Dan Ariely

Duke University, Durham, North Carolina, United States

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Publications (158)393.38 Total impact

  • Rachel Barkan · Shahar Ayal · Dan Ariely

    No preview · Article · Jan 2016
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    ABSTRACT: Dishonesty and unethical behavior are widespread in the public and private sectors and cause immense annual losses. For instance, estimates of U.S. annual losses indicate $1 trillion paid in bribes, $270 billion lost due to unreported income, and $42 billion lost in retail due to shoplifting and employee theft. In this article, we draw on insights from the growing fields of moral psychology and behavioral ethics to present a three-principle framework we call REVISE. This framework classifies forces that affect dishonesty into three main categories and then redirects those forces to encourage moral behavior. The first principle, reminding, emphasizes the effectiveness of subtle cues that increase the salience of morality and decrease people's ability to justify dishonesty. The second principle, visibility, aims to restrict anonymity, prompt peer monitoring, and elicit responsible norms. The third principle, self-engagement, increases people's motivation to maintain a positive self-perception as a moral person and helps bridge the gap between moral values and actual behavior. The REVISE framework can guide the design of policy interventions to defeat dishonesty.
    Full-text · Article · Nov 2015 · Perspectives on Psychological Science
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    Nina Mazar · Dan Ariely
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    ABSTRACT: Fraudulent business practices, such as those leading to the Enron scandal and the conviction of Bernard Madoff, evoke a strong sense of public outrage. But fraudulent or dishonest actions are not exclusive to the realm of big corporations or to evil individuals without consciences. Dishonest actions are all too prevalent in everyone's daily lives, because people are constantly encountering situations in which they can gain advantages by cutting corners. Whether it's adding a few dollars in value to the stolen items reported on an insurance claim form or dropping outlier data points from a figure to make a paper sound more interesting, dishonesty is part of the human condition. Here, we explore how people rationalize dishonesty, the implications for scientific research, and what can be done to foster a culture of research integrity.
    Preview · Article · Nov 2015 · The Journal of clinical investigation
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    ABSTRACT: In this paper, we experimentally examine whether looking at other people's pricing decisions is a type of a decision rule that people over-apply even when it is not applicable, as in the case of private-value goods. In Study 1, we find evidence that this is indeed the case-individual valuation of a subjective experience under full information, elicited using incentive compatible mechanism, is highly influenced by values of others. In Study 2, we find that people expect to use this rule to some degree with respect to actual consumption of goods, especially goods with some public value (music), and less so for private-value goods (noise). However, people expect to use the rule to a very large extent when they are required to express their valuation of a good using a dollar figure (Study 3). These results can shed light on price behavior as rigidities and rents.
    Preview · Article · Sep 2015 · Journal of Behavioral Decision Making
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    ABSTRACT: In this paper we experimentally examine whether looking at other people's pricing decisions is a type of a decision rule that people over‐apply even when it is not applicable, as in the case of private-value goods. In Study 1, we find evidence that this is indeed the case—individual valuation of a subjective experience under full information, elicited using incentive compatible mechanism, is highly influenced by values of others. In Study 2, we find that people expect to use this rule to some degree with respect to actual consumption of goods, especially goods with some public value (music), and less so for private-value goods (noise). However, people expect to use the rule to a very large extent when they are required to express their valuation of a good using a dollar figure (Study 3). These results can shed light on price behavior as rigidities and rents.
    Full-text · Article · Sep 2015
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    ABSTRACT: People demonstrate an impressive ability to self-deceive, distorting misbehavior to reflect positively on themselves-for example, by cheating on a test and believing that their inflated performance reflects their true ability. But what happens to self-deception when self-deceivers must face reality, such as when taking another test on which they cannot cheat? We find that self-deception diminishes over time only when self-deceivers are repeatedly confronted with evidence of their true ability (Study 1); this learning, however, fails to make them less susceptible to future self-deception (Study 2).
    Preview · Article · Sep 2015 · Frontiers in Psychology
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    ABSTRACT: Self-control failure has enormous personal and societal consequences. One of the most debated models explaining why self-control breaks down is the Strength Model, according to which self-control depends on a limited resource. Either previous acts of self-control or taking part in highly demanding cognitive tasks have been shown to reduce self-control, possibly due to a reduction in blood glucose levels. However, several studies yielded negative findings, and recent meta-analyses questioned the robustness of the depletion effect in humans. We investigated, for the first time, whether the Strength Model applies to a non-human primate species, the tufted capuchin monkey. We tested five capuchins in a self-control task (the Accumulation task) in which food items were accumulated within individual’s reach for as long as the subject refrained from taking them. We evaluated whether capuchins’ performance decreases: (i) when tested before receiving their daily meal rather