An Economic Analysis of Academic

Journal of Legal Studies Education
Volume 25, Issue 2, 183214, Summer/Fall 2008
An Economic Analysis of Academic

Dishonesty and Its Deterrence in
Higher Education
Stephen K. Happeln and Marianne M. Jenningsnn
INTRODUCTION
The underlying contract in higher education is that students, in exchange
for demonstration of individual skills and predetermined levels of under-
standing, are evaluated objectively by faculty and rewarded by the reflec-
tion of a grade-level performance on their permanent records. In addition
to providing a system that can reflect mastery or training in particular
subject matters, grading and student evaluation mechanisms, with their
rewards and punishments, prepare students for the workplace and its
market forces: good performance is rewarded and poor performance and
dishonesty are punished. Truthful and candid evaluations in the academy
are a form of training that can help students to make correct choices as
they progress through the stages of moral development.1 Evolutionary
development toward, hopefully, correct choices related to academic integ-
rity also helps students develop or reaffirm their sense of justice as they
develop morally to assume responsibility for their own actions and accept
consequences for their poor performance and poor choices.2
Professor of Economics, W.P. Carey School of Business, Arizona State University.

n
nn
Professor of Legal and Ethical Studies, W.P. Carey School of Business, Arizona State Uni-
versity.
1
The moral development discussion is found infra note 31 and accompanying text and draws
on Kohlbergs work.
2
Again, more on Kohlbergs stages is found infra note 31 and accompanying text. Stage 4 is
the level at which individuals may break rules, but they are also willing to accept the conse-
quences for breaking such rules, including whatever punishments are associated with that
breach. LAWRENCE KOHLBERG, VOL. 1: THE PHILOSOPHY OF MORAL DEVELOPMENT (1981).
r 2008, Copyright the Authors
Journal compilation r Academy of Legal Studies in Business 2008
183
184 Vol. 25 / The Journal of Legal Studies Education
Once the education contract is performed on both sidesFwith the

institution providing training and assigning evaluations in exchange for
course assignments, work, and requirementsFstudents enter labor mar-
kets burnishing their college degrees as a signal to potential employers.
The degree represents the institutions imprimatur with regard to the stu-
dents training and achievement. Despite the evolved nature of credits,
grades, and grade point averages (GPAs) and their role in the recruiting
and hiring processes, employers are operating with asymmetrical infor-
mation in their evaluation of graduate applicants.3 Their assumption,
based on the institutional imprimaturs of degrees and grades, is that the
grades on the student-applicants transcripts reflect distinguishing factors
among and between these job candidates. That assumption, however, is
flawed if academic dishonesty is prevalent at colleges and universities.4 If
3
This asymmetry is the basis for Michael Spences 2001 Nobel Prize research on actions taken
by high-quality students to signal employers. MICHAEL SPENCE, MARKET SIGNALING: INFORMA-
TIONAL TRANSFER IN HIRING AND RELATED PROCESSES (1974). Spence drew on the work of George
Akerlof that addressed the issue of why consumers buy lemons when they are in the market to
purchase cars. The answer is the inability to gain full information, whether through lack of
access or because the information provided on both lemons and nonlemons is the same.
George Akerlof, The Market for Lemons: Qualitative Uncertainty and the Market Mechanism, 84 Q. J.
ECON. 488 (1970).
Spence, in drawing on Akerloff s work on lemons and asymmetrical information, explored
the question of why high-quality students undertake additional course work, that is, nonre-
quired course work. The additional information that the students gain make them more
marketable in the traditional interactions they will have with employers as they interview for
jobs following their degree completion. Their knowledge base is broader and has greater
depth and offers them a form of distinction in the marketplace when there is little GPA dis-
tinction among the job candidates. The same logic applies to signals on academic dishonesty if
employers value additional information/knowledge significantly. Additional grounds for
asymmetry include financial considerations (having to work during school), personal circum-
stances such as study conditions, family support, learning disabilities, and individual and
family health issues.
4
Indeed, events over the past year indicate that just the assumption of the existence of a
degree claimed on a resume may be flawed. Marilee Jones, the dean of admissions of Mas-
sachusetts Institute of Technology (MIT), resigned after twenty-eight years as an administra-
tor in the admissions office. Her resume, used when she was hired by MIT, indicated that she
had degrees from Albany Medical College, Union College, and Rensselaer Polytechnic Insti-
tute. In fact, she had no degrees from any of these schools or from anywhere else. She had
attended Rensselaer Polytechnic as a part-time nonmatriculated student during the 197475
school year, but the other institutions had no record of any attendance at their schools. Tamar
Lewin, M.I.T.s Admissions Director Resigns; Ends 28-year Lie About Degrees, N.Y. TIMES, Apr. 27,
2007, at A1 & A20. The resume exaggeration issue claimed several other professionals this
year including Joseph Ellis, a Mount Holyoke College, Pulitzer Prizewinning historian who
said he fought in Vietnam when he did not; Jeffrey Papow, president of IBM Lotus, who had
2008 / An Economic Analysis of Academic Dishonesty 185
academic dishonesty is prevalent, the grades awarded are skewed because

the measurement is not an isolated one of achievement, mastery, and
performance. Rather, in atmospheres in which cheating is prevalent or
simply occurring, part of the achievement judged by the grades is the
ability to engage in academic dishonesty without being caught, a skill that is
not the basis of most hiring decisions. The skew in the evaluation metrics
becomes apparent once employment begins. As the newly hired employees
perform at levels consistent with their real abilities, and not with their
actual grades, the reputations of other graduates may be affected because
the poor performance of these dishonest students damages all who
are affiliated with the institution.5 There is also the accompanying
discrepancies in both his educational and military records; and Denis Waitley, who resigned
from the United Health Sciences board after the discovery that he did not have a claimed
degree. Keith J. Winstein & Daniel Golden, MIT Admissions Dean Lied on Resume in 1979, Quits,
WALL ST. J., Apr. 27, 2007, at B1 & B2; JoAnn S. Lublin, No Easy Solution for Lies on a Resume,
WALL ST. J., Apr. 27, 2007, at B2.
5
This negative effect on and assumptions about students who attend schools in which aca-
demic integrity standards are not upheld is evidenced anecdotally by the experience of the
students of Ms. Christine Pelton, a high school science teacher at Piper High School in Kansas,
who had warned the students in her sophomore class not to use papers posted on the Internet
for their projects. When Ms. Pelton was describing the writing portion of the project and its
requirements to her students, she had her students sign contracts that indicated they would
receive a 0 grade if they turned in others work as their own. The paper counted for 50
percent of their grade in the course.
When the projects were turned in, Ms. Pelton noticed that some of the students writing in
portions of the paper was well above their usual quality and ability. Using an online service
called Turnitin (http://www.turnitin.com/), she found that twenty-eight of her 118 students
had taken substantial portions of their papers from the Internet. She gave the students a 0
grade on their term paper projects. The result was that many of the students were now going
to fail the semester in the course.
Superintendent Michael Rooney of the school district initially backed Ms. Peltons
decisions. However, the parents appealed to the board and the board ordered Ms. Pelton
to raise the grades. Mr. Rooney, acting at the boards direction, told Ms. Pelton that the de-
cision of the Board was that the weight for the paper should be changed from 50 percent to 30
percent of the courses total semester grade and that the twenty-eight students should have
only 600 points deducted from their grade rather than the full 1,800 points the project was
originally worth. Ms. Pelton resigned in protest. However, Kansas universities began dis-
counting the GPAs of students from Piper and a reference in an application to Piper High
School resulted in careful scrutiny by university admissions officers of the students applica-
tions for admission because of the sordid tale from Piper and the lack of sanctions. Education
Week reported the following as results of the actions of the students and the school board: All
12 deans of Kansas State University signed a letter to the Piper school board that included the
statement: We will expect Piper students . . . to buy into [the universitys honor code] as a part
of our culture.
credibility problem that the graduating and evaluating institutions

