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Behavioural Processes 84 (2010) 516520

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Behavioural Processes

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Anatomy of deception: A behavioral contingency analysis

Francis MechnerThe Mechner Foundation, 200 Central Park South, 18E, New York, NY 10019, United States

a r t i c l e i n f o

Article history:Received 1 September 2009Received in revised form 3 February 2010Accepted 4 February 2010

Keywords:DeceptionMisperceptionMistaken predictionEconomicsProperty transferPonzi schemesDerivatives and securitizationMilitary operationsIntentionalityTheory of mind

a b s t r a c t

Deception, a basic and pervasive biological phenomenon, takes many forms, variously referred toas mimicry, trickery, seduction, pretense, feigning, masquerading, impersonation, distraction, or falsepromises, and these share certain common distinguishing behavioral elements that permit them to beclassied into categories. A symbolic language for the codication and analysis of behavioral contingen-cies shows that all instances of deception are based on a misperception, misprediction, non-perception,or non-prediction by the deceived party, and can be further categorized based on features of the contin-gencies that dene them. Instances of particular interest are those in which a deceiving party predicts(and in that sense intends) the deception. In those instances, the effect of the deception is usually tothe deceiving partys benet and to the deceived partys detriment.

In economics, nance, business, military operations, public affairs, education, and everyday socialinteraction, deception takes numerous forms. Special forms, usually involving obfuscation, concealment,counterfeiting, and misrepresentation, occur in certain prevalent types of property transfer, includingsecuritization, the creation of derivatives, and various types of Ponzi schemes. Such property trans-fers tend to be driven by opportunities for deception. They all involve blurring and clouding of thecontingencies that dened the transferred properties, thus permitting their obfuscation.

2010 Elsevier B.V. All rights reserved.

1. Introduction

Deception is an essential and pervasive biological function thatevolved as an integral part of the behavioral repertoires of mostanimal and some plant species (Bergstrom, 2008). In general, thedeceiver secures benets to the detriment of the deceived by oper-ating on the latters behavior. The multiple forms of deception aredescribed by such terms as mimicry, trickery, seduction, pretense,feigning, concealment,masquerading, distraction, obfuscation, anddiversion of attention. Instances include insect camouage, theVenus ytraps deception of insects as it lures them into its blos-som, and predators stalking prey. Deception is also pervasive inhuman affairs, manifesting itself in most social interactions, evenat the level of subtle facial expressions and gestures (Depaulo andFriedman, 1998).

Application of a formal language for the codication and anal-ysis of behavioral contingencies (Mechner, 2008a,b, 2010, sectionDeception and Entrapment) shows that all forms of deceptionshare certain features that identify them as such and that dis-tinguish them from other categories of contingency. Contingencyanalysis reveals instances of deception in a wide range of humanaffairs includingeconomics, business, nance, education, sociology,health, law, military operations, and public policy.

E-mail address: fmechner@panix.com.

For the convenience of readers who are not familiar with thebehavioral contingency language, a brief review of the particularfeatures of the language that are used in the present analysis isprovided in Appendix A.

2. Varieties of deception and their classication

In all instances of deception, the deceived organism responds toa stimulus event as if it were a different one,1 often to its detriment.Non-detrimental instances are harmless optical illusions or amagi-cians tricks. In all instances of deception, the stimulus event can beoccasionedby the inanimate environment (e.g., a desertmirage, themoon illusion) or by another organism. When by another organism(thedeceiver), the responseof thedeceived is usually advantageousto thedeceiver, andusually (butnot always) disadvantageous to thedeceived. Instances of harmless deception are parent telling childthat Santa Claus will come, or arranging a surprise birthday party.Familiar instances of deception detrimental to the deceived partyare frauds or cons. Application of the formal language for the anal-ysis of behavioral contingencies reveals the myriad varieties andnuances of deception we see in human affairs and in nature gener-ally, and their detailed features and dynamics, and suggests waysto organize them.

1 i.e., in a way it has learned or been genetically programmed to respond to adifferent one.

