By ANTHONY MUGANDA
PUBLISHED: 21:40, 7 March 2025
Denial and deception—both self-inflicted and externally orchestrated—are fundamental to human behaviour. From grand financial schemes to personal betrayals, these psychological and strategic phenomena shape economic transactions, political movements, and interpersonal dynamics. This article explores the “art of denial,” the “art of the con,” and the “art of being in denial that you have been conned” through the lenses of psychology, behavioural economics, and game theory. We examine how these mechanisms function within film, art, and literature while considering the role of Bayesian inference in decision-making under uncertainty.
The Art of Denial: Psychological Mechanisms and Economic Game Theory
Denial is a defense mechanism that allows individuals to avoid confronting painful realities. While Freud (1924) introduced it as a form of ego defense, modern psychology sees it as a cognitive strategy for maintaining stability in uncertain or threatening situations.
Denial as a Rational Strategy: Game Theory and Utility Optimisation
Denial isn’t always irrational—it can be a strategic choice within game theory, particularly in cases of imperfect information. Individuals may deny inconvenient truths when the cost of accepting them outweighs the benefit of acknowledgment.
Prisoner’s Dilemma and Denial: In game-theoretic terms, people sometimes deny information because admitting it would require a costly shift in behaviour. For instance, an investor who has sunk millions into a failing startup may choose to continue investing rather than acknowledge losses—a form of the sunk cost fallacy (Kahneman & Tversky, 1979).
Bayesian Updating and Selective Information Processing: Ideally, rational actors update their beliefs when presented with new evidence (Bayes’ Rule). However, in denial, individuals weigh evidence asymmetrically—discounting unfavourable data while overweighting confirming information (Nickerson, 1998).
Denial in Art and Film: Aesthetic Representations
Denial has been masterfully explored in film and art:
Cinema: Requiem for a Dream (2000) is an exploration of addiction and denial. Each character spirals into destruction because they refuse to confront the reality of their choices.
Visual Arts: Magritte’s The Treachery of Images (1929), with the phrase “Ceci n’est pas une pipe,” forces the viewer to question their perception—echoing denial’s power to shape one’s reality.
The Art of the Con: Greed, Deception, and Strategic Exploitation
At the core of every con is an asymmetric exchange of information, where the con artist has superior knowledge while the victim believes they do. Most successful cons rely on one key human vulnerability: greed—or, more broadly, hyperbolic discounting (Ainslie, 1975), where short-term rewards appear disproportionately valuable compared to long-term risks.
Game Theory and the Con: The Ultimatum and Trust Games
Con artists thrive in environments where trust is necessary but asymmetric. Two primary game-theoretic models illustrate how deception unfolds:
The Trust Game: The con artist acts as a “trustworthy” party, convincing the victim to invest time, money, or effort. The victim, expecting reciprocal benefits, plays along—only to realise too late that the game was never fair.
Ultimatum Game and Scarcity Effects: The con often creates a fabricated sense of urgency (e.g., “Invest now, or lose the opportunity!”), triggering FOMO (Fear of Missing Out), which exploits a victim’s impulsivity.
Case Studies in Deception
Frank Abagnale Jr. and Catch Me If You Can (2002): Demonstrates how social engineering and confidence play into deception.
The Tinder Swindler (2022): Simon Leviev manipulated emotions and trust, exploiting victims’ willingness to suspend disbelief in pursuit of love and wealth.
Economic Perspectives: Ponzi Schemes and the Rational Irrationality of Victims
Ponzi schemes, such as Bernie Madoff’s $65 billion fraud, operate under rational irrationality—where victims knowingly take risks but assume they can exit before the collapse. This aligns with Prospect Theory (Kahneman & Tversky, 1979), which explains why people overweight potential gains while underestimating losses.
The Art of Being in Denial That You Have Been Conned
Perhaps the most psychologically fascinating aspect of deception is that victims often refuse to acknowledge they have been deceived. This self-deception is a defense mechanism to preserve self-esteem, avoid embarrassment, and reduce cognitive dissonance.
Cognitive Biases That Perpetuate Self-Deception
The Just-World Fallacy (Lerner, 1980) – People believe the world is fair and thus resist accepting that they have been victims.
The Sunk Cost Fallacy (Arkes & Blumer, 1985) – Individuals continue investing in a failed endeavor rather than admit they were wrong.
Endowment Effect (Thaler, 1980) – Victims overvalue what they have committed to and thus resist relinquishing their illusions.
Cinematic and Literary Representations of Post-Con Denial
American Hustle (2013): Characters cling to self-deception even after being manipulated, illustrating the deep-rooted nature of denial.
F. Scott Fitzgerald’s The Great Gatsby (1925): Gatsby himself is in denial about Daisy’s true nature, illustrating how people deceive themselves about love and wealth.
Conclusion: Understanding the Psychological and Economic Interplay
Denial, deception, and self-deception are not just individual psychological quirks but strategic behaviours shaped by economic and social incentives. Game theory, behavioural economics, and Bayesian inference reveal that these behaviours often have an internal logic, even if they lead to irrational outcomes. By studying these phenomena through art, film, and literature, we gain deeper insights into the human condition—and perhaps a greater ability to recognise deception before we become its victims.
References
• Ainslie, G. (1975). Specious reward: A behavioural theory of impulsiveness and impulse control. Psychological Bulletin, 82(4), 463–496.
• Arkes, H. R., & Blumer, C. (1985). The psychology of sunk cost. Organisational Behaviour and Human Decision Processes, 35(1), 124–140.
• Festinger, L. (1957). A Theory of Cognitive Dissonance. Stanford University Press.
• Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291.
• Lerner, M. J. (1980). The Belief in a Just World: A Fundamental Delusion. Springer.
• Nickerson, R. S. (1998). Confirmation bias: A ubiquitous phenomenon in many guises. Review of General Psychology, 2(2), 175–220.
• Thaler, R. H. (1980). Toward a positive theory of consumer choice. Journal of Economic Behaviour & Organisation, 1(1), 39–60.
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