suffer as graduates with high GPAs and degrees cannot provide the
level of skill the hiring employers expect as being commensurate with
academic achievement reflected in grades and transcripts. The question
then becomes one that is the focus of this article: how do individual stu-
dents and institutions as a whole deal with the negative signal of academic
dishonesty?
Following a review of the state of academic integrity at colleges and
universities, this article then explores the reasons for rising dishonesty on
campuses. Using microeconomic analysis of academic dishonesty, includ-
ing discussion of the externalities that drive college students to cheat, the
article provides new insights into deterrence and prevention. Employing
the microeconomic model and the experience garnered from reform at
one institution can provide suggestions and insights for curbing academic
dishonesty in colleges and universities.
Angered, Piper school board member James SwansonFwho is one of the targets of a recall
driveFwrote the university to note that the implication that Piper students might be subject
to greater scrutiny because of one controversial incident involving only twenty-eight students
was unfair. He received an apology from university officials.
More troubling to the community, Piper students have also been mocked. At an inter-
scholastic sporting event involving Piper, signs appeared among the spectators that read
Plagiarists. Diane Carroll, Board Hears of Plagiarism Backlash, KANSAS CITY STAR, Mar. 13,
2002, at A13; Diane Carroll, K-State Deans Fault Piper Board, KANSAS CITY STAR, Mar. 7, 2002, at
B1.
Students have reported that their academic awards, such as scholarships, have been de-
rided by others. And one girl, wearing a Piper High sweatshirt while taking a college-entrance
exam, was told pointedly by the proctor, There will be no cheating. Andrew Trotter, Pla-
giarism Controversy Engulfs School, Apr. 3, 2002, http://www.edweek.org/ew/newstory.cfm?slug=
29piper.h21.
The schools reputation suffered so greatly that Piper experienced a decline in property
values. A bedroom community of Kansas City, parents were hesitant to purchase homes there
knowing the effect a Piper High School diploma could have on their childrens college ad-
missions. Jodi Wilgoren, School Cheating Scandal Tests a Towns Values, N.Y. TIMES, Feb. 14, 2002,
at A1 & A28. Excerpted and adapted from MARIANNE M. JENNINGS, BUSINESS ETHICS: CASE
STUDIES AND READINGS 32 (6th ed. 2008).
In a higher education example, one student in the graduate journalism program at Co-
lumbia University commented, Its going to affect us for years to come. Columbias going to
have this badge of dishonor. Another student said that he paid $43,422 per year in tuition
and fees and did not want his degree devalued. Still another noted, Theres kind of a pal-
pable fear. Whats going to happen when you go for a job interview? Robin Shulman, Jour-
nalism School Probes Possible Cheating on Ethics Exam, WASH. POST, Dec. 3, 2006, at A11.
STATE OF THE UNION ON ACADEMIC DISHONESTY

Academic dishonestyFcheatingFincludes plagiarizing, receiving credit
for work not ones own, copying assignments, copying from anothers ex-
am, taking anothers exam, not doing individual work on individual as-
signments, failing to contribute to team projects, and other forms of
deception about work and performance.6 Cheating is rampant on college
campuses.
A survey by Pennsylvania State University, Rutgers University, and
Washington State University reveals that fifty-six percent of Masters of
Business Administration (MBA) students admit that they took notes into
exams surreptitiously, stole work from others, and engaged in other forms
of cheating.7 Masters students in the social science programs weighed in
with a thirty-nine percent admission factor.8 The same study, Academic
Dishonesty in Graduate Business Programs: Prevalence, Causes, & Pro-
posed Action, which was published in the Academy of Management Learning
& Education, surveyed 5,331 students at thirty-two graduate schools in the
United States and Canada between 2002 and 2004. The study concluded
that forty-seven percent of nonbusiness students admitted to some form of
serious academic dishonesty during the previous school year.9
Most general studies on college cheating conclude that the rate of
cheating is at about seventy-five percent of all students.10 That level has
6
There are over 300 Web sites that offer students papers for their use (generally for a fee).
Some sample names offer insight into the element of intent in academic integrity breaches:
http://www.schoolsucks.com, http://www.academon.com, http://www.cheathouse.com, and
http://www.lazystudents.com. For more information on the breadth of internet resources,
see Karen D. Clos, When Academic Dishonesty Happens on Your Campus, NISOD INNOVATION
ABSTRACTS, Nov. 8, 2002, available at www.cai.org.
7
Available at The Center for Academic Integrity, located at Clemson University, http://www.
academicintegrity.org/cai_research/index.php.
8
Al Lewis, Wily MBA Students Lead Cheating Pack, DENVER POST, Oct. 7, 2006, at C1.
9
Francesca Di Meglio, A Crooked Path Through Business School?, Sept. 24, 2006, http://www.
businessweek.com.
10
See http://www.academicintegrity.org/; http://www.northwestern.edu/uacc/cai/research/high
lights.html. Surveys on the extent of academic dishonesty vary because of definitions used in
the surveys for what constitutes cheating, as well as the self-reporting nature of most of the
surveys. However, the Center for Academic Integrity (CAI), http://www.cai.org, originally
founded by Don McCabe at Rutgers, in residence at Duke University until May 2007, and now
at Clemson University, concludes that most studies put the figures at about 75 percent. The
been reached following an increasing trend from eleven percent in 1963 to

forty-nine percent in 1992 to the present levels.11 Not only is the basis of
the student/university contract being weakened with extensive academic
dishonesty, the evaluation system itself begins to carry an inherent flaw in
credibility. Pervasive academic dishonesty undermines the evaluation
mechanisms. Poor performance goes undetected and, indeed, may even
be rewarded.
Web site provides links to various studies, including CAIs own survey work. Beyond the
survey data is the inherent gut feel of faculty members who are forced to go through the
prevention techniques of randomization, identification (ID) checks, and monitoring. Even
with such classroom prevention and deterrent techniques, students resort to other means, and
the classroom test is not the only grade component. For example, the University of Nevada
Las Vegas (UNLV) dental school concluded that ten of the students in the schools first grad-
uating class had tapped into the UNLV computer system and their professors grade rosters
and awarded themselves grades for required lab work for their senior-year courses. K.C.
Howard, UNLV Students Accused of Forgery to Receive Degrees, LAS VEGAS R.J., June 13, 2006,
http://www.reviewjournal.com/lvrj_home/2006/Jun-13-Tue-2006/news/7880595.html. Other
forms of academic dishonesty include the recent Duke Fuqua School of Business MBA pro-
gram cheating scandal in which thirty-four students turned in strikingly similar answers to a
take-home case assignment. Over half of the students were expelled for the behavior. The
classroom monitoring may well be action that addresses just the tip of the iceberg in terms of
the ability to curb cheating. Alison Damast, Duke MBAs Fail Ethics Test, BUS. WK., Apr. 30, 2007,
http://www.businessweek.com/bschools/content/apr2007/bs20070430_110466.
htm?chan=top+news_top+news+index_businessweek+exclusives (last visited July 2, 2007).
At Harvard, 119 MBA applicants were precluded from admission to that MBA program for
hacking into the universitys admissions files. Geoff Gloeckler & Jennifer Merritt, Harvard
MBA Applicants Hacking Into System, BUS. WK., Mar. 9, 2005, http://www.businessweek.com/
bschools/content/mar2005/bs2005039_7827_bs001.htm (last visited July 2, 2007).
11
Details on the cheating are as follows:
McCabes study compared Bowers seminal work in 1963 to data collected in 1993 with the
following results:
! Copying from another students test increased from 26 percent to 52 percent.
! Helping another student cheat increased from 23 percent to 37 percent.
! Using crib notes increased from 16 percent to 27 percent.
! Unauthorized collaboration on assignments increased from 11 percent to 49 percent.