0376-6357/$ see front matter 2010 Elsevier B.V. All rights reserved.doi:10.1016/j.beproc.2010.02.003

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Of particular interest are the forms of deception seen in thecommon types of property transfer that comprise the domains ofeconomics and nance. By revealing detailed structural similaritiesand differences, the language provides a system for categorizingthese varied instances of deception, much as it provides rationalesfor categorizing the behavioral contingencies that dene otherelds (e.g., Mechner, 2009, 2010, section Categorization of Behav-ioral Contingencies).

3. Formal denition of deception

This paper focuses on the forms of deception that involveone individual a performing an act A that results in individualb misperceiving, failing to perceive, mispredicting, or failing topredict a consequence C, and/or some of Cs modiers.2 Suchmodiers may include Cs valences for a and/or b, and thetime delays, probabilities, and magnitudes of C and/or Cs modi-ers.

Intent: If an acts agent a predicts the C or any of the Cs mod-iers, a is said to intend these (Mechner, 2008, 2009, 2010,section Deception and Entrapment). In intentional deception,the deceptive acts agent a predicts that another party b wouldmisperceive, not perceive, mispredict, or not predict C (or some ofthe Cs modiers.) In the diagram at the right, the a s shownin the upper left quadrantsof the b and the bx show that apredicts bs perception of C andmisprediction of the negativevalence. The present analysis will focus mainly on instances ofintentional deceptionthose in which a both predicts the C (orany of the Cs modiers) and also predicts bs misperception, non-perception, misprediction, or non-prediction.

These are some common and familiar instances of intentionaldeception:

Deception in everyday communication: If a listener a nodsduring a verbal interaction to indicate agreement or understand-ing, even when he does not agree or understand, the speakerb may3 be deceived into misperceiving the effect he is having.The a in the bs upper leftquadrant indicates that thelistener would predict this misperception.

Deception regarding the valence: In many instances of deception,the deceived party misperceives or mispredicts not the conse-quence itself, but its valence, as when offered a fake (for afuller discussion of this distinction, see Appendix A, no. 18;Mechner, 2008a, pp. 128; and also the section below Selling acounterfeit). In the diagram at the right, deceiver a would pre-dict that the deceived party b would perceive the C, and would,at the same time, misperceivethe Cs negative valence (Note theas in the bs upper left quadrants,which indicate the intentionalityof the deception). Misperception of the valence can also involvemisperception of the valences magnitude. Examples are a predict-ing that b would mispredict the Cs negative valence but perceive Ccorrectly, as when offering a poisoned food item or an overvaluedmortgage.

2 The current literature ondeception focuses almost exclusively onmisperceptionas the dening dynamic (e.g., Brumley et al., 2005; Pope et al., 2006; Vrij, 2008). Thepresent analysis shows that there are also many common types of deception inwhich non-perception, misprediction, and non-prediction are involved.

3 The contingency language can also express the nuance that deception is notcertain to occur by including a probability symbol p as an attribute of the C, but thisnuance will not be explored in the present analysis.

Masquerading or impersonation is said to occur if a performs anact A1 that causes b to misperceive that a is the agent of act(s) A2,and a predicts bs misperception. Partya could be a suicide bomber donning afriendly uniform (A1) and then posingas a friendly soldier (A2).

False promises usually involve some type of deceptive statementaA. If a made such a statement with intent to deceive, a would pre-dict that b would mispredict the promised event C and/or one ofCs modiers, like its valence for b. In thediagram at the right, a legend referencingsubscript 1 may explain that b wouldpredict the occurrence of a C that has a certain positive valence.The same contingency also describes many types of military oper-ations and ghting, where deception is employed to cause theenemy to mispredict an action, as in WWII when the Allies inten-tionally caused the Germans to mispredict the Normandy landingsites (Haswell, 1979). If the invasion itself had come as a completesurprise, with the Germans not predicting any landing at all, theabx modier would be formuilated as ab. Any surprise can be con-ceptualized as a deception in the limited sense of an unpredictedevent occurring in circumstance C.

A false promise can also involve an action that creates a mis-prediction or non-prediction of the length (magnitude) of a timedelay of a desired C, aswhenthe boss promises a raisethat does not materialize,or an investment advisor hypes an investment that does not workout within the promised time. Note that in these cases it would bethe magnitude attribute M of the T that is being mispredicted.

A related contingency is the time bomb, where a mispre-dicted or unpredicted negativeconsequence occurs after aperiod of time, withouthaving been signaled.

