27 Psychological Reasons Why Good People Lie, Cheat, And Steal

Taylor schilling orange is the new blackBarbara Nitke for NetflixIn ‘Orange Is The New Black,’ Piper Chapman ends up in prison for carrying drug money for her girlfriend.

It’s an old story: The star executive who gets caught waist-deep in a fraud scandal; the finance phenom who steals millions by skimming off the top.

What causes these smart, successful people to get wrapped up in illegal activities and unethical behaviour? Dr. Muel Kaptein of the Rotterdam School of Management tackled this question in a paper about why good people do bad things.

These major crimes usually escalate from smaller offenses or lapses in judgment that are rationalized by a slew of psychological reasons.

We’ve collected 27 insights from Kaptein that explain a few of the various reasons why good people lie, cheat, and steal.

This is an update of a story originally reported by Max Nisen and Aimee Groth.

The power of names

Michael Dobrushin (left) was charged by federal prosecutors as part of a scheme to cheat Medicare out of $US163 million.

When bribery becomes 'greasing the wheels' or accounting fraud becomes 'financial engineering,' unethical behaviour may be seen in a more positive light.

The use of nicknames and euphemisms for questionable practices can free them of their moral connotations, making them seem more acceptable.

Source: Muel Kaptein

Self-serving bias

Few people believe they're average; most think they're smarter and more ethical than those around them.

That can lead to feelings of injustice. If somebody else gets a promotion, it's not down to their performance and capacity, it must be something else. Those feelings, and overestimation of other's biases can lead to unethical behaviour.

Source: Muel Kaptein

Conspicuous consumption

Extreme wealth, or environments that reflect it, can lead to unethical behaviour. For employees, seeing others receive excessive bonuses or perks may create feelings of injustice and jealousy, which may lead them to unethical behaviour.

Research by Kathleen Vohs shows that the mere presence of money makes people more selfish, since they focus on success and individual needs over other factors.

Source: Muel Kaptein

The Pygmalion effect

The way that people are seen and treated influences the way they act. When employees are viewed suspiciously and constantly treated like potential thieves, they are more likely be thieves.

This effect occurs even in employees who aren't initially inclined towards unethical behaviour.

Source: Muel Kaptein

Reactance theory

Rules are designed to prevent unethical behaviour, but when they're seen as unjust or excessive they can provoke the opposite reaction.

This is known as reactance theory. People resent threats to their freedom, and they often manifest that resistance by flouting certain rules.

Source: Muel Kaptein

Broken window theory

Former New York City Mayor Rudy Giuliani popularised the 'broken window theory' when he led a sweeping effort to lower crime rates. The idea was to crack down on smaller, petty crimes, and clean up the city to create some semblance of order and discourage larger crimes.

When people see disorder or disorganization, they assume there is no real authority. In that environment, their threshold for overstepping legal and moral boundaries is lower.

Source: Muel Kaptein

Winner take-all competition

In situations where there is a clearly defined winner and loser, people are more likely to cheat. They desperately want to avoid the financial and reputational costs of losing.

The people most likely to cheat may not even be those farthest behind, but rather those who are just short of their goal.

Source: Muel Kaptein

Problematic punishments

Attaching fines or other economic punishments to immoral behaviour can have an undesired effect. Once something is cast in those terms, it loses its moral connotation and becomes an entirely different calculation.

Rather than being about whether something is right or wrong, it becomes an economic calculation about the likelihood of getting caught versus the potential fine.

Source: Muel Kaptein

Market and shareholder pressure

Former Citigroup CEO and Chairman Charles Prince once said, 'As long as the music is playing, you've got to get up and dance.'

He was referring to the leveraged buyout market in 2007. Before the collapse, there was intense pressure for managers to join in on the huge and risky profits, despite the evident bubbliness of the market.

Source: Muel Kaptein

The compensation effect

Sometimes people, having been moral and forthright in their dealings for a long time, feel as if they have banked up some kind of 'ethical credit,' which they may use to justify immoral behaviour in the future.

An experiment from Nina Mazar and Chen-Bo Zhong found that people who have just bought sustainable products tend to lie and steal more afterwards than those who bought standard versions.

Source: Muel Kaptein

Bad communication

Issues of corruption and morality are often treated as black and white, where wrongdoers are badly punished and grey areas are not discussed.

That can lead to an environment where rather than sounding out ideas that border on unethical, people push and test their limits.

Source: Muel Kaptein

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