You scratch his back, he scratches mine and I’ll scratch yours: Deception in simultaneous cyclic networks

Markets with increasing specializations demand service exchanges among professionals, forming networks of delegations (e.g., A represents B, B represents C, and C represents A). In three studies, we explore “unethical favors” arising from such simultaneous cyclic networks where everyone decides simultaneously whether to misrepresent key information for their principals. Study 1 and 2 found that participants in such networks were more likely to lie than they would if they worked for themselves. This increased deception may be driven by the anticipation that their lies will be indirectly reciprocated. Indeed, Study 3 found that deception decreased when the chain of delegations was broken (i.e., A represents B and B represents C). Moreover, self-report measures suggested that increased deception in simultaneous cyclic network was indeed due to anticipated indirect reciprocity. Thus, although reciprocity fosters trust and cooperation it can also create an interlocked circle of deception.