Indirect deception: In many types of deception, including falsepromises, the consequence C1 of as act is not itself detrimental tobbut sets theoccasion for anactbybwhose consequenceC2 (and/orits modiers) would be detrimental to b and mispredicted, not pre-dicted, misperceived, or not perceived by b. In the diagram at theright, note that b would perceive C1 accurately and would respondto it normally, but would mispredictthe consequence C2 of bs responseto C1 (bA), as when walking into atrap. a would predict bs (correct)perception of C1 as well as bsmisprediction of the consequence C2 of bs action.4 A familiar con-tingency of this type is the booby trap, where b would perceive C1accurately but mispredict the immediate or delayed negative effectof a certainactbA. Another example: ifa sellsbanunaffordable sub-prime home equity loan in circumstance C1, which could includethe small print in the contract (whichbmightnot perceiveormisper-ceive), then b would commit to the mortgage (bA), to bs eventualdetriment, and mispredict or not predict C2.

A closely related set of indirect deception contingencies arethose in which b accurately perceives an immediate consequenceof an act bA but would mispredict or not predict a delayed conse-quence C2, as when being seduced or purchasing a bad investment.The misprediction or non-prediction could also be a modier ofthe delay interval or of some attribute of C2 like its probability, itsmagnitude, or the magnitude of its valence.

4 The term action is used in the sense of act and its consequence. The termact by itself does not imply a consequence.

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Disguising a situation, misrepresenting facts, hiding a danger:Here b would normally perceive situation C,but if aA, then b would not perceive Cb

(Note the b). Thus aA would prevent bfrom perceiving Cb. Examples: a potentialprey using camouage, an employeelooking busy when the boss is watching.

Deceptive advertising: This diagram of indirect deception has theadded feature that probabilities modify bs perception of C1 andbs response bA, to emphasize that b may not see the ad, and if bdoes,may still notperformactbA. Deceptive advertising canalso involve a misrepresen-tation (in C1) of the deliverytime, causing b to mispredictor not predict the delivery delay.

Selling a counterfeit: When a tries to sell b a counterfeit, botha and b would perceive C3 correctly, but b would misperceiveattribute M4 of C3. M4 canrepresent value or someother attribute of C3 thatb might care about. awould predict andperceive bs misperceptionof M4. bs response A2could be the purchase of the counterfeit withconsequence C5 (perhaps then owning a worthless item).

Trickery: Odysseus, when besieging Troy, is said to have con-ceived the following deception: If we (a) build a giant hollowwooden horse and leave it for the Trojans (b) to nd, they may

misperceive the horse (as being empty rather than lled with oursoldiers) and take it into Troy. Here Odysseus (a) is predicting bspossible misperception. His uncertainties regarding the success ofthe deception, i.e., the Trojans misperception of Chorse and theirconsequent action bAtakes in are reected in his predicted (i.e.,estimated) probabilities ap1 and ap2.

Unintentional deception: As mentioned, deception can alsooccur without intent, i.e., without any party predicting a mis-perception, non-perception, misprediction, or non-prediction.Example: if policeman a sees a suspicious character b, representedby aC1, he may try to arrest him (aA3). If b then reaches into hispocket (bAreaches) to pull out his identication (C2), then in the Tseconds this would take, the policeman could misperceive C2 andshoot b.

Clearly, b would not have predicted as misperception of C2(the consequence of bAreaches) though that act deceived a.Unintentional deception can also occur without a negative con-sequence for any party (e.g., if the policemans gun had beenunloaded.)

Property transfers: A property transfer is a certain type of changein the behavioral contingencies that dene an item of property.An item of property is always a set of contingencies. The con-tingencies include all of the potential acts of the owner a andof all non-owners b (i.e., the rest of the world), and the conse-quences of these possible acts, including their positive andnegativevalences, as well as their potential time delays and probabilities ofoccurrence.