than after consuming it (Energy Depletion Experiment), and (ii) after being tested in two tasks with different levels of cognitive complexity (Cognitive Depletion Experiment). We also tested, in both experiments, how implementing self-control in each trial of the Accumulation task affected this capacity within each session and/or across consecutive sessions. Repeated acts of self-control in each trial of the Accumulation task progressively reduced this capacity within each session, as predicted by the Strength Model. However, neither experiencing a reduction in energy level nor taking part in a highly demanding cognitive task decreased performance in the subsequent Accumulation task. Thus, whereas capuchins seem to be vulnerable to within-session depletion effects, to other extents our findings are in line with the growing body of studies that failed to find a depletion effect in humans. Methodological issues potentially affecting the lack of depletion effects in capuchins are discussed.
    Full-text · Article · Aug 2015 · Frontiers in Psychology
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    ABSTRACT: Self-control failure has enormous personal and societal consequences. One of the most debated models explaining why self-control breaks down is the Strength Model, according to which self-control depends on a limited resource. Either previous acts of self-control or taking part in highly demanding cognitive tasks have been shown to reduce self-control, possibly due to a reduction in blood glucose levels. However, several studies yielded negative findings, and recent meta-analyses questioned the robustness of the depletion effect in humans. We investigated, for the first time, whether the Strength Model applies to a non-human primate species, the tufted capuchin monkey. We tested five capuchins in a self-control task (the Accumulation task) in which food items were accumulated within individual’s reach for as long as the subject refrained from taking them. We evaluated whether capuchins’ performance decreases: (i) when tested before receiving their daily meal rather than after consuming it (Energy Depletion Experiment), and (ii) after being tested in two tasks with different levels of cognitive complexity (Cognitive Depletion Experiment). We also tested, in both experiments, how implementing self-control in each trial of the Accumulation task affected this capacity within each session and/or across consecutive sessions. Repeated acts of self-control in each trial of the Accumulation task progressively reduced this capacity within each session, as predicted by the Strength Model. However, neither experiencing a reduction in energy level nor taking part in a highly demanding cognitive task decreased performance in the subsequent Accumulation task. Thus, whereas capuchins seem to be vulnerable to within-session depletion effects, to other extents our findings are in line with the growing body of studies that failed to find a depletion effect in humans. Methodological issues potentially affecting the lack of depletion effects in capuchins are discussed.
    Full-text · Article · Aug 2015 · Frontiers in Psychology
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    Rachel Barkan · Shahar Ayal · Dan Ariely
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    ABSTRACT: Ethical dissonance is triggered by the inconsistency between the aspiration to uphold a moral self-image and the temptation to benefit from unethical behavior. In terms of a temporal distinction anticipated dissonance occurs before people commit a moral-violation. In contrast, experienced dissonance occurs after people realize they have violated their moral code. We review the psychological mechanisms and justifications people use to reduce ethical dissonance in order to benefit from wrongdoing and still feel moral. We then offer harnessing anticipated-dissonance to help people resist temptation, and utilize experienced-dissonance to prompt moral compensation and atonement. We argue that rather than viewing ethical dissonance as a threat to self-image, we should help people see it as the gate-keeper of their morality.
    Full-text · Article · Aug 2015
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    ABSTRACT: Since failure of self-control has enormous personal consequences, several models attempted to explain why self-control breaks down. According to the Strength Model, self-control is a limited resource. Previous acts of self-control or taking part in highly demanding cognitive tasks may deplete this resource causing short-term impairments in subsequent acts of self-control. Studies on humans and dogs found that exerting self-control reduces blood glucose levels and that, if self-control is depleted, glucose ingestion can restore this capacity. However, a recent meta-analysis questioned the robustness of the depletion effect in humans. Here we investigated the validity of the Strength Model in capuchin monkeys (Sapajus spp.). We tested five capuchins in the Accumulation task, in which food items were accumulated within reach of the subject for as long as the subject refrained from taking them. We evaluated how exerting self-control in each trial of the Accumulation task affected this capacity over subsequent trials (within-task depletion) and whether capuchins’ performance in the Accumulation task decreases when tested before receiving their daily meal rather than after consuming it (Energy Depletion Experiment) and after being tested in a cognitively demanding task rather than in a less cognitively demanding task (Cognitive Depletion Experiment). In both experiments, capuchins’ performance in the Accumulation task decreased over trials within each session. Hence, as predicted by the Strength Model, capuchins seem to be vulnerable to within-task depletion effects. In contrast, we did not find a significant effect of both cognitive and energy depletion. These results failed to support some previous outcomes obtained in humans and dogs, but they add to the growing body of studies that did not find a depletion effect in humans. This study complied with the Directive 2010/63/EU and was approved by the Italian Health Ministry (DM 12/2011-C and DM 123/214-C).
    Full-text · Conference Paper · Aug 2015
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    Nina Mazar · Kristina Shampanier · Dan Ariely