! Plagiarism remained relatively stable from 1963 to 1993, with 54 percent of McCabes
student respondents reporting having copied information without a reference and 29
percent reporting having falsified a bibliography.
Donald L. McCabe & Linda K. Trevino, What We Know About Cheating in College: Longitudinal
Trends and Recent Developments, CHANGE, Jan./Feb. 1996, at 31, quoted in Jennifer N. Bu-
chanan & Joseph C. Beckham, A Comprehensive Academic Honor Policy for Students: Ensuring Due
Process, Promoting Academic Integrity, & Involving Faculty, 33 J.C. & U.L. 97, at 9798 (2006).
Individual students who understand the market forces of job rewards

for grade performance may readily engage in academic dishonesty to
graduate with marketable diplomas and possibly obtain the best employ-
ment interviews and job offers. Professor McCabe has observed, Cheating
theory1 in business starts with cheating on tests.12 A fallacy of composition arises
in which, as individual students pursue their individual careers and self-
interests, they can be hurt by the institutions presumed and assumed
reputation, however fallacious it may be, in the marketplace.13 This nar-
rowly focused self-interest approach has far-reaching impact, affecting the
marketability of the students who perform at top levels without resorting to
academic dishonesty.14
Rather than focusing on the issues of moral development and the
inherent rightness or wrongness of cheating, the problem may be best
addressed through application of economic analysis by both students and
administrators when cheating incidents arise. Upon uncovering extensive
cheating among our own graduate students, we initially chose the path of
righteous indignation, in the form of moral outrage, as the means we be-
lieved would be effective in curbing cheating. Feeling a sense of betrayal by
students we had trusted, we wrote an editorial that appeared in the Ar-
izona State University campus newspaper, the ASU State Press, and which
was then reprinted in the states largest newspaper, the Arizona Republic.15
In response to the editorial, and rather than acknowledging the issue
and addressing cheating, the ASU administration, including the president
and provost, sent pointed e-mails questioning whether any major prob-
lems with academic dishonesty existed on campus. Their survey of deans
found a group echoing the classic sentiments of denial, There is not a
serious cheating problem at ASU. Perhaps they were correct in an eco-
nomic senseFan optimal amount of cheating was being produced and
consumed. Administrators pointed to the significant administrative costs to
12
Al Lewis, Why MBA Students Are Such Cheaters, DENVER POST, Oct. 7, 2006, at B1.
13
The fallacy of composition was at work in the effects felt by the Piper High School students
as they applied for admission to colleges and universities or took their college entrance exams.
See supra note 5 and accompanying text.
14
See supra notes 56 and accompanying text.
15
Stephen Happel & Marianne Jennings, A New Approach to Stop Cheating and plaglarism, ASU
STATE PRESS, Apr. 18, 2003, at 5; Trouble at Institutions of Higher Cheating, er, Learning, ARIZ.
REPUBLIC, Apr. 20, 2003, at V5.
the institution of reducing cheating, including labor (professors, staff, and

teaching assistants to generate multiple versions of exams and to serve as
proctors) and capital investment (different classroom configurations).
The reaction of students to our public discussion of academic integrity
issues was mixed. Some MBA students were outraged at the editorial, and
they too denied that there was a significant problem with cheating. They
naturally demanded a retraction up and down the administrative chain of
command. Yet many other students and colleagues responded positively, of-
ten with expressions of relief that the elephant in the room had finally been
recognized for its presence and could now be discussed. Letters to the editor
and follow-up articles in both newspapers called for action. In response, the
ASU Faculty Senate began steps in the fall of 2003 to address pervasive
cheating. As the process evolved, the emotional nature of the initial reaction
to disclosure and acknowledgement succumbed to reason as economic mod-
eling was applied to academic dishonesty to develop signals and incentives
that would be effective in deterrence, if not elimination of cheating.
Using our ASU experience vis-a-vis academic honesty, and in com-
bination with economic theory, we present a means for curbing or at least
motivating attitudinal changes toward cheating in both the current culture
and higher education. Following the culture discussion is our microeco-
nomic analysis on cheating. The next segment provides data on current
student views, as reflected in the responses by over a thousand ASU under-
graduates, with regard to academic dishonesty. Following is a discussion of
the six resolutions proposed by the Student-Faculty Policy Committee and
passed by the ASU Faculty Senate in spring 2005. The article then concludes
with a discussion of the nature of cheating today as compared to the past and
offers insights into what the future may hold in terms of both academic dis-
honesty and institutional responses. The objective of this discussion is to
provide grounding and ideas for effective academic integrity policies.
MICROECONOMIC ARGUMENTS ON ACADEMIC

HONESTY/DISHONESTY
F.A. Hayeks noted work on knowledge in society provides a beginning
point for an analysis of academic dishonesty.16 Hayek points to knowledge
16
Friedrich A. Hayek, The Use of Knowledge in Society, 35 AM. ECON. REV. 519 (1945).
as a commodity that must flow as freely as possible if the marketplace is to

maximize societys welfare. Promoting a free flow of accurate information
as a commodity requires some provider that is open to the pursuit of truth.
Universities, with the shield and protection of tenure, perform the func-
tion of furnishing accurate information as their immunity permits the
pursuit of truth. Colleges and universities push the frontiers of both sci-
entific and day-to-day knowledge, challenging conventional wisdom and
exploring unknown areas seeking insight and resolution. The emphasis on
both discovery and wide dissemination of knowledge is dependent upon
and allowed by academic freedom.17 To the extent information provided
by colleges and universities is tainted because of integrity breaches, the
quality and reliability of the commodity is neither screened effectively nor
properly verified. The presence of academic dishonesty affects the content
of the information and impedes the ability to evaluate the sources who
have served as developers of the information. Under Hayeks view of ac-
curate information as a commodity, the pursuit of truth requires that any
breach of integrity related to that knowledge necessarily demands a con-
demnation. Academic dishonesty affects the quality and trustworthiness of
the information commodity, the knowledge about the performance and
abilities of the students graduating from colleges and universities.
Other economic principles also have application to the college and
university role in the marketplace. From a microeconomic perspective, if
property rights are defined and all externalities are internalized, then the
Coase Theorem implies that an optimal amount of cheating, which is not
zero, arises to achieve market efficiency. Simply stated, the Coase Theorem
holds that the initial allocation of legal entitlements does not matter from
an efficiency perspective so long as they can be freely exchanged. In other
words, misallocation of legal entitlements by law will be cured in the
market by free exchange.18 Under the Coase Theorem, self-interest will
17
Academic freedom and tenure can be traced to the efforts of Arthur Lovejoy and John
Dewey and their formation of the American Association of University Professors (AAUP) in
1912. Tenure was the protection for faculty against arbitrary dismissals based on personal
animosity rather than scientific record. Happel defended tenure for university faculty, draw-
ing upon Hayeks arguments for the benefits from the constant flow of useful knowledge.
Stephen Happel, In Defense of Tenure, WALL ST. J., Oct. 28, 1996, at A14.
18
This is the Coase Theorem as restated by Robert D. Cooter, The Coase Theorem, in WORLD OF
ECONOMICS 51 (1970). The Coase Theorem was developed by Ronald Coase when he served as
a faculty member, contemporaneously with Milton Friedman, at the University of Chicago
economics department.
cause parties with initially perceived differing goals to find the common
meeting ground for resolution of their conflicting goals.19 As discussed
more fully below, cheating will never be completely eliminated. Microeco-
nomic theory emphasizes the trade-offs and incentives involved.
From the universitys perspective, because academic dishonesty car-
ries adverse reputation effects,20 after some threshold level, resources with
high opportunity costs must be devoted to the problem. These resources
include preparing different forms of exams to deter cheating, having many
proctors monitor exams, using faculty and administrative time to prose-
cute academic dishonesty cases keeping in mind the necessary due process
requirements, printing mountains of brochures and handbooks needed to
confront the issue, and even developing new seating arrangements.
Academic dishonesty is also a cost imposed on those noncheating
students who would perform at the top of the evaluation scales in colleges
and universities. Academic dishonesty becomes an externality over which
these high achievers have virtually no control.21 Along with possible de-
19
The Coase Theorem is best understood through Coases well-known example of the wood-
and-coal-burning locomotives that emit sparks as they travel along the tracks. The sparks,
from time to time, set fire to the farmers fields that line the tracks. The railroad can reduce
the farmers damages by installing spark arresters, using different fuel to power the engines,
or by running fewer trains. The farmers, on the other hand, can plant crops farther back from
the tracks and not store items, or build facilities near the tracks. This example is the foun-
dation of Coases original work: Ronald Coase, The Problem of Social Cost, 3 J. L & ECON. 1
(1960).
20
Perhaps former Harvard Business School Dean Kim B. Clark explained the schools per-
spective on academic dishonesty in defending his decision to deny the 119 hackers admission
to the Harvard MBA program as he equated tests of integrity as prerequisites to graduation
and the Harvard imprimatur, Our mission is to educate principled leaders who make a
difference in the world. To achieve that, a person must have many skills and qualities, in-
cluding the highest standards of integrity, sound judgment, and a strong moral compassFan
intuitive sense of what is right and wrong. Those who have hacked into this Web site have
failed to pass that test. Francesca Di Meglio & William C. Symonds, Harvards Case Study in
Surprise, BUS. WK., June 6, 2005, http://www.businessweek.com/bschools/content/jun2005/
bs2005066_8411_bs001.htm (last visited July 2, 2007). See also supra notes 58 and accompa-
nying text.
21
Perhaps this lack of control is best evidenced by the Save the Harvard 119 campaign that
emerged after the 119 hackers were banished from the Harvard program. One student in-
dicated that the students had actually passed a critical test in business with their ability to hack
into the program, Exploiting weaknesses is what good business is all about. Why would they
ding you? Harvard MBA Applicants Hacking Into System, BUS. WK., Mar. 9, 2005, http://
www.businessweek.com/bschools/content/mar2005/bs2005039_7827_bs001.htm (last visited
July 2, 2007).
valued diplomas that ultimately affect their reputations and marketability,