The diagram at the right shows that some of the acts availableto a have positive and some have negative consequences for a. Thediagram alsoshows that allof the actionoptionsavailable to bhaveindeterminateconsequencesfor btheymay benegative,neutral, orpositive. Italso showsthat certainacts by a, termed obligations, can avert negative consequences thatmight otherwise occur due to actions by external agents e and/orthepassageof time.Aproperty transfer can involvechanges in someor all of as and bs action options (rights, prohibitions, or obliga-tions) and in their consequences, including their effective values.For a fuller explanation and discussion of the property contingency,seeMechner (2010), section Deception in Economics andFinance.

Deception in property transfer: Many types of property transferprovide the transferor a with opportunities and vehicles for decep-tion. The most important types of property transfer in the world ofbusiness and nance are aggregation, partitioning, and multiple-stage property transfers. Aggregation is puttingmultiple propertiestogether into a single larger unit of property (e.g., bundling). Parti-tioning is splittingupproperties into smallerunits (e.g., subdividinga building into condo units, selling lottery tickets, issuing cur-rency). All three of these types of property transfer inevitably blurand cloud the contingencies that dened the individual transferredproperties prior to transfer, and therebyprovide the transferorwiththe opportunity to deceive, by obfuscating (causing non-perceptionor misperception) the relevant contingency elements of the trans-ferred properties.

In the general diagramof property transfer below, the transferoris a and the transferee is b. The property transfer may be

aggregation, partitioning, or multiple-stage. The a at the upper leftof b shows that a would predict (therefore intend) this deceptiveconsequence.

Example: If lender a issues mortgages and, when some of thesebecome inadequately secured, aggregates them intonewsecurities,thereby obfuscating the true values and dening contingencies oftheunderlyingmortgages, hemay thenaggregate thesenewsecuri-ties into further aggregateswhich he then partitions into other newsecurities that a can then transfer (e.g., sell or offer as collateral) toother parties. The effect is that the values of the original transferredmortgages become increasingly obfuscated at each stage of trans-

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fer, with the result that their original values become impossible toascertain.

Ponzi schemes: If a fund manager like Bernard Madoff aggre-gates investments (properties) and then partitions this aggregateinto (a) overvalued withdrawal rights and interest entitlementsthat he issues to his investors, and (b) funds that he takes forhimself, the investors will be deceived. The acts of aggregationand partitioning obfuscate (cause the investors to misperceive)the value of their withdrawal rights and interest entitlements,and thus cause the investors to mispredict the consequenceof trying to exercise those rights, all of which the transferorpredicts.

An important conclusion that one candraw fromthe above anal-ysis is that the most important instances of property transfer in thebanking and nancial sectors are driven by the rewards of someform of deception and cannot be made transparent, in principle orin practice. Such a conclusion may have implications for the designof regulatory policies.

Theory of mind situations: Behavioral phenomena described bythis term always involve an individual perceiving and/or predict-ing another individuals perception of, prediction of, or reactionto a valence or other modier of a situation or circumstance(Baron-Cohen,1989;Wellmanetal., 2001).Many instancesof inter-personal deception involve individual a acting in a way that causesindividual b to misperceive, not perceive, mispredict or not predicta perception or prediction, or a reaction to a valence (for a fullerdiscussion, see Mechner, 2010, section The Recursive SyntacticStructure).

4. Progressive or gradual deception

Many types of deception involve repetitive acts by a deceiver,with every repeated occurrence of an act causing an incremen-tal change in the magnitude or probability of a consequence.The cumulative effect of small increments may be to increaseor decrease the deceived partys misperception, non-perception,misprediction, or non-prediction of the consequence, gradu-ally or suddenly. Examples from nature that involve decreasesinclude a preys diminishing misperception of a stalking preda-tor, with a growing and then sudden realization of a danger.Examples from human affairs include the growing trail of increas-ing evidence that can be created by a long-term pattern ofembezzlement, and the long-term interpersonal dynamic some-times termed disillusionment (a diminishing misperception).Examples that involve increasing misperception: the effects ofrepetitive exposure to a lie or false rumor, a victim beinglulled into a false sense of security, or the changing per-ception of value during the formation of a market bubble.The formal contingency language provides a variety of tech-niques for codifying and analyzing these types of contingencies.The registration of cumulative effects of small incrementalchanges is illustrated in section 6 of Mechner (2008a,b) and inMechner (2010), section Recycling Contingencies and ChangingConsequences.