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    DESCRIPTION: A number of retailers offer gambling or lottery type of price promotions with a chance to receive one’s entire purchase for free. While these retailers seem to share the intuition that probabilistic free price promotions are attractive to consumers, it is unclear how they compare to traditional sure price promotions of equal expected monetary value. We compared these two risky and sure price promotions for planned purchases across six experiments in the field and in the lab. Together, we found that consumers are not only more likely to purchase a product promoted with a probabilistic free discount over the same product promoted with a sure discount but that they are also likely to purchase more of it. This preference seems to be primarily due to a diminishing sensitivity to the prices. In addition, we find that the zero price effect, transaction cost, and novelty considerations are likely not implicated.
    Full-text · Research · Jul 2015
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    Guy Hochman · Shahar Ayal · Dan Ariely
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    ABSTRACT: While both economic and social considerations of fairness and equity play an important role in financial decision-making, it is not clear which of these two motives is more primal and immediate and which one is secondary and slow. Here we used variants of the ultimatum game to examine this question. Experiment 1 shows that acceptance rate of unfair offers increases when participants are asked to base their choice on their gut-feelings, as compared to when they thoroughly consider the available information. In line with these results, Experiments 2 and 3 provide process evidence that individuals prefer to first examine economic information about their own utility rather than social information about equity and fairness, even at the price of foregoing such social information. Our results suggest that people are more economically rational at the core, but social considerations (e.g., inequality aversion) require deliberation, which under certain conditions override their self-interested impulses.
    Full-text · Article · Jun 2015 · Frontiers in Psychology
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    ABSTRACT: Consumers often make product choices that involve the consideration of money and time. Building on dual-process models, we propose that these two basic resources activate qualitatively different modes of processing: while money is processed analytically, time is processed more affectively. Importantly, this distinction then influences the stability of consumer preferences. An initial set of three experiments demonstrate that, compared to a control condition free of the consideration of either resource, money consideration generates significantly more violations of transitivity in product choice, while time consideration has no such impact. The next three experiments use multiple approaches to demonstrate the role of different processing modes associated with money versus time consideration in this result. Finally, two additional experiments test ways in which the cognitive noise associated with the analytical processing that money consideration triggers could be reduced, resulting in more consistent preferences.
    Full-text · Article · Apr 2015 · Journal of Marketing Research
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    ABSTRACT: How do consumers adjust their spending when their budget changes? A common view is that the allocation of one's current budget should not depend on previous budget allocations. Contrary to this, the authors find that when the budget contracts to a particular level, consumers select less variety (as measured by the number of different items with some of the budget allocated to them) than when their budget expands to that same level. This budget contraction effect stems from a reduction in variety under the contracting budget, not from variety expansion under the expanding budget. Evidence from five experiments indicates that the effect is driven by a desire to avoid feelings of loss associated with spreading allocation cuts (relative to reference quantities from previous allocations) across many items.
    Full-text · Article · Dec 2014 · Journal of Marketing Research
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    ABSTRACT: Lying is a common occurrence in social interactions, but what predicts whether an individual will tell a lie? While previous studies have focused on personality factors, here we asked whether lying tendencies might be transmitted through social networks. Using an international sample of 1,687 socially connected pairs, we investigated whether lying tendencies were related in socially connected individuals, and tested two moderators of observed relationships. Participants recruited through a massive open online course reported how likely they would be to engage in specific lies; a friend or relative responded to the same scenarios independently. We classified lies according to their beneficiary (antisocial vs. prosocial lies), and their directness (lies of commission vs. omission), resulting in four unique lying categories. Regression analyses showed that antisocial commission, antisocial omission, and prosocial commission lying tendencies were all uniquely related in connected pairs, even when the analyses were limited to pairs that were not biologically related. For antisocial lies of commission, these relationships were strongest, and were moderated by amount of time spent together. Randomly paired individuals from the same countries were also related in their antisocial commission lying tendencies, signifying country-level norms. Our results indicate that a person's lying tendencies can be predicted by the lying tendencies of his or her friends and family members.
    Full-text · Article · Oct 2014 · PLoS ONE
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    Nina Mazar · Botond Koszegi · Dan Ariely
