 Thank you all so much for being here. I'm happy to represent the economics department and Tilwick University more broadly. And I'll be talking about something very cool tonight, which you badly need, namely a refrigerator. And not just any refrigerator, no. My talk revolves around the refrigerator at the economics department, believe it or not, which is at the K Building, it's the Koopmans Building, an economist, on the third floor. Now, as you can see, it's not too fancy. Yeah, this is a university. So, you know, we can do with a not too fancy fridge. But what makes this fridge so special is that it is part of a so-called honor-based commerce scheme. Yes. So, you know, in more popular terms, a self-checkout. And you may be familiar with self-checkouts in your local grocery store or at the department store. The idea is that you are the cashier. So, you actually scan your items and then pay what you owe, right? So, similarly, at that fridge in our department, whenever you take a soda can out of the fridge, then you note it actually on one page, which is on the front door of the fridge. You may have seen that here, right? And so, you actually tell behind your name the number of cans that you took out. That's the idea. And obviously, why should you do so? It's a small deal, but you may have some self-reputation. You want to be known to yourself as being an honest person who tellies whenever you take something out. Because otherwise you would be stealing from the department. And you may not want to be seen by colleagues taking a can out and just walking away. And then it's only 60 cents per can, so it's a pretty good deal that the secretary struck there. But that may make it even worse, right? Why are you being so, you know, 50 or just for those 60 cents? Now, one day I had an idea. So I got together with secretaries to help me. So what they then did is count the telly on front of the fridge every day in the morning. So at 9 a.m., they would count how many cans were taken away according to the telly of my colleagues. And you can only be at the economics department to actually be here on the list, right? If you're some student, you're not supposed to be here. And they would actually also note the actual number of cans in the fridge. And you may feel something coming. So, and then what I did was very simple. At one of the two fridges that we have, I had a pen on one, some days I had a pen hanging down from the door of the fridge. And all the days I removed the pen. Now, I had one fridge on the fourth floor as a control. So that was always a pen hanging down from the door. So that was the very first picture I started with. And you can clearly see it. So here we are in the treatment situations that there's this pen. Now, guess what happened? And I'll show you a nice graph. Here you go. So whenever I took the pen away, well, let's call it theft. You know, the theft rates went up a great deal. And so, apparently, my colleagues said that the very same people who tended to be pretty honest when it was easy were not so honest when it was a little more difficult. And so that was pretty striking, right? That those small things can make a major difference. So it seems like as soon as I remove the pen, their principles also go out of the window. Now, the real challenge in this situation is, would you have thought about this pen being so important? So when you would have looked at the pantry and this honor-based commerce scheme, would you have guessed that the pen would have made such a difference? And that's the topic that I'm studying. Those situational factors tend to be very important and maybe more important than our own individual dispositions. So we tend to believe of ourselves that we are very principled people and our father and mother told us things, but maybe all of those beliefs in the end do not matter that much after all. But aren't there then good and bad guys? There's lots of evidence showing that it matters when you have the right friends, alumni, for instance. That helps. Or you had a great upbringing. You had good parents. And it also matters what your mother did when she was pregnant. And it also matters what happened before and then I mean genes. So that is all true. It all matters. But being bad only shows when you have the opportunity to be bad. So when you live in an environment with very few incentives to do the bad thing, you may seem like a very honest, good person. But as soon as I change something in an environment, it turns out that you're a little different from what we thought and maybe what you thought yourself. And as it turns out, I have lots of those. Bad colleagues. Once I give them the opportunity to be dishonest, they immediately fall for it. Now, what are the implications? Well, the first implication is that labeling people as honest or dishonest or more generally as good or bad is problematic because we observe them only in one situation and that doesn't tell us how this person is in another situation. So that is one thing. Another thing is that we may be not so unique as we think that of course we're very proud of the town or the city where we were born and our parents, et cetera, et cetera and we tend to believe that we are very unique human beings but it seems like that we act very similarly given the situation. The idea is that I can change your behavior by changing a few things in the environment in which you daily operate. Now, so if you want to prevent fraud, then it may be interesting to look at the situation in which fraud is committed and not focus too much on all those individual dispositions, about your religion, your morals and all that but look at what actually happens when you take the wrong decision. And for my research, I'll give you three examples mainly from my own research. I tend to do field experiments like the one at the pantry here at the economics department, there's lots of fun to do and also you can really test ideas in a true field setting. You can really see in the real world, do those ideas actually fly? Now, the first idea is invite good behavior and not bad behavior. Now, that sounds very trivial, right? Why would you ever invite bad behavior? Well, there's lots of organizations that do so actually. And there's a field experiment and that's why a colleague, Bas van der Klau in Amsterdam and they made it a little more difficult to get social benefits. So when you're unemployed, you are eligible for social benefits and they just say, okay, you have a four week search period and if you then not have found the job then you will get your money after all. So yeah, because you're eligible for the money by law but they just made it create a little threshold for people before they get this money and it had a major effect on behavior. And what I did with a colleague from Erasmus University is that we invented this magnet for your fridge and on the magnet it says the number to call for discarded household items. And you're supposed not to just dump your couch on the street what to call for pickup by municipality. Well, lots of people have trouble with that and why not make this easier by just putting up the phone number right on the fridge? And that also made a difference. It's a very small thing but with a big effect on behavior. Now secondly, make reasons not to do the wrong thing, salient. So this is a field experiment also in Rotterdam and it continues on that example of illegal disposal of garbage at those shared garbage containers and major irritant of many people also here in Tilburg actually. But what these law enforcement officers do is they put large yellow warning labels on illegally disposed garbage saying under investigation. Now just making it very salient that there is a chance of getting caught and there's a penalty, right? Because otherwise and it holds in many situations law enforcement is pretty much invisible. Now whoever tends to work and has a family and all that there's a very small chance of actually seeing a police officer and whoever gets fined usually does not share that information with the whole neighborhood. So basically law enforcement tends to be very invisible. In this way we make it very visible and we make it visible at places where it matters, right? Because where do you see all those warning labels at the places where all the rubbish is? Now thirdly that prevent easy excuses and a very popular excuse is well, I didn't know. So together with the Ministry of Social Affairs and the Hague we have a field experiment together with center data actually who is doing the actual work fortunately informing actively informing people that if their household situation changes that it has large consequences for their social benefits. So this is a reminder so that people do not make mistakes of sort of really forgetting about it or sort of half forgetting about it. Because the problem in the analysis now that the penalties for getting too much, too high social benefits are enormous. So we've got lots of very poor cases where judges have to apply very huge, very large penalties to very poor people. Whereas this more active approach may help people to make the right decision just to help them doing something that they would have wanted after all. And another popular excuse is well, everybody is doing it so it must be okay. So that is why there is a massive effort in Tilburg in any city of the Netherlands of cleaning the streets because clean, keep clean. If you do not give the bad example, it's much less likely that people do the wrong thing. We tend to copy each other's behavior. Now, so to conclude, so next time you're dealing with fraud that it may be at your office, it may be someplace else, study the context in which people make decisions and then change the context. Make the right thing, the easy, the default option, prevent easy excuses and make the bad consequences of wrong behavior salient. So it's been proving to be a very effective way in changing behavior and remember it's a lot easier to change the situation than people. Thank you so much.