A comparison of individual and group behavior in a competition with cheating opportunities

While it is well established that individuals and groups make different economic decisions, the reasons for the behavioral differences are still not fully understood. We experimentally compare individual and group behavior in a competitive setting where cheating can be used to outperform the competitor. Our design allows us to exogenously control for the type of the decision maker, the type of the competitor, and whether the competitor is able to cheat or not. The results show that there is much more cheating in inter-group competition than inter-individual competition which is in line with findings from other interactive games. We show furthermore that this difference is mainly caused by expectations about the competitor. Groups have different expectations than individuals when they compete with a group and they react strongly to the other group's ability to cheat.