“I caught a pupil of mine cheating on his history coursework, he’d copied it wholesale. So I told him he couldn’t take his A level. First my boss comes in and asks me to reconsider. I say no. So then my boss comes back with the boy and asks me to reconsider. I say no. Then my boss’s boss comes in with the parents, and ask me to reconsider. You see, the school’s results will look bad if we don’t let him take the exam I say no. Finally, my boss’s boss’s boss comes in. I still say no. I like the kid as a person, but he shouldn’t have cheated."
What lessons can we draw from this? First, obviously, misused incentives are as toxic in the education system as elsewhere. Second, it is an example of how difficult (but crucial!) honesty can be. It involves the drawing of clear lines in a story full of shades of grey. I’m sure the kid was nice, I’m sure his parents thought up excellent reasons why his future shouldn’t be harmed by this one mistake, and that the head teacher made the same eloquent arguments, I bet nobody was crass enough to say “we can’t make our exam results look bad”. I equally bet that nobody pointed out the consequence - which is, after all, highly diffuse, distant and uncertain - that if we turn a blind eye to large-scale cheating, our education system will cease to do its job.
More abstractly, I think this anecdote shows that the theory of repeated games is very misleading as a guide to the social science of ethical behaviour.
Let’s recap: numerous “folk theorems" show that if a situation is repeated often enough among the same group of actors, they can achieve almost any outcome, including efficient outcomes (roughly, those which are best for everyone), by punishing bad behaviour in future rounds of play. This has often been taken as a parable for real world. If only people can interact often enough in stable communities, then they will force each other to do the right thing. So, for instance, Coleman (1988): “Social capital in the creation of human capital”. Or Elinor Ostrom passim. Or Ellickson, Order without law, about midWestern ranchers.
Unfortunately, no. Look at the story. Everyone around my teacher friend is persuading him to do the wrong thing. People in the relevant community have interests that are misaligned with that of the wider society. The pressure they bring to bear is making outcomes worse, not better, and only my friend’s strong personality bears up against them. This will be typical in any social system larger than Hillary Clinton’s proverbial village. To function well, large societies need internalized moral rules, not just social pressure.