Evenwhen the change in themisleading situational cues is grad-ual and cumulative, a misperception or misprediction can occursuddenly and discontinuously as it becomes a correct perceptionor prediction, or vice versa. Such effects can be complex and, likeall misperceptions or mispredictions, can be described in the dia-grams legend as fully as desired.

5. Categorization of the forms of deception

The present behavioral contingency analysis of deception sug-gests that all forms of deception are based on some combination ofmisperception, non-perception, misprediction, or non-prediction.

Regardless of the particular category or combination of categoriesinto which a particular form of deception may fall, it can becategorized further in terms of some combination of these sixattributes:

Disadvantageous to the deceived, or not. Direct or indirect. By an animate or inanimate agent. If animate, intentional or unintentional. Gradual or sudden. Involving an immediate or delayed consequence.

The diagram of an intentional deception would include anabx or ab modier. In summary, application of the formal sym-bolic language for the analysis of behavioral contingencies showsthat deception is a clearly denable biological function thattakes many speciable forms, all of which fall into four behav-iorally dened categories which are further subdivided into sixothers.

Appendix A.

1. Ameans If act A occurs then . . . (a consequence).2. Every A is preceded by an implied if.3. aA means act A would be performed by party a.4. abA means act A would be performed jointly by a and b.5. AC means that C would be the consequence of act A.6. Positive valence, C+, can mean benecial, desired, positively

reinforcing. Negative valence, C, can mean harmful, hurtful,aversive, punishing. The party(ies) that would be affected bythe valence(s) are indicated in front of the valence sign: Ca+,Cb, Cab.

7. TC means upon termination of time T . . .. Example: Afterthe egg has boiled for 10min, it will be hard boiled.

8. Cp Here p is the probability, in the analysts estimation, that Cwould occur.

9. A bracket around vertically listed As, Ts, or Cs indicates simul-taneity. The order of listing has no signicance.

10. In AM, the M could refer to effort level, effectiveness, duration,rate, frequency. In C(a+)

M, M refers to the magnitude of the pos-

itive valence for party a. In CM, the M attribute can refer to anyscalable dimension of the consequence (e.g., loudness, amountof money).

11. Every entity A, C, T, a, M, or p can have modiers. Modiers areshown in the entitys four quadrants.

12. The attributes + and (possible valences),M, or p are shown in theupper right quadrant.The subscript refers to adescription or identi-cation of the entity.

13. Subscripts can be arbitrary numbers indexed to a legend, or,the entities can be described by words shown in the subscriptposition, as in the diagram. The analystmay also assign differentprobabilities to the possible per-formance of an act and to theoccurrence of its consequence.

Example: Shooting at a target versus hitting it.

p1probability that a would shoot (A shoots),p2probability of C (that the shot would hit the target).

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14. aC means party a would perceive consequence C. Perceivecan mean see,hear, notice,respond to, orunderstand.

15. baAThe b in the lower left quadrant of the a means that bwould perceive that a is the agent of A.

16. abA bC Here the a has a tilde sign over it, meaning not a.This means that a would not perceive C but b would. Example:If a blind person with a seeing-eye dog steps into the street, hewould not perceive the coming car (the C), but the dog b wouldperceive it.

17. baAmeans thatbwouldperceive thata isAs agent. bx aAmeansthat b would misperceive the fact that a is As agent, as in falseaccusations or misperceiving the agent of a gift.

18. a may perceive C correctly and misperceive its valence, as whenAdam and Eve might perceive the apple Ccorrectly, but misperceive its negative valence(a) for them, and as one might perceivea painting or stamp accurately, but misperceive its value, thevalue being the valence.

19. The C2 in the diagram is what the analyst believeswould actually occur. The subscript can refer to anexplanation of what a would (mistakenly) perceiveinstead.

20. A aC means a would predict C. Prediction is alwaysbased on a historyof prior contactwith similarcontingencies,or of a verbalcommunication.In aA bCa, bwould predict that a would hurt himself.

21. In aA axCa, a would mispredict that he would hurt himself.In the diagram at the right, b would perceive that awould mispredict Ca, as when b would perceivethat a would unwittingly walk into a trap.

22. A vertical arrow (initiated by an A or a T) cutting a horizontalarrow terminates the contingency represented by thathorizontal arrow.

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