Real Case Stories

Silent Spring , published in 1962, galvanized a whole nation, started the environmental revolution and brought upon the ban of one of the most valuable chemical ever, DDT. Once nicknamed as a "miracle weapon" against insect-borne diseases, in the 1950's DDT was extensively promoted by the US government and industry for use as an agricultural and household pesticide. In 1957, the U.S. Department of Agriculture (USDA) sprayed the northeastern forests with a mixture of DDT and oil to eradicate an insect pest – the gypsy moth. A month after spraying, residents on Long Island filed suit in federal court charging that the DDT was killing fish, birds, farm and garden crops. It was then that the Audubon Naturalist Society, a non-profit dedicated to conservation and education, actively opposed to such spraying programs, and recruited Carson to help make public the government's exact spraying practices and the related research. Carson began the four-year project of what ...

In his book " The Honest Truth about Dishonesty ", author Dan Ariely writes about the Psychology of Dishonesty. Why are people dishonest? Why do people cheat? Is it for reward? He feels that most of us are inherently dishonest at some level and more than reward we weigh the pros and cons of getting caught. Weighing the cost benefit analysis is more important than the consideration of right or wrong. One simple example is about Parking in a no Parking zone. How often have all of us done this? If we have to rush for a meeting, we weigh the costs of getting a parking ticket versus costs of going late for a meeting. It's not about right or wrong. He created this model called SMORC - Simple model of Rational Crime. In some of the experiments that Dan conducted, he found that incentive for crime was not a motivation. However the risk of not getting caught was the real driver in such cases. In this video below, Dan speaks about his SMORC model and some case stu...

This NYTimes story cites a very interesting case of a Toll collector strike in England. During the strike drivers were just asked to put the toll money into a collection box. Surprisingly the government collected more told money during the strike. This indicates that the drivers were fairly honest but also indicated that the Toll collectors had been stealing a lot of money.

Paul Feldman, an Economist, was a Director research at a firm. He used to love Bagels and carried a few extra for his colleagues at work. Soon employees from the neighboring floors heard about it and they would want some too. So, he started bringing more bagels to work and would leave out a cash basket to recover his costs. His collection rate was about 95%. After a point of time people would refer to him as the Bagel man instead of his fancy Director Research position. Soon he quit his job and decided to get into the Bagel business. He drove around offices delivering Bagels early in the morning and would leave a cash basket in the company's snack room. He would return around Lunch and pick up the money and leftovers. It was an honor system. Within a few years he was delivering around 10,000 bagels a week to 140 offices. He also inadvertently designed a beautiful economic experiment. By measuring the amount of money collected he could tell how honest his customers ...

According to a study by Amos Schurr at Ben-Gurion University of the Negev and Ilana Ritov at The Hebrew University of Jerusalem, Winning a competition makes people more likely to later behave dishonestly Winning a competition engenders subsequent unrelated unethical behavior. Five studies reveal that after a competition has taken place winners behave more dishonestly than competition losers. The following are the key highlights of the study Winning a competition increases the likelihood of winners to steal money from their counterparts in a subsequent unrelated task.   The effect holds only when winning means performing better than others (i.e., determined in reference to others) but not when success is determined by chance ie. a Lottery or in reference to a personal goal.  A possible mechanism underlying the effect is an enhanced sense of entitlement among competition winners. The authors also cites the case of the recent Volkswagen scandal .  The k...