Let’s talk cheating today. No leader wants to discover that someone on their team has been deceitful, be it fudging time cards or sales stats. So how can leaders set conditions that dissuade cheating at work?

In looking at this question, Maryam Kouchaki, an associate professor of management and organizations, along with colleagues, reveals an interesting self-fulfilling prophecy: the more we think the people around us are likely to cheat, the more we feel that cheating is acceptable, which makes us more likely to cheat.

We’ll discuss this research in more depth below, then look at some trends in our post-pandemic global economy.

How Crowd Size Affects Cheating

Kouchaki’s research focused on how our tendency to cheat changes when we’re in small versus big groups.

In one experiment, participants were randomly placed into groups of either 5 or 25 and then asked to individually solve word jumbles. They self-reported how many jumbles they unscrambled, earning a small amount of money for each one. But unbeknownst to them, one jumble was unsolvable, meaning the researchers could tell if someone was cheating if they reported solving it.

In the small groups, 27 percent of participants reported solving the unsolvable jumble. In the large group, that figure rose to 54 percent. Another, similar experiment showed the same phenomenon.

The researchers later explored what, exactly, was causing this behavior. This time, in addition to giving them the word-jumble instructions, they also asked participants to answer questions about cheating behavior.

The researchers found that as group size increased, the expected number of cheaters increased too. And this larger number of expected cheaters caused people to view cheating as more normative.

“When you think your behavior is normative,” Kouchaki explains, “then it seems more defensible. Questionable behavior seems more justifiable when you think more people are doing it.”

One takeaway for leaders, then, is to see if you can keep team size small if people are likely to be tempted to cheat. But even more important, Kouchaki says, is to realize how easy it is for people to change their views on cheating based on what they think the norms of the group are. Being explicit about your expectations for honest, accurate, and transparent performance will lower employee expectations that others will cheat and in turn make them less likely to cheat themselves.

Trends in the Global Economy

It is a difficult time to be reading the macroeconomic tea leaves, as many key indicators are moving in opposite directions. But finance professor Sergio Rebelo says we can still mine them for some clues about what the future holds.

He recently discussed five big trends he’s watching. Here are a couple:

Blame long-term trends for labor shortages: Yes, the pandemic wreaked havoc on the labor pool. But current low levels of unemployment aren’t due to COVID, and are likely not an aberration, Rebelo says. Net immigration into the U.S. is down significantly, which means there are fewer workers available to fill open positions. Plus, the U.S. and many other countries have had a couple decades of reduced birth rates. “It takes about 26 years to produce a 25-year-old worker,” Rebelo jokes. “You can’t go back and undo those kinds of decisions.”

Central banks can only do so much to curb inflation: Energy and food commodity costs—the aspects of inflation that people most complain about—are too volatile to manage with the tools of monetary policy. When the Fed raises interest rates and makes borrowing costlier, it can dampen an overheated economy by reducing demand for goods such as appliances, cars, and houses. Unfortunately, the Fed’s leverage does not extend to fixing problems with the supply of goods. “In places like the U.S., the EU, and many countries in Asia, we have inflation caused by a combination of demand and supply shocks,” Rebelo says. “The recent burst of inflation was more of a supply than a demand phenomenon.”

LEADERSHIP TIP

“The tax code draws bright lines between things that lie on a continuum. No matter where one draws the line, something is just above it and something else is just below it—and because the differences are small, the distinctions will look unfair to some people.”

—Professor Mitchell Petersen in the Wall Street Journal, on why the debate over taxing carried interest is not clear cut.