well-meaning students may get lower grades and so may not be hired into
the best jobs or admitted into top graduate programs.22 Prisoner-dilemma
situations may arise in which the very good students engage in academic
dishonesty because of systemic forces and the lack of incentives for honesty
or enforcement (disincentives) for dishonesty.23
22
This realization by students is reflected in their comments when cheating is revealed among
their ranks. See supra notes 58.
23
Modern game theory describes the prisoners dilemma as follows:
Two prisoners are held in separate cells and they are not allowed to communicate with
each other. Each is given the choice of confessing (and implicating the other prisoner) or
refusing to confess. If both prisoners refuse to confess, they both get relatively short
sentences. Otherwise, the prisoner who confesses first gets a very short prison sentence
and the nonconfessing (or second-to-confess) prisoner gets a lengthy prison sentence.
Thus, even though each individual prisoner has an incentive to defect (to be the first to
confess), and do it quickly, both prisoners are better off if they cooperate and refuse to
confess. While the first to defect benefits himself, he benefits himself more by cooper-
ating from the beginning with the other prisoner. Thus, mutual cooperation is the best
strategy for both prisoners.
Pamela H. Bucy, Game Theory and the Civil False Claims Act: Iterated Games and Close-Knit Groups,
35 LOY. U. CHI. L.J. 1021, 102728 (2004). Adding numbers gives us the following:
Two people, A and B, are arrested, put into separate rooms, and given the choice of
either confessing or not confessing. If neither confesses, they both go to jail for one year
(on some minor charge). If both confess, they both go to jail for 10 years. If A confesses
and B does not, A gets off entirely while B goes to jail for 15 years. The reverse happens if
B confesses and A does not.
Michael A. Salinger, The Legacy of Matsushita: The Role of Economics in Antitrust Litigation, 38 LOY.
U. CHI. L.J. 475, 479 (2007).
The prisoners dilemma, as applied to academic dishonesty, carries the wrinkle of not just
who gets punished, but what happens to both, with the reputational damage, if the cheating is
disclosed publicly. Even the nonoffender is punished through disclosure of breaches of ac-
ademic integrity because of institutional impact. If the good students do not join the breaching
group and say nothing, they enjoy reputational benefits. Hence, the good students remaining
sullen and mute maximize their benefits, at least temporarily. The prisoner, in the case of
academic dishonesty, is better off doing nothing about the evolving nefarious conduct.
DOUGLAS G. BAIRD ET AL., GAME THEORY AND THE LAW 33 (1994). The notion of the lack of
information in law is a long-standing discussion across topics in the literature. For example,
the valuation of a case for purposes of settlement and even the decision on using mediation
requires strategic factoring in of the unknown but critical piece of information: how would a
jury perceive the case and how much would the jury award? Indeed, when the parties attempt
to settle a case when that factor does not remain an unknown,that is, has been manipulated,
the courts step in and sanction those who have undisclosed high-low settlement agreements
even as the trial proceeds. See, e.g., Ronald J. Gilson & Robert H. Mnookin, Disputing Through
Agents: Cooperation and Conflict Between Lawyers in Litigation, 94 COLUM. L. REV. 509, 51422
Drawing upon Michael Spences work on high-quality (noncheating)

students may signal employers in one manner by simply choosing univer-
sities known to have a particular campus culture of ethical values.24 Within
an environment of extensive cheating, students may gravitate toward ma-
jors where copying/plagiarizing has historically been minimal or where
they feel there are high academic and integrity standards. Top students
may also join college clubs and professional organizations known for their
codes of conduct and leadership.25
Yet a basic axiom of free-market microeconomics is that, even if some-
thing is bad and costly, if it persists in the marketplace over a long period
of time, it must create good effects as well. Clearly, there are individual
returns from cheating that allow underqualified students to pass courses
and graduate when they otherwise would not.26 In addition, there are di-
vision and specialization effects (in economic theory, those who are better
bakers make the bread while those who are better farmers grow the grain
for the baker to use and neither attempts to teach the other the baking or
farming skills), gains from trade economizing on students time, whereby
if you help me in your best subjects, Ill help you in mine. Learning
certain cooperative skills can be helpful in the generally team-based pro-
(1994); Charles Yablon, Stupid Lawyer Tricks: An Essay on Discovery Abuse, 96 COLUM. L. REV.
1618, 162324 (1996). See also In re Fee, 898 P.2d 975 (Ariz. 1995); Potter v. Eli Lilly and Co.,
926 S.W.2d 449 (Ky. 1996).
24
Spence has a body of work that deals with the problem of passing off. Those who have not
developed the intellectual property or reputation nonetheless use the rights to both for their
own personal gain without compensation to the developers or owners. Michael Spence, Pass-
ing Off and the Misappropriation of Valuable Intangibles, 112 L.Q. REV. 472 (1996). Spence refers
to it, as the title notes, as the misappropriation of valuable intangibles. Students who do cheat
attend credible institutions in order to take advantage of the reputational effects of their de-
gree and performance there for purposes of future employment.
25
Spence points to issues such as unjust enrichment from the use of property (intellectual and
otherwise) developed by others without permission, or, in the case of academic dishonesty,
without adopting the same standards as those who have developed the intangible commodity
of academic integrity. Id. at 48990. The difficulty with the idea of passing off with regard to
academic integrity is similar to the problem Spence noted with Mick Dundee boots. The in-
famous Australian outback hero had boots named for him prior to the commercial success of
the Crocodile Dundee movies and character. To whom do the boots rights now belong? The
film writers? Producers? The boots existed before and subsequent events increased their val-
ue. Who collects and enforces on that value? Id. at 494. See also CROCODILE DUNDEE (Paramount
1986).
26
The passing-off effect takes hold here.
fessional and business world. The problem here, of course, is a blurring of

the lines where academic dishonesty arises because someone may do prac-
tically no work and still enjoy the grade and recognition of acceptable
course performance.27
This blurring applies to more than just team efforts and coopera-
tion. There is general unwillingness to engage in strict definitions of
cheating and few uniform penalties exist when dealing with academic
dishonesty today.28 An extreme view on academic dishonesty requires that
all forms of cheating are equally wrong, so any form should result in the
same punishment (dismissal from the institution). However, academic dis-
honesty does exist in various degrees of severity, from relatively minor
offenses such as a quick glance at anothers test to major fraud where
someone is hired to take an exam or even an entire course for some-
one else.29 The blurring of severity is problematic for both students and
those responsible for enforcement and sanctions. The blurring has result-
ed in discussions among and between those within the system for penalties
to vary, thereby allowing those responsible for enforcement to take into
account time-and-place considerations in assessing sanctions.30
Whether the foregoing benefitsFunderqualified students receiving
diplomas, student time economies, and the perception that much cheating
involves minor infractionsFare sufficient to overwhelm the direct costs of
enforcement, institutional prestige, and personal costs to noncheating stu-
dents seems questionable. More social benefits must be present to provide
an explanation for ongoing problems and even growth in academic dis-
honesty.
Broader social benefits may lie with younger and now even older
generations challenging the limits of what is and is not acceptable behavior.
27
In economics, the term is free rider, and in campus parlance, the term is slacker.
28
In the 2006 survey, the students who reported cheating also reported on whether they had
experienced any sanctions for their cheating activity. Only 1.5 percent reported that they had
experienced any sanctions for their breaches of academic integrity. See supra note 8, referring
to the 2006 survey on cheating in business schools.
29
Academic dishonesty includes using prohibited resources on a take-home assignment or
exam, exceeding the time limits for an online exam, turning in anothers work, plagiarizing a
work to earn credit, cheating on an in-class test, and turning in papers obtained on the In-
ternet.
30
Other factors include faculty perceptions about the level and quality of proof regarding the
students breach of integrity.
Rules about academic dishonesty declare established views of ethical and

