Cheating to win: Dishonesty and the intensity of competition

- We argue that the intensity of competition is an important determinant of cheating.
- A simple model of workplace reporting is analyzed.
- Cheating is predicted to be most prevalent for intermediate levels of competition.
- An experiment finds that cheating is highest for intermediate levels of competition.
- We show that increased competition need not lead to an increase in cheating.

We argue that the intensity of competition within a group or organization can have an important influence on whether or not people cheat. To make this point we first work through a simple model of strategic misreporting in the workplace. For low and high levels of competition we show that, in equilibrium, few are predicted to misreport. It is for medium levels of competition that misreporting is predicted to be highest. We test this prediction experimentally and find good support for it. This finding has implications for the design of incentive structures within groups and organizations.