Deterrence of Orchestrated Cheating: Group versus Individual Punishment

Shmuel Leshem and Abraham L Wickelgren

The Journal of Law, Economics, and Organization, 2023, vol. 39, issue 2, 586-614

Abstract: In the wake of a state-sponsored doping scandal, the World Anti-Doping Agency recommended banning all Russian athletes from the Rio Olympic Games. We study the circumstances in which such group penalties deter a group leader, whose payoff is tied to the group’s benefits and sanctions, from helping cheating group members avoid detection. We show that relative to individual punishment, group punishment deters orchestrated cheating and thereby increases individual deterrence for sufficiently strong enforcement and an intermediate detection-avoidance technology. Otherwise, group punishment fosters more individual cheating. Group punishment is thus a double-edged sword useful primarily as an off-equilibrium threat against orchestrated cheating but detrimental if frequently imposed on the equilibrium path. (JEL C72, K42)

Date: 2023
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