Friday, 1 April 2016

Honestly!

Honesty is a core value, the ultimate test of deferred gratification. It has a quasi-religious quality to it, in that it requires a belief that someone will notice that you restrained yourself from the short-term convenience of lying: either an all-seeing deity or a body of right thinking honest persons into whose quiet precincts one gains admission. Honesty is not the favoured strategy of people in a hurry. At a larger level, honesty is measure of respect for society: although cheating provides personal advantage it debases the society in which the cheater lives: if he steals a bicycle then everyone must carry a bicycle lock thereafter. Understanding that particular cause and effect relationship requires a modicum of intellect, self-restraint and long-term thinking.

Simon Gächter & Jonathan F. Schulz. Intrinsic honesty and the prevalence of rule
violations across societies. Nature, Letter doi:10.1038/nature17160

https://drive.google.com/file/d/0B3c4TxciNeJZS0JfOGZQNnBhVkE/view?usp=sharing

Good institutions that limit cheating and rule violations, such as corruption, tax evasion and political fraud are crucial for prosperity and development. Yet, even very strong institutions cannot control all situations that may allow for cheating. Well-functioning societies also require the intrinsic honesty of citizens. Cultural characteristics, such as whether people see themselves as independent or part of a larger collective, that is, how individualist or collectivist a society is, might also influence the prevalence of rule violations due to differences in the perceived scope of moral responsibilities, which is larger in more individualist cultures.

If cheating is pervasive in society and goes often unpunished, then people might view dishonesty in certain everyday affairs as justifiable without jeopardising their self-concept of being honest. Experiencing frequent unfairness, an inevitable by-product of cheating, can also increase dishonesty. Economic systems, institutions and business cultures shape people’s ethical values, and can likewise impact individual honesty.

Unobserved in a cubicle, participants played a dice-rolling game for money. They were paid reasonable sums in their local currency according to how they said the dice fell, but had the opportunity to report better results than they actually obtained. Although the experimenters did not peer over their shoulders, the spirits of Pierre de Fermat, Blaise Pascal and Chevalier de Méré were watching, and honest persons were distinguishable after the event from those who cheated a bit (“justified dishonesty”) and those who cheated a lot (“full dishonesty”). For example, in this game throwing a six gained you nothing. How many in a national sample reported throwing a six?

Although individual dishonesty is not detectable, aggregate behaviour is informative. In an honest subject pool, all numbers occur with a probability of one-sixth and the average claim is 2.5 money units. We refer to this as the ‘full honesty’ benchmark. By contrast, in the ‘full dishonesty’ benchmark, subjects follow their material incentives and claim 5 money units.

Deviations from honesty

The authors ran their experiments from 2011 to 2015. Talk about dedication. Scrupulous sea-green incorruptible honesty would result in 2.5 money units. Even citizens of decent countries stray from rectitude and award themselves 3.17 money units,  a 0.67 tip for self-interest. Those from more corrupted polities claim 3.53 money units or 1.03 money units more than they should. They are 54% more self interested.

Our strategy was to conduct comparable experiments in 23 diverse countries with a distribution of PRV (prevalence of rule violations) that resembles the world distribution of PRV. In the countries of our sample, PRV in 2003 ranges from −3.1 to 2.0, with a mean of −0.7 (s.d. = 1.52). Thus, the distribution of PRV in our sample is approximately representative of the world distribution of PRV with a slight bias towards lower PRV countries. The countries of our sample also vary strongly according to frequently used cultural indicators such as individualism and value orientations.

So, all though not all the world was tested, this is likely to be a representative sample.

Our participants, all nationals of the respective country, were young people with comparable socio-demographic characteristics (students; mean age of 21.7 (s.d. = 3.3) years; 48% females; who, due to their youth, had limited chances of being involved in political fraud, tax evasion or corruption, but might have been exposed to (or socialized into) certain attitudes towards (dis-) respecting rules.

Where do the cheats live? The authors give 4 ways of calculating honesty, and I have picked the % of honest people in each country measure as the most explicable metric for everyday Bayesian interaction with foreigners.

 

Where the honest people are

Avoid Tanzania and Morocco and head for Germany and Slovakia (which many of the citizens of Tanzania and Morocco are seeking to do).

