Deterrence of Orchestrated Cheating: Group versus Individual Punishment

Abstract

In the wake of a state-sponsored doping scandal, the World Anti-Doping Agency reommended 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 su¢ ciently strong enforcement and a bounded detection-avoidance technology. Otherwise, group punishment fosters 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.