professional behavior. So some students challenge authority in a controlled
us-versus-them environment.31 Some students will issue extreme chal-
31
Although not the focus of this article, Kohlbergs scale of moral development clearly exists in
all levels on college and university campuses. Kohlberg identified three levels and six stages of
moral development:
Level 1 Preconventional Morality:
Stage One: Obedience and Punishment Mentality (at this stage, the toddler stage, there is
compliance because of punishment associated with disobedience).
Stage Two: Individualism and Exchange (at this stage, there is a bit of self-interest as the
individual understands it is possible to gain benefits from compliance).
Level 2 Conventional Morality:
Stage Three: Good interpersonal relationships (at this stage, the individual begins to
reach beyond self and becomes compliant for the sake of preserving relationships).
Stage Four: Maintaining social order (at this stage, the individual sees the group benefits
in compliance and the individuals roleFthat compliance preserves order).
Level 3 Postconventional Morality:
Stage Five: Social Contract and Individual Rights (at this stage, the individual complies
with rules and conventions beyond just those that are written and sees himself as part of a
society of implicit (normative) rules that preserve and protect individual rightstheir
rights as well as those of others).
Stage Six: Universal principles (at this, the highest stage of moral development, indi-
viduals are prepared to establish and live by rules that they are willing to live by for the
sake of order, rights, etc., regardless of the consequences to them in their individual
circumstances).
Kohlberg also drew on Piagets work on children and moral development. LAWRENCE
KOHLBERG, MORAL STAGES AND MORALIZATION: THE COGNITIVE DEVELOPMENT APPROACH (1971).
The difficulty with laying the Coase model over the Kohlberg model is the same problem
raised by Kohlbergs critics: individuals fluctuate across the stages, even on varying issues,
and may even omit portions of each level. The result is that varying levels of development
may be present in individuals at any time and given different sets of circumstances. For
example, a student in accounting would not cheat on an exam in accounting because that
knowledge is perceived as necessary for job and career. However, that same student might
cheat on a history exam because of a lower level of moral development that sees only the
self-interest, to wit, I dont need to know the Battle of Bunker Hill date to be able to
conduct an effective audit. In the case of the history exam, the student has not reached the
higher Kohlberg levels of seeing the impact of individual cheating on the system, the social
contract, order and so forth. Whether an academic integrity policy and enforcement is suffi-
cient for those in Stage One depends upon the enforcement mechanism. For others functioning
at Stage Five, the Coase Theorem is a logical extension of the social contract created within the
college and university environment.
lenges, a la the Deltas in Animal House.32 But many will learn innovative
skills in this challenge that make for individual success in a well-functioning
free-market economy.
A final point related to explaining the persistence of academic dis-
honesty relates to the cost side. In addition to the previously mentioned
direct costs of enforcement (multiple test versions, proctors), there are the
costs of confrontation. If sanctions are to be enforced, there are due pro-
cess requirements. For the most part, courts have held that enforcement of
academic integrity policies relates to an educational right and requires, at a
minimum, the administrative agency standards for due process.33 In turn,
due process requires written faculty responses and participation. Once the
due process steps begin, there is the possibility and right of students
choosing to be represented by lawyers who prolong the process and in-
crease the time costs of enforcement. Some faculty may know and under-
stand the rules and the requirements of proof and due process, but many
do not. Some believe the institution will support them as they impose
penalties, but many are skeptical.34 Some are worried about the negative
effects on teaching evaluations. Consequently, many faculty appear to be
quite reluctant to enforce academic dishonesty policies within the prevail-
ing culture.35
32
NATIONAL LAMPOONS ANIMAL HOUSE (Universal 1978). The film is the story of a fraternity
houses challenge to campus authority, a campus authority who, ironically, cannot see his way
through campus processes to remove the offender, for example, From this point forward you
are on double-secret probation.
33
For a full discussion of due process and court decisions on academic integrity breaches and
the disciplinary process, see Jennifer N. Buchanan & Joseph C. Beckham, A Comprehensive
Academic Honor Policy for Students: Ensuring Due Process, Promoting Academic Integrity, and In-
volving Faculty, 33 J.C. & U.L. 97 (2006).
34
One of the key decision factors for faculty in pursuing a breach of academic integrity is their
belief that they have administrative support. Sandra Nadelson, Academic Misconduct by Uni-
versity Students: Faculty Perceptions and Responses, 2 PLAGIARY: CROSS-DISCIPLINARY STUDIES IN PLA-
GIARISM, FABRICATION, AND FALSIFICATION 1 (2007).
35
Id. Nadelsons work represents the most recent examination of faculty willingness to take
enforcement actions. She found that of 460 incidents of detected cheating in undergraduate
courses, faculty took enforcement steps in 176 of the cases. In 110 cases of observed cheating
by graduate students, faculty took enforcement steps in forty-nine of them. The perceived
level of cheating was different, from intentional plagiarism to accidental plagiarism, and the
levels of enforcement action ranged from confrontation to sanctions to failure in the course to
suspension or explusion. Id.
Relative
Price of
Cheating
Q Amount of Voluntary Student Cheating/Time
Figure 1: Student Market for Academic Dishonesty
A consideration of markets for academic honesty/dishonesty for stu-