On a topical note, given the referendum on British membership of the European Union, it would probably be better for the European Union to consist of Germany, Slovakia, Austria, Sweden, Poland, UK and Lithuania; but not Italy, and possibly not Spain. A real pity France was not included in the experiment, but you cannot always have what you want.

After four years of labour the authors have come to some conclusions, and here they are:

Given that the experiment holds the rules and incentives constant for everyone, the large differences across subject pools are also consistent with a cultural transmission of norms of honesty and rule following through the generations and a co-evolution of norms and institutions. Societies with higher material security, as measured by
Government Effectiveness, tend to be more individualist, and more individualist societies tend to have less corruption. Consistent with this, we find that subject pools from individualist societies have lower claims than subject pools from more collectivist societies and also from
more traditional societies and societies with survival-related values. Further econometric analyses developed in economic literature on culture and institutions applied to PRV support the argument that both the quality of institutions, as well as culture (individualism) are highly significantly
(and likely causally) correlated with PRV.

Taken together, our results suggest that institutions and cultural values influence PRV, which, through various theoretically predicted and experimentally tested pathways, impact on people’s intrinsic honesty and rule following. Our experiments from around the globe also provide support for arguments that for many people lying is psychologically costly. More specifically, theories of honesty posit that many people are either honest, or (self-deceptively) bend rules or lie gradually to an extent that is compatible with maintaining an honest self-image. Evidence for lying aversion and honest self-concepts has been mostly confined to western societies with low PRV values. Our expanded scope of societies therefore provides important support and qualifications for the generalizability of these theories—people benchmark their justifiable dishonesty with the extent of dishonesty they see
in their societal environment.

This is a very good paper. The experiment is simple, the results compelling, the implications considerable. It bounces out of the experimental cubicle into socio-political and philosophical dilemmas. Will immigrants from corrupt countries adopt the values of the society they move to, or keep cheating? Will the current levels of rule-following in decent countries persist, or drift down to less honest global levels? Conversely, might growing affluence make honesty the next must-have consumer requirement across the world?

Consider the authors remark that the different rates of cheating “are consistent with a cultural transmission of norms of honesty and rule following through the generations and a co-evolution of norms and institutions”. The mention of “through the generations” is very welcome. Of course, they might have said “are consistent with cultural transmission of norms of honesty and rule following through the generations and a co-evolution of norms and institutions, and also consistent with a contribution through genetic transmission of a propensity to behave in a pro-social manner”.

The authors may have thought it outside the bounds of their work to consider why societies are “individualist” or “collective” or why some have developed reliable institutions and others haven’t. Cheating, they say, depends on institutions and cultural values but these are created and maintained by the people who live in the countries studied. What drives some to peoples to relative honesty, strong institutions, civil calm and material wealth and others to dishonesty, corruption, unrest and poverty?

I will be posting more about this topic, now that a distinguished colleague has spent some time crunching the relevant additional data. He has many of the answers. You know which way I am heading, but bear with me for a while.

23 comments:

  1. Why not control for the socio-economic status of the parents? Intuitively, students coming from poor families should be more inclined to cheat. The ratio of (the amount of money awarded) / (parent's monthly income) should asymmetrically affect the outcome (left side of the distribution cheating disproportionately more).

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    Replies
    1. Payments were adjusted for purchasing power parity

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    2. When people are starving and worried about next meal, even one grain of food is worth all effort to survive. Especially in countries that more than 90% income is spent on food, ............

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    3. What about Gini? Controlling for PPP is enough to measure average phenotypical honesty; but controlling for individual socio-economic variation would give insights as to how heritable it is. It'd be cool to compare equally poor groups from distinct ethnicities (ditto for equally well-off groups).

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    4. What about Gini? Controlling for PPP is enough to measure average phenotypical honesty; but controlling for individual socio-economic variation would give insights as to how heritable it is. It'd be cool to compare equally poor groups from distinct ethnicities (ditto for equally well-off groups).

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  2. I think people discover the costs and benefits of cheating in childhood, through stories and games. Those stories and games vary by region, of course. http://phys.org/news/2016-01-phylogenetic-analyses-fairy-tales-older.html

    Then again, perhaps it helps to be related to Vikings: https://upload.wikimedia.org/wikipedia/commons/5/50/Viking_Expansion.svg.

