Behavioral economist Dan Ariely is a funny guy on a mission. As director of the Center for Advanced Hindsight, he insists on a commitment to absurdity, but there is nothing cynical about his approach to human behavior.

In his previous book, “Predictably Irrational,” Ariely exposed our false assumptions about the rationality of markets and individuals with plenty of surprising and humorous examples. Our irrationality may be very predictable, but our ability to forecast this behavior doesn’t alter the conditions that give rise to it.

Recognizing this, he adopts his paradoxical mission: to design better economic and social institutions to protect us from our confident pursuit of rational economic and social institutions.

In “The (Honest) Truth about Dishonesty,” Ariely applies his experimental approach to how we “lie to everyone – especially ourselves.” The book discusses the powerful ways irrationality affects our lives and begins with a critique of those who think dishonesty is really the result of a rational cost-benefit calculation.

In a series of experiments, Ariely neatly shows that neither the size of the reward nor the probability of getting caught substantially affects the likelihood of dishonest behavior. The cost-benefit framework for understanding cheating just doesn’t pay off.

Ariely sees two conflicting motivations at work in dishonest behavior. On the one hand, we want to view ourselves as honorable, and on the other hand, we want to get as much stuff as possible. We want the benefits of cheating, yet we want to see “ourselves as honest, wonderful people.”

So we fudge. We fool ourselves and others. Our “cognitive flexibility” cuts us so much slack that we often don’t even perceive ourselves as getting away with anything. This flexibility keeps the contradictions between our principles and our behavior beyond the horizon of our consciousness.

“The (Honest) Truth about Dishonesty” is full of examples of how we deceive ourselves about cheating. Somehow it seems to most people less like cheating to favorably reposition a golf ball with one’s foot than to move it with one’s hand. Tapping the ball with your club is best of all!

As a rule, “cheating becomes much simpler when there are more steps between us and the dishonest act.” Psychological distance is key.

Dishonesty isn’t always so bad. The author describes how doctors and nurses lied to him repeatedly when as a teenager he was recovering from severe burns that almost killed him. If they had told him the brutal truth, he might not have mustered the strength to go on. They didn’t want him anticipating excruciating pain that he was in any case powerless to avoid. The pain was real, but the altruistic dishonesty of his caregivers eased his suffering.

Ariely notes that “we quickly and easily start believing whatever comes out of our own mouths,” which means that once we take credit for something, we are likely to really believe that we deserve it.

When students are induced to cheat on tasks in an experimental situation, they start to really believe their skill level has increased. They certainly realize they are, say, using an answer key to “solve” a problem. Nonetheless, they begin to inflate their perception of their own competence at problem solving.

Despite the good humor with which Ariely discusses his ingenious experiments, this is depressing stuff. But there is hope. Although it is easy to induce dishonest behavior in people, it is also easy to reduce the incidence of such behavior.

Mostly, small reminders of basic moral standards tend to improve behavior. Whether it’s the Ten Commandments, an honor code or a declaration of professional principles, bringing moral standards to mind reduces cheating.

Signing a pledge before filling out a form (at the top of the page) is more effective at reducing dishonesty than signing a pledge after completing a form. Ariely likes having students write out their own honor codes on assignments so that they have to think about ethics rather than just signing something automatically.

Ariely offers some recommendations on conflicts of interest, particularly in medicine. The problem is that many of our professionals systematically find themselves in conflict situations and fool themselves about not falling into unethical behavior. And when these professionals know their clients well, when they are most trusted, this is when the worst conflicts tend to arise.

Whether we are on the client or the professional side, we are likely to tell ourselves that these situations don’t apply to us and the people we trust. We fool ourselves, and so we don’t recognize the dishonesty.

Ariely shows us how some basic factors, such as being tired or hungry, undermine our efforts to be ethical. I was struck here, as I was by Daniel Kahneman’s excellent “Thinking, Fast and Slow,” by the example of judges who tended to defer to parole boards as the judges got hungrier.

The concept of “ego depletion” – that we can run out of the strength to do what we know we should – reminds us that will power is a muscle. It takes energy to do the right thing. We also learn that, once cheating starts, it tends to gain momentum and to become contagious. That’s why we shouldn’t tolerate small indiscretions; it lowers the bar for everyone.

Ariely raises the bar for everyone. In the increasingly crowded field of popular cognitive science and behavioral economics, he writes with an unusual combination of verve and sagacity. He asks us to remember our fallibility and irrationality, so that we might protect ourselves against our tendency to fool ourselves.

I guess only advanced hindsight will one day tell us how successful we have been.