When leading by example leads to less corrupt collaboration

Abstract

We contribute to the pressing question of how organizational design influences corporate wrongdoing by studying different decision structures — simultaneous vs. sequential — in experimental coordination games. Participants can report private information honestly, or lie to increase their own, as well as the group’s, payoff. In simultaneous decision structures, all group members report at the same time, without information about the reports of others, whereas in sequential decision structures there is a first mover who decides first. We find that the presence of a first mover decreases dishonesty levels in repeated interactions (but not in one-shot settings). We argue that this effect is primarily driven by image concerns of decision leaders.