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  3. Talking about cheating, doc ....
    http://andrewgelman.com/2016/03/31/greshams-law-of-experimental-methods/

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  4. theo the kraut3 April 2016 at 00:14

    in the last graph the values for slovakia and the czech republic seem to be off--formerly one country, speak the same language (basically), share their history.

    however there are differences (from wikipedia):

    catholics:
    slovakia: 62.0%
    czech republic: 10%:

    atheist/undeclared/irreligious:
    slovakia: 13.4%
    czech republic: 79%:

    roma:
    slovakia: 10%
    czech republic: < 1%:

    do the roma keep those slovakians honest? else it's the pope.

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    Replies
    1. There is an interesting paper in this for somebody. If you look at the link to the paper, down at the bottom you will see the results for Prague and Bratislava

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  5. The Czech republic vs. Slovakia is interesting. I am from the CZ and our score does not surprise me much.
    With Slovakia we lived about 70 years in the same state, but there have always been differences like after WWII (in electins) Slovaks leaned to democrats, Czechs to communists. Anecdotically czech women are more slutty than slovak, slovak are more family oriented etc (in my country there are other indicators like significant increase of divorces, single motherhood, sig. increase in early onset of sexual nehavior and alcohol consumption in juveniles - we are heading in certain direction ...)
    We had also been influenced by centuries under Habsburg rule, yet Austria is much more honest (and lower Austria, especially Vienna, had notable czech immigration).

    Another interesting thing in the charts is number of fully honest people in Malaysia and Georgia. This might be caused by different subpopulations (lowland vs. highland origin in Georgia?). Plus I would not condemn Italy as there is probably north vs. south divide.

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    Replies
    1. I would expect the north/south divide in Italy too (with a name like mine, I would say that).

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  6. Replies
    1. Slovakia, Poland are out (historically), still fairly honest. Germany, Austria are in and honest.
      The Czech rep. is in* but dishonest.

      * Had been part of the Holy Roman Empire (from 9th century - don't remember exactly). German style laws, inheritance, society organization since 13th century - czech kings brought in Germans to introduce them.

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  7. http://www.bbc.com/news/business-34324772

    Well, high IQ people are less likely being caught. Honesty is just one of options among all. High IQ people can calculate all options and decide what to choose. That is all.

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    Replies
    1. Panama papers

      http://www.cnn.com/2016/04/05/europe/panama-papers-iceland-pm/

      This is how high IQ elites cheat! All elites are now cooperating internationally. This is just tips of icebergs. There are numerous ways to beat average mass,..............

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    2. If you read the paper you will see that in this experiment this is unlikely to be an explanation, since no-one could be caught.Also, lower intelligence respondents report higher crime levels on surveys even when they are not going to be caught for anything.

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    3. For example, there are numerous laws regarding taxation on personal wealth. Elites are all doing the very similar things even though body tell them specifically what to do with all those different taxation rate. You just ask your accountant about different taxation rate on type of wealth. If you have enough IQ, you can figure how to minimize your rate by changing your type of wealth. But telling nobody else. Is that a cheating? Then you find out all other rich people are doing the same thing without saying a word. Better let public never know about it.

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    4. German are indeed high IQ people. With recent scandals of Volkswagen and Siemens, German leaking of panama paper can successfully draw attention away from corrupted German character. When you have inexcusable problems, bring out dirt of others can make looking relatively better.

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  8. One fatal flaw of this experiment is amount of money. For $1 award, it is big deal for poor countries, nothing for rich countries. For one million dollars prizes, you would be most likely to get different result from even so called "honest countries".

    White collar crimes, any one?

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    Replies
    1. If your read the paper, you will see that the actual sums were in local currency, and adjusted for purchasing power parity.

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    2. PPP is misleading here. One should select subjects by asking question like how much money is really worth your life for. Then set that amount as testing prize. Next test should select subjects by asking question like how much money you can donate to other without pain.

      The result is more comparable now. I do believe that high IQ people are less likely to cheat in this test since they will consider numerous consequence.

      I would ask myself what is this test for? What they want to find out? I would give the result most favorable to me. Low IQ people would perform badly since they are less likely considering things in such depth and multiple dimensions.

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  9. eToro is the ultimate forex trading platform for newbie and advanced traders.

    ReplyDelete