dents and for faculty offers insights into possible reforms. Figure 1 shows
the market for cheating at the student level. Some cheating will be
involuntary for one of the partiesFa student copying test versions from
another without that other students knowledge or permission. However,
lack-of-permission cheating seems rare given the uncertainties involved
in getting access to actual answers. Consequently, the focus in Figure 1 is
on voluntary cheating exchanges.
The horizontal axis can be thought of as being simply the number of
student-cheating incidents in a given time period, holding severity con-
stant. Or it can be viewed as an index of cheating (NS) that consists of the
number of incidents (N) times the severity of each incident (S).
In this market, current students may be demanders, suppliers, or
both. The demand curve for cheating by current students is determined by
the relative price of cheating, income, and tastes, ceteris paribus.36 The rel-
ative price includes the monetary sums paid or favors extended for help on
exams and papers along with the risk of getting caught and suffering
penalties. Pricewise, as Web sites advertising low-priced papers and theses
abound, and as the odds of harsh punishment drop, the quantity of stu-
dent cheating demanded increases.
36
Holding everything else constant.
Initially, demand may be quite inelastic for many students. They have
been told repeatedly that cheating is wrong, and so a fall in price from P3
to P2 leads to a modest increase in quantity demanded. But eventually a
price will be reached (P1) where demand becomes quite elastic due, for
example, to negligible enforcement or the realization that almost everyone
is now cheating.
As income levels increase, we expect demand for academic dishon-
esty to increase because we consider it to be a normal good. Rising levels of
national income allow more students to attend college, thereby increasing
the number of incidents or the overall index. Further, higher real house-
hold income points to greater demand for academic dishonesty if wealthier
households put tremendous pressure on their children to succeed at all
costs, or if they readily bail out their children at any cost. Children from
wealthier households have high opportunity costs of time, so they may be
more disposed to division and specialization effects to get through college.
The argument that cheating leads to the production of an inferior good is
then extrapolated to mean that that rising income, especially at the house-
hold level, will, in the interest of higher quality goods, result in a shift in
favor of more honestyFa notion we strongly question.
Offsetting the price and income effects that lead to more cheating
requires a strong emphasis on moral and ethical valuesFa taste factor to
economists, but one that cannot be ignored. Academic dishonesty is now an
issue that starts in middle schools, intensifies in high schools, and then
pervades U.S. universities because of existing social attitudes. An e-mail
from a high school student to one of the authors clearly reflects this phe-
nomenon: Just about everyone is cheating in some way or another. It is a
common thing among society that is seemingly accepted. And an under-
graduate business major, in a survey on ethics, writes: If people can lie
and get away with it, good for them.37
The supply curve for voluntary cheating is generated by available
copies of past exams and by some current students, former graduates,
friends, dropouts, paper-writing firms, teaching assistants, and staff willing
to sell insider information. Entry is fairly easy. As the relative price (return
to) cheating rises, the quantity supplied increases; and the entire supply
37
Danielle Alley & Morgan Dahl, A Study: Ethics of Upper-Division Business Students at Arizona
State University, at 22 (2004) (unpublished honors thesis, Arizona State University) (on file with
the authors).
Relative
Price S
Q Amount of Student Honesty/Time
Figure 2: Faculty Market for Academic Honesty
curve shifts out when those (firms) offering various means for supple-
menting academic performance increase or when technology changes.
In Figure 1, equilibrium price is P1 and equilibrium quantity is Q1.
As the curves are drawn, a modest increase in new firms or new technology
causes supply to shift out and ultimately a significant increase in overall
cheating given the elasticity of demand at prices lower than P1. Fifteen
states have laws dealing with fraud to try to restrict such shifts.38 In terms
of the demand curve, a change in tastes (a different culture) can have sig-
nificant impacts on reducing the amount of cheating both by shifting the
demand curve to the left and by making it more inelastic at existing prices.
Figure 2 represents the faculty market for student academic honesty
(faculty view the academic dishonesty problem in terms of the demand and
supply of academic honesty). As the relative price of honesty falls for fac-
ulty, they demand more honesty from their students. Reasons for a falling
price include: smaller class sizes so that faculty personally know students,
greater availability of antiplagiarism software, and strong backing for fac-
38
Arkansas, Colorado, Florida, Iowa, Kentucky, Louisiana, Massachusetts, Nevada, New
Hampshire, North Carolina, Rhode Island, South Carolina, Tennessee, Utah, and Virginia.
The laws center on falsely making, forging, counterfeiting, or altering transcripts, diplomas,
and grades, and engaging in false representation about ones educational attainment. Creola
Johnson, Degrees of Deception: Are Consumers and Employers Being Duped By Online Universities and
Diploma Mills?, 32 J.C. & U.L. 411, 448 (2006).
ulty when allegations occur. The demand curve may be quite elastic over a
broad range of prices at certain times. But in most cases the demand curve
is likely to be strongly inelastic over a substantial price range because fac-
ulty have generally demonstrated honesty in their academic endeavors and
expect the same from students.
The supply of honesty to this market comes directly from current
students and indirectly from parents and others who are setting values for
students. University administrators can enhance the process by rewarding
individual faculty members who deal with cheating effectively and enhance
the reputation of the institution.
Because the student supply of honesty in Figure 2 is strongly tied to
student demand for dishonesty in Figure 1, the supply curve of student
honesty in Figure 2 is drawn very inelastic at first because rising prices
have little impact on quantity supplied below P1. Between P1 and P2, the
supply curve becomes quite elastic as rising prices (greater individual re-
turns for honesty) change student incentives. Above P2 the supply curve
again becomes inelastic as students can only supply so much honesty in a
given period of time. As the curves are drawn here, shifting the demand
curve to the right has a significant impact because we are in the elastic
region of the supply curve.
Along with the markets for academic dishonesty and honesty by cur-
rent students and faculty, there are also the markets by administrators,
legislators, the local community, and quite critically, potential employers.
Externalities abound as the flow of knowledge across markets on who is
actually engaging in academic dishonesty is incomplete. While market ad-
vocates immediately think of the Coase Theorem to internalize the exter-
nalities, property rights are often difficult to delineate and transaction costs
can be substantial. Because of the screening difficulties, it appears that
many employers over the years have not strongly demanded ethical be-
havior from new employees, which in turn reduces market pressure on
universities. Change may result when employers must bear the cost of
background checks used to verify the information provided by colleges
and universities about students.39 Those costs could include certification
39
The rumblings of change may be beginning as universities tack on additional fees for pur-
poses of verifying credentials presented to them by job candidates. The following schools
currently add fees for purposes of checking credentials, some randomly and others one-for-
one: Haas School of Business at Berkeley, Yale Graduate School, UCLA Graduate School, and
Wharton. Herein lies a cost for breaches of integrity in the application process.
processes, both industry and employer based, created and used to verify
the graduates knowledge bases once presumed to be present because of
colleges and universities imprimaturs via degrees.
WHAT THE STUDENTS SAY: A LOOK AT SURVEY

RESULTS
While the data that appeared in the introduction on the levels of cheating
in colleges and universities are startling, these data do not adequately re-
flect the sheer ingenuity, chutzpah, and audacity in academic dishonesty
that we have obtained anecdotally through experience and student survey.
Innovation is a function of the presence of economic profits. There is no
definitive work that has established out-of-pocket as well as time costs de-
voted by faculty and institutions to the task of preventing academic dis-
honesty. The purpose of our 2003 editorials was simple: stir the pot to
renew concern and reinvigorate the debate about academic dishonesty.
Within the context of that opinion piece, we made the following sugges-
tions (with tongue firmly in cheek in some cases):
! Upon entry to the university, each student signs an affidavit that he or

she will not cheat.
! Students are expected to immediately report instances of cheating to the
proper authorities.
! If caught cheating, a student will be expelled from the university by
following due process, the incident will be duly noted on the students
transcript, and the students name will appear on the front page of the
ASU State Press.
! The new program would be publicized with great fanfare: ASU commits
to absolutes in academic integrity; ASU community joins together to
curb cheating; and ASU graduates earn their degrees the old-fashioned
wayFthrough hard work and study!
The administrative response to the proposals, as already noted, was

chilly. Terse e-mails questioned the timing of the articles and why the issue
had not been addressed through proper university channels. Such re-
sponses by university leaders are natural and expected. Administrators are
aware that academic dishonesty exists. Recognizing the institutional costs,
they seek to minimize both the problem and its public disclosure. Yet they
are sufficient realists to understand that their particular campus is perhaps
not a lone outlier. They are surely not much different from their peer in-
stitutions. Indeed, the citation of academic integrity lapses in this article
have been at the top-ranked institutions. Addressing academic dishonesty
openly and visibly carries the risk that the outside world will conclude that
the institution faces a large problem that is unique because of the inaction
of other institutions with regard to academic dishonesty. The prisoners
dilemma affects the institutions victimized by it.
In addition to the presidents and provosts initial doubts, a number
of MBA students within the university, and consistent with the discussion of
the implications of cheating on institutional reputation, began a campaign
to discredit our motives and see to it that the messengers were shot, or
some other sanction consistent with due process and federal sentencing
guidelines standards.40
However, as we indicated previously, the vast majority of student and
faculty e-mails were strongly supportive. Interestingly, it was the under-
graduate students who recognized the self-interest in self-regulation. The
Associated Undergraduate Students of ASU heeded the call to arms and
passed a Senate Resolution in May 2003, which stated that any form of
cheating in the classroom would result in student violators receiving a
grade of XE on their transcript (XE is the symbol for failure due to aca-
demic dishonesty) and a requirement that the violators complete fifty
hours of community service to remain in school. Under the student res-
olution, the penalty for a second offense was immediate expulsion. While
the resolution was nonbinding, it captured the attention of the university
community, the media, and the president and the provost.
In fall 2003, the Faculty Senates Student-Faculty Policy Committee
(SFPC) was asked to hold a series of meetings with the universitys Deputy
General Legal Counsel, the Dean of the Office of Student Life, the Inter-
collegiate Athletic Faculty Representative, the Presidents of Associated Un-
dergraduate and Graduate Students of ASU, and the University Hearing
Board (the committee of ultimate review for matters of student discipline).
Eight recommendations resulted from these extensive interactions and
were presented to the ASU Council of Deans in May 2004:41
40
Many decry the unwillingness of individuals to take the lead on difficult problems but then
question the motives of those who step forward.
41
The process was a bottoms-up inclusive one that brought all parties that would be involved
in and affected by new standards and enforcement processes. In that sense, the process fol-
lowed the recommended steps for maximizing buy-in to ethical standards and enforcement
! ASU needed a culture change in order to create an atmosphere in which