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    ABSTRACT: A central assumption of neoclassical economics is that reservation prices for familiar products express people’s true preferences for these products, that is, they represent the total benefit that a good confers to the consumers, and are thus, independent of actual prices in the market. Nevertheless, a vast amount of research has shown that valuations can be sensitive to other salient prices; particularly when individuals are explicitly anchored on them. In this paper, the authors extend previous research on single-price anchoring and study the sensitivity of valuations to the distribution of prices found for the product in the market. In addition, they examine its possible causes. They find that market-dependent valuations cannot be fully explained by rational inferences consumers draw about a product’s value, and are unlikely to be fully explained by true market-dependent preferences. Rather, the market dependence of valuations likely reflects consumers’ focus on something other than the total benefit that the product confers to them. Furthermore, this paper shows that market-dependent valuations persist when – as in many real-life settings – individuals make repeated purchase decisions over time and infer the distribution of the product’s prices from their market experience. Finally, the authors consider the implications of their findings for marketers and consumers.
    Full-text · Article · Jul 2014 · Journal of Behavioral Decision Making
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    ABSTRACT: By running an experiment among Germans collecting their passports or ID cards in the citizen centers of Berlin, we find that individuals with an East German family background cheat significantly more on an abstract task than those with a West German family background. The longer individuals were exposed to socialism, the more likely they were to cheat on our task. While it was recently argued that markets decay morals (Falk and Szech, 2014), we provide evidence that other political and economic regimes such as socialism might have an even more detrimental effect on individuals’ behavior.
    Full-text · Article · Jun 2014 · SSRN Electronic Journal
  • Liad Bareket-Bojmel · Guy Hochman · Dan Ariely
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    ABSTRACT: The use of short-term bonuses to motivate employees has become an organizational regularity, but a thorough understanding of the relationship between these incentives and actual performance is lacking. We aim to advance this understanding by examining how three types of bonuses (cash, family meal voucher, and verbal reward) affect employees’ productivity in a field experiment conducted in a high-tech manufacturing factory. While all types of bonuses increased performance by over 4%, non-monetary short term-bonuses had a slight advantage over monetary bonuses. In addition, the removal of the bonuses led to decreased productivity for monetary bonuses but not for the verbal reward. However, this negative effect of monetary short term-bonuses diminishes when a cash bonus is chosen by employees rather than granted by default. Theoretical implications about the effect of short-term bonuses on intrinsic motivation and reciprocity, as well as practical applications of short-term bonus plans that stem from our findings are discussed.
    No preview · Article · Apr 2014 · Journal of Management
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    ABSTRACT: Recent evidence suggests that Americans underestimate wealth inequality in the United States and favor a more equal wealth distribution (Norton & Ariely, ). Does this pattern reflect ideological dynamics unique to the United States, or is the phenomenon evident in other developed economies—such as Australia? We assessed Australians’ perceived and ideal wealth distributions and compared them to the actual wealth distribution. Although the United States and Australia differ in the degree of actual wealth inequality and in cultural narratives around economic mobility, the Australian data closely replicated the United States findings. Misperceptions of wealth inequality as well as preferences for more equal distributions may be common across developed economies. In addition, beliefs about wealth distribution only weakly predicted support for raising the minimum wage, suggesting that attitudes toward inequality may not translate into preferences for redistributive policies.
    Preview · Article · Apr 2014 · Analyses of Social Issues and Public Policy
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    Guy Hochman · Shahar Ayal · Dan Ariely
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    ABSTRACT: Although research on loss aversion now spans more than three decades, researchers are still debating whether (or in which cases) the finding holds true for money. We contribute to this debate by exploring how prepayment affects financial decisions. In one set of experiments, we show that when faced with a tradeoff between post- and prepayment, participants overvalue prepaid money, and sometimes even prefer it over objectively higher gains. Importantly, this effect was more pronounced when prepayment was more distant from its pure representation in dollars and cents (Experiment 1A), as well as when potential losses were directly linked to specific options (Experiment 1B). As far as the processes involved, our results suggest that prepayment leads to increased personal commitment to prepaid options (Experiment 1 C). In a second set of experiments, we show that even when the tradeoff element is eliminated, participants are more motivated and engaged in a task that is prepaid rather than post-paid (Experiments 2A and 2B). Based on our findings, we discuss how firms can use prepayment mechanisms to get more out of their agents, and how individuals can be motivated to better utilize their money.
    Full-text · Article · Feb 2014 · Journal of Economic Behavior & Organization

Publication Stats

8k Citations
393.38 Total Impact Points

Institutions

  • 1999-2015
    • Duke University
      • Fuqua School of Business
      Durham, North Carolina, United States
  • 2000-2009
    • Massachusetts Institute of Technology
      • MIT Sloan School of Management
      Cambridge, Massachusetts, United States
  • 1995-2009
    • University of North Carolina at Chapel Hill
      • • Kenan-Flagler Business School
      • • Department of Psychology
      Chapel Hill, NC, United States
  • 2003
    • Carnegie Mellon University
      • Department of Social and Decision Sciences
      Pittsburgh, Pennsylvania, United States