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When someone sees another person break the rules and get away with it, does that inspire them to commit wrongdoing themselves? When people like Allen Stanford or Bernie Madoff are arrested, does that encourage people to play nice? These were the sorts of questions that a group of researchers at the University of North Carolina and Duke set out to answer.

It turns out it's a bit complex. Here's how the experiment went down:

They asked a large group of university students to solve a set of complex math problems in a very short time. They made it hard enough that none could realistically solve all the problems, and they paid them for whatever ones they did solve. The math exercise was just a pretense for the real experiment: shortly after the students began on the math problems, one of them (actually a paid actor) loudly announced to the room: "I've solved everything. What should I do?" Everyone in the room knew this was impossible, so the student-actor was a clear example of blatant cheating. He also took all of the cash, as if he had a perfect score and—very important—left without any consequences.

Naturally, the idea was to see if the other people in the room would follow the cheater's example. And they did, by and large. But then the researchers twisted the scenario a bit.

Sometimes they had the actor wear the T shirt of a rival university, other times not. They wanted to see if the cheater's group identity—classmate or outsider—influenced the level of copycat cheating. That is, would students cheat more (or less) when they saw a rival cheat, as compared to seeing a compatriot cheat?

Interestingly, when it was fellow clasmates doing the cheating, people were more inclined to cheat themselves. When it was an "outsider," the figure dropped substantially. The moral of the story? "Dishonesty can be contagious—if we witness one of our own committing the public act of dishonesty." If the person is someone we perceive as unlike us and totally reprehensible, we're much less inclined to follow their lead. Guess it's a good thing men like Bernie Madoff and Allen Stanford are such unsavory characters. Can you imagine if, like, they'd been really hot and charming? We'd all be in the Cayman Islands or Anguilla right now opening bank accounts.

Is Fraud Contagious? [Newsweek]