all forms of academic dishonesty are addressed openly and condemned
publicly.42
! Strong student leadership was necessary as a component in this cultural
change.
! All cases of cheating should be reported to the Office of Student Life in
order to have centralized records.
! Faculty should include written comments on cheating in the course syl-
labi and should discuss the consequences of cheating as part of the
course administrative details discussion on the first day of class.43
processes. See Gretchen A. Winter & David J. Simon, Code Blue, Code Blue: Breathing Life into
Your Companys Code of Conduct, ACCA Docket 20, No. 10, at 7289 (Nov./Dec. 2002), available at
http://www.acca.com/protected/pubs/docket/nd02/codeblue1.php; Patricia Harned, Do Ethics
Programs Really Work?, 1595 PLI/CORP 317 (2007).
42
While the recommendations were internally generated, they carried inherent recognition of
the components of culture and culture change, including support from the top hierarchy of
the organization, buy-in from those affected by the changes in rules and policies, and the
presence of disclosure and discussion of the components of the new culture. Harned, supra
note 41. The U.S. Sentencing Commission has issued the following seven guidelines for an
effective ethics program:
! high-level personnel assigned to the compliance function,
! written standards and procedures,

! due care in delegating discretionary authority,
! effective communication of program standards to all levels of employees,
! monitoring, auditing, and reporting,
! consistent enforcement and discipline, and
! response and prevention.
U.S. SENTENCING GUIDELINES MANUAL 8B2.1(b)(1). Transporting these characteristics to the
academic world appears to be quite easy and, indeed, their absence, as noted in previous
sections, appears to fuel increasing breaches.
43
The university provided recommended language for course syllabi that is posted on the
university Web site as part of the general counsels discussion of academic integrity policies
and enforcement. The language, as modified by one faculty member for more explicit details
on group work, follows:
You are expected to do your own work on all individual exercises and the exams. I
encourage you to speak to other students about the issues, but do not share work or
answers. Failure to follow this policy may result in zero points for both the receiver and
provider (if involved). Also, the instructor may take any other action described in the
current academic dishonesty policy. Some of the cases used in this class may have been
! All incoming students will sign an affidavit attesting to their knowledge

of and required adherence to the ASU rules and codes of conduct.
! Testing policies, particularly those involving the Internet, were to be
examined and reevaluated for academic integrity security.44
! Given that fifteen states have laws directed at the most severe forms of
cheating and misrepresentation, the Office of Legal Counsel should re-
view the need for legislative solutions.
! The president, provost, and deans should seize opportunities to speak
out on academic integrity.
The recommendations were met with grateful support from deans, who
agreed that visible steps were necessary to change the culture.45 The deans
also suggested reforms, including the standardized language about aca-
demic dishonesty that became part of each course syllabus used in their
respective colleges. The deans also suggested installing surveillance cam-
eras in large lecture halls for the dual purposes of monitoring during ex-
ams and documenting student conduct during exams. However, the deans
emphatically rejected more rules and any state intervention to curb aca-
demic dishonesty.
In the fall of 2005, the SFPC was asked to develop resolutions for vote
by the Faculty Senate. Central administration lent its full support at this
point in the change process because the issue had been depersonalized.
The initial shock of the public exposure had been mitigated by the uni-
versal involvement nature of the reform process and perhaps the lifting of
the veil of denial with the realization that there were multiple levels of
used before at ASU or other institutions. You may not consult with students previously
enrolled in this class or use their class notes or any other materials that were otherwise
provided in the past. Moreover, you may not use materials or solutions from other in-
stitutions (e.g., posted on the Internet), unless otherwise instructed in class for a par-
ticular assignment.
The 2007 Duke MBA scandal involved extensive cooperation among the students on their
answers to take-home assignments given by a faculty member and detected by that faculty
member because of verbatim similarities. Alison Damast, Duke MBAs Fail Ethics Test, Bus. Wk.,
Apr. 30, 2007, http://www.businessweek.com/bschools/content/apr2007/bs20070430_110466.
htm?chan=top+news_top+news+index_businessweek+exclusives (last visited July 2, 2007).
44
The breaches of integrity at Columbia University involved students fixing the clock that
limited the time available for their Internet exam. Robin Shulman, Journalism School Probes
Possible Cheating on Ethics Exam, WASH. POST, Dec. 3, 2006, at A11.
45
Cultural reforms come from symbolism, and the physical presence of declarations, discus-
sions, and forms serve as a beginning for the presence of those symbols.
concern at the university. The process also served to depersonalize the is-
sue as more information and research revealed to both students and ad-
ministrators that cheating is ubiquitous and not just an ASU problem.
Collectively, all involved in the process came to individual and group re-
alizations that netted meaningful solutions to the problems with academic
integrity.
Since the appearance of the 2003 editorials, students in both fresh-
man/sophomore and junior/senior classes have read them and then sub-
mitted one-page papers on their perceptions of the extent of cheating at
ASU, how much they have been involved, and what solutions or preven-
tion tools would and would not work. Culling through over one thousand
papers, we found the following key insights and observations from ASU
undergraduate students taking economics classes at various levels:
! The vast majority of students admit to academic dishonesty of some sort

(less than twenty percent said they never cheated at ASU and less than
five percent said that they have not seen any cheating at ASU).
! The students have concluded that academic dishonesty will never be
eliminated because a certain portion of the students will always cheat to
get the degree or, interestingly, simply for the sheer thrill of doing so.
! Cheating is extensive on campus at all levels by all kinds of students,
including honors students.
! Students will almost never report cheating by other student (Being a
snitch is worse than being a cheat.).46
! Students cheat because they can get away with it.
! If the SFPC proposes draconian solutions and then does not follow
through, students will consider faculty to be fools.
! If you think cheating is bad at ASU, just take a look at high schools.
! The best way to stop cheating in large classes is to have multiple versions
of exams and many proctors.
46
The concept of the snitch is at the forefront of the culture. See, for example, the debate in
USA Today over whether schools should reward students who come forward with information
about other students who have drugs or weapons on campus. The Hitch in Paying Snitches, USA
TODAY, Apr. 26, 2005, at 12A. Drug dealers have launched an antisnitch campaign against
homeowners who have gone to police seeking action against crack houses and methamphet-
amine labs located in their neighborhoods. The drug dealers point out the undesirability of
having such moral low-lifes in our society. Rick Hampson, Anti-Snitch Campaign Riles Police,
Prosecutors, USA TODAY, Mar. 29, 2006, at 1A. Prosecutors refer to the result of the campaign as
being witnesses who testify, I dont know nothin about nothing. Id.
! Signing affidavits upon admission is almost worthless. Cheaters will sign

anyway, and besides arent there transactions costs associated with keep-
ing names on file?47
Students who do not engage in academic dishonesty view those who

do as either lazy or the party-at-all-times crowd. Students perceive that
honors students may be cheating more than nonhonors students. Frater-
nities and sororities, with their ready access to files of written assignments,
are frequently criticized by non-Greek students.48
Rationalizations abound as students reveal and explain their aca-
demic dishonesty. Students stress the pressure they feel to make good
grades, especially by parents who are paying tuition. As one student suc-
cinctly put it, Id rather face my Dean any day about cheating rather than
my Dad about why I didnt pass a course. Students are also vocal about
how poor teachers encourage academic dishonesty if tests have little to do
with class discussions or are so outlandishly hard that mass cheating seems
the only answer. Quite a few added, You dont cheat in classes you love.
All students conclude that academic dishonesty can never be elimi-
nated entirely because of different moral and ethical beliefs held by indi-
viduals. While they do not believe that signed affidavits will have much
impact, they do argue for open discussions about cheating in all classes and
beginning the first day of class. Regardless of any discussion of morals and
ethics, students say that they will never turn in other students for academic
dishonesty. Being a snitch is far worse than cheating according to this
unwritten student code of honor. Many say, It is not my job to monitor
or report on other students. This is a reflection of the us-versus-them
mentality discussed earlier in the article.
The most interesting idea in the student responses comes from
junior/senior classes. While they confirm that some individuals just
get a high out of cheating and seem to enjoy the thrill of getting away
with it, many believe most big-time cheaters get weeded out because they
find they cant cut it. The challenge to holding the lies together becomes
too much.
47
It is always and strangely reassuring when students hoist us on our own petard.
48
There is some data indicating that there is more cheating by members of sororities and
fraternities. The Center for Academic Integrity reports a difference of about 14 percent
(higher among the frat and sorority students). See http://www.cai.org.
PROPOSALS AND RESOLUTIONS

