Plausible deniability is the situation where a person has the freedom to deny knowledge of wrongdoing.
The book The Righteous Mind, describes it like this:
Many psychologists have studied the effects of having “plausible deniability.” In one such study, subjects performed a task and were then given a slip of paper and a verbal confirmation of how much they were to be paid. But when they took the slip to another room to get their money, the cashier misread one digit and handed them too much money. Only 20 percent spoke up and corrected the mistake.
But the story changed when the cashier asked them if the payment was correct. In that case, 60 percent said no and returned the extra money. Being asked directly removes plausible deniability; it would take a direct lie to keep the money. As a result, people are three times more likely to be honest.
You can’t predict who will return the money based on how people rate their own honesty, or how well they are able to give the high-minded answer on a moral dilemma...
In his book Predictably Irrational, Dan Ariely describes a brilliant series of studies in which participants had the opportunity to earn more money by claiming to have solved more math problems than they really did. Ariely summarizes his findings from many variations of the paradigm like this:
"When given the opportunity, many honest people will cheat. In fact, rather than finding that a few bad apples weighted the averages, we discovered that the majority of people cheated, and that they cheated just a little bit."
People didn’t try to get away with as much as they could. Rather, when Ariely gave them anything like the invisibility of the ring of Gyges, they cheated only up to the point where they themselves could no longer find a justification that would preserve their belief in their own honesty.
The bottom line is that in lab experiments that give people invisibility combined with plausible deniability, most people cheat.
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