Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272440 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15813
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We study cheating as a collective-risk social dilemma in a group setting in which individuals are asked to report their actual outcomes. Misreporting their outcomes increases the individual's earnings but when the sum of claims in the group reaches a certain threshold, a risk of collective sanction affects all the group members, regardless of their individual behavior. Because of the pursuit of selfish interest and a lack of coordination with other group members, the vast majority of individuals eventually earn less than the reservation payoff from honest reporting in the group. Over time, most groups are trapped in a "Tragedy of Dishonesty", despite the presence of moral costs of lying. The risk of collective sanction is triggered less frequently in small groups than in large ones, while priming a collectivist mindset has little effect on lying.
Subjects: 
dishonesty
public bad
group size
collectivism
individualism
experiment
JEL: 
C92
D01
D91
D62
H41
Document Type: 
Working Paper

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