The honest truth on money, money, money...

25 June 2019

Interview with 

Alain Cohn, University of Michigan

WINNING-MONEY

Woman holding money

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If you found a lost wallet or purse, would you give it back? To find out how honest people are around the world, Swiss and American researchers intentionally “lost” wallets in many countries to see what would happen to them. They’ve just published the results in the journal Science, and Phil Sansom spoke to one of the authors, Alain Cohn, to get the honest truth.

Phil - Money: supposedly the root of all evil. But can it ever bring out the best in people? Here's a question: if you lost your wallet would having money inside it make it more likely to get back to you or less likely?

I've no idea.

Probably less. I think it will be more tempting for people to want to keep it.

Less. Because there's a lot more money in there and people are not as honest enough as they used to be.

People generally are goodhearted and would want to return it. I hope so.

Phil - Some people think more likely, some people think less likely. Well, according to a new study the answer is actually more likely to get back to you. Surprised? Well, here's one of the authors of the study Alain Cohn to explain why...

Alain - In 2013 we had a bachelor student and he was spending an exchange semester in Finland. We seized this opportunity and asked him to turn in lost wallets at the counter of various public and private institutions, and specifically we hypothesised that higher incentive to steal would reduce the level of honesty.

Phil - That didn't happen did it?

Alain - No. Much to our surprise we observed the opposite effect. Across the board, people were more likely to return a wallet when it contained a higher amount of money. At first we almost couldn't believe it and told him to triple the amount of money in the wallet. Yet, we again found the same puzzling finding and so this was the beginning of a long journey as we wanted to better understand this result. Overall we had 40 countries and 355 cities. We turned in more than 17,000 wallets. We varied the amount of money in the wallets and the wallets were transparent so people exactly knew what’s inside.

Phil - Where did you turn them in?

Alain - Banks, cultural institutions like museums and theatres, post offices, public institutions like, for example, the police station. We hand them over directly to a person working at that particular institution.

Phil - How would they know where to return the wallet?

Alain - The wallet contained three identical business cards that would signal who the owner is. We created unique email addresses for each wallet. Basically every time we received an email we knew exactly which wallet we were talking about

Phil - Wow. You're really covering all your bases there!

Alain - We tried. I mean it was an expensive experiment so we tried to maximise the outcome.

Phil - How expensive?

Alain - About $600,000. The money in the wallets cost us about $135,000. It sounds like a lot but there are other fields where researchers have to purchase equipment and materials like, for example, an fMRI scanner and that can be much much more expensive. And this is one of the first studies who measures honest behaviour in an everyday life situation where people don't know that they're being observed.

Phil - So you did this upwards of 17,000 times, what did you find?

Alain - About 40% of the wallets were returned. Adding a small amount of money, that rate increased to 51%, if we included almost $100 in the wallet that number increased further to 72%.

Phil - Were you shocked?

Alain - We were surprised to replicate the effect across almost 40 countries.

Phil - So what does it mean? Why aren't people just seeing the money and being like no one's going to know, I'll take that?

Alain - There are two key factors that play a role here. The first one is altruism, you don't want to hurt someone else so that can motivate you to return the wallet, especially when there is no many inside. But adding money completely changes the psychology because now there is a second component, people don't want to see themselves as dishonest people. This psychological cost increases with the amount of money in the wallet, so this force becomes stronger the more money there is in the wallet, and this gives this unexpected finding.

Phil - So not only do you not want to be a thief, you don't want to look like a thief? How do you know you won't just measuring what people behind the counters of these buildings would do rather than just like everyone?

Alain - There evidence speaks a little bit against that. So we took alternative proxies of dishonest behaviours such as, for example, tax evasion or corruption of public officials. And so what we find is a strong correlation between our measure of dishonest behaviour and these other proxies, and so this gives us confidence that we capture a more general behaviour.

While we cannot really say whether we measure people's behaviour in their private role or in their professional role, I think both is interesting. They care about being seen as an honest person.

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