments or getting people to take a pledge before attending a test reduces cheating. So there is hope. Ariely mentions that victorious Roman generals were paraded through Rome with great pomp: purple robes, red dye on their faces, laurels in their hair, with all the treasures and spoils of war on display. But accompanying the general as part of the ceremony, among the cheers and shouts of the crowds, was a slave, who would repeatedly whisper in his ear: memento mori (remember your mortality). I guess we need more people, whether in politics, business, finance, education or even in  families, to  utter that phrase. While Ariely hopes society and individuals will keep to the straight and narrow, all evidence seems to indicate it is a struggle.


(By Sanjay Badhe, a retailing and marketing consultant. This review first appeared in Business World magazine)

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Sanjay Badhe

Sanjay Badhe

Sanjay Badhe is a consultant in the area of marketing, branding and retailing strategies and serves in an advisory capacity for a number of startups and established businesses across industries in the CPG, software and retailing industries. His experience has been at senior level positions with retailers in India and outside. He also teaches and trains on retailing, strategy, management and marketing at various institutes and organizations and is also associated with the new Centre for Excellence in Retailing set up at the Great Lakes Institute of Management .
Sanjay Badhe

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