Can deceiving others increase self-deception?

Yes, says Predictably Irrational author Dan Ariely:

Researchers have documented many cases in which individuals rationalize their regrettable actions. Four experiments examine situations in which people go beyond merely explaining away their misconduct to actively deceiving themselves. We find that those who exploit opportunities to cheat on tests are likely to engage in self-deception, inferring that their elevated performance is a sign of intelligence. This short-term psychological benefit of self-deception, however, can come with longer-term costs: when predicting future performance, participants expect to perform equally well—a lack of awareness that persists even when these inflated expectations prove costly. We show that although people expect to cheat, they do not foresee self-deception, and that factors that reinforce the benefits of cheating enhance self-deception. More broadly, the findings of these experiments offer evidence that debates about the relative costs and benefits of self-deception are informed by adopting a temporal view that assesses the cumulative impact of self-deception over time.

Source: “Temporal view of the costs and benefits of self-deception” from PNAS March 7, 2011

Basically: people cheated, got a high score and then attributed the high score to being smart, not to cheating. When asked to predict how they’d do on another test (without the answers) cheaters made higher predictions than non-cheaters.

“How can they ignore the fact that they cheated?” you ask? Never underestimate the power of cognitive dissonance or rationalization.

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