After reviewing the written student responses and considering input from
faculty, the SFPC talked directly to student leaders about the chances for
their proposals success. Their overall response was an admonition that,
regardless of the reforms chosen, the key was consistent and unwavering
enforcement of the rules.49
One proposed process was a Coase-like solution to cheating: students
caught cheating would pay fines based on the severity of the action, much
along the lines of traffic fines, and the money collected would be used to
pay for brochures to educate students on cheating. Public fines meant that
names of offenders would be published in the ASU State Press, and tran-
scripts would include the major offenses. Moreover, students could attend
honesty seminars to remove some offenses from the transcript. Of course,
the two student representatives on the SFPC went into septic mental shock,
noting the tight budget constraints students face and whether the enforce-
ment and fines would be administered fairly. In the end, the SFPC rejected
fines, given all the enforcement and court costs, because of the cost and
resulting in a police-state mentality.
Along similar lines, the SFPC briefly debated whether to directly re-
ward students who report those involved in academic dishonesty. The goal
of this proposal was to help students overcome the code of silence with the
incentives of cold, hard cash. Some SFPC members complained about the
inherent ethical contradiction in getting individuals to turn on friends for
money, the police-state mentality again. However, the qui tam statutes un-
49
The students recommendation is, once again, consistent with the literature on culture. Ab-
solute, unequivocal, and egalitarian applications of rules is a critical and, again, symbolic part
of culture formation. The key questions in culture are:
! What are the key risks and how does the program address these risks?
! Is there any company activity that the program does not reach?
! Does the program have sufficient authority and resources?
! Do you think employees are convinced that management is committed to promoting
law abiding and ethical behavior?
! How do company incentives and culture support or detract from the program?
! What does management do to communicate the companys standards?
Jeffrey M. Kaplan, Stone v. Ritter: Implications for Directors and Compliance Programs, 1595 PLI/
CORP 615 (2007).
der federal law and the new whistleblower protections and incentives in
the Sarbanes-Oxley legislation spring from the collapses of cheating
companies, such as Enron and WorldCom, that lacked a culture prepared
to use incentives to rout out wrongdoing.50 Perhaps the more secular
problem (and due process issue) in the university setting is the proof in a
he-said-she-said situation and the resulting creation of a prevailing air of
distrust.
When the debates ended, the SFPC members were drawn to the
same economic-based resolution and conclusion. Because students will al-
ways cheat, and because administrators will always face incentives to deflect
the problem into the background, the teaching faculty must fight the battle
at the front lines for any chance of victory.
In March 2005, the SFPC came forward with resolutions for the Fac-
ulty Senate. After some strenuous arguments about proctors, each of the
six resolutions was approved:
Resolution 1. Whereas all universities face ongoing issues of academic integrity

and dishonesty (cheating, plagiarism, deception), whereas new technologies
(cell phones, other electronic devices) make testing ever more difficult, where-
as ASU strives for the highest standing as a renowned teaching institution, and
whereas ASU seeks ethical behavior and individual performance from its stu-
dents, be it resolved that the institution highly values a culture of academic
integrity, one that is respected by students, faculty, university administrators,
and the community at large.
Resolution 2. In order to enhance a culture of academic integrity, be it resolved

that the brochure on academic integrity is widely distributed and discussed by
student affairs, personnel and academic advisors with all incoming freshmen
and transfer students.
Resolution 3. In order to enhance a culture of academic integrity, be it re-

solved: that a website present the Universitys stance on academic integrity and
dishonesty that is signed by the President of the University, the President of the
Faculty Senate, and the Undergraduate and Graduate Student Association
Presidents; that faculty be strongly encouraged to have this website listed on
the first page of the course syllabus and to address cheating and plagiarism
from the start of the semester; that a faculty handbook be developed that
50
For background on federal qui tam statutes and Sarbanes-Oxley requirements for whistle-
blowers, see Christina Orsini Broderick, Qui Tam Provisions and the Public Interest: An Empirical
Analysis, 107 COLUM. L. REV. 949 (2007); Geoffrey Christopher Rapp, Beyond Protection: Invig-
orating Incentives for Sarbanes-Oxley Corporate and Securities Fraud Whistleblowers, 87 B.U. L. REV.
91 (2007); Beverley H. Earle & Gerald A. Madek, The Mirage of Whistleblower Protection Under
Sarbanes-Oxley: A Proposal for Change, 44 AM. BUS. L.J. 1 (2007).
summarizes the fundamental rules on cheating, institution support, and types

of testing methods in reference to the extent of cheating.

that up-to-the-moment anti-plagiarism software is made readily available for
all faculty wanting to employ them and that their usage is announced in class.

that a pool of proctors is established in each college to monitor large sections
on exam days and that the University formulate procedures and training
guidelines.

that each college designate an individual who serves as the lead authority when
cheating problems arise in the college, who receives from faculty any instances
of cheating that involve written sanctions, and who twice a year meets with the
other designates to derive numbers on the overall extent of cheating an pla-
giarism cases and to develop steps to be taken to address specific problems.
Resolution 1 reaffirms ASUs commitment to an outline of academic

integrity in light of new technologies (cell phones, text messaging, pagers,
and Internet sites to purchase papers) that make it easier for students to
cheat. Resolution 2 deals with a short brochure entitled Academic Integ-
rity that undergraduate advisors from different colleges put together in
2003 to distribute to all freshmen at orientation. It defines what constitutes
academic dishonesty, cheating, plagiarism, and inappropriate collabora-
tion, and then explains the consequences of cheating while discussing how
students can avoid the cheating trap. The cheating brochure is now dis-
tributed to all incoming students and will be sponsored jointly by the Pro-
vosts Office and the Faculty Senate to confirm strong institutional support.
Resolution 3 is both ASUs statement to the world about our com-
mitment to academic honesty and our approach to the affidavit issue. Be-
cause the purpose of signing an affidavit is to confirm that students are
aware of the rules, and because requiring all incoming students to go to the
Web site on cheating accomplishes the same purpose if students are told
they are responsible for knowing ASUs stance, and because storing sig-
natures is costly, certain technology can be used to our advantage.
The antiplagiarism software in Resolution 4 is self-explanatory. Res-
olution 5 deals with proctors (surveillance cameras were rejected as too
costly to monitor). The proctors will take special workshops on how to
identify cheating and what to do in specific situations. The Office of Stu-
dent Life holds both the responsibility and jurisdiction for overseeing this
process and bringing the coordinators and proctors together several times
a year. The handbook for faculty is critical because many faculty know al-
most nothing about the actual rules or the appropriate persons to contact.
In addition, the handbook will discuss different types/forms/approaches to
testing and what to expect in the way of cheating with each.
Resolution 6 serves three purposes. One is to obtain more accurate
totals on major cheating cases across all colleges. Another is to spot repeat
offenders. Often, when caught, a student will argue this is the first time, he
or she is sorry and it will never happen again. This resolution will provide a
system for determining whether a student is being forthright and provide
a means whereby repeat offenders face more appropriate penalties. Final-
ly, by bringing the college designates together several times a year, any new
problems can be quickly spotted and addressed.
Overall, ASU is following the crime reduction model of sociologist
James Q. Wilson that was used by Mayor Rudy Giuliani to improve the
social fabric in New York City. Fix the broken windows and the crime goes
down. Mr. Giuliani removed the squeegee window washers from the
streets as a symbol of enforcement and orderly conduct. Stop the most
visible and common day-to-day violations (cheating on exams in large lec-
ture classes) to convince people that a new culture has emerged.51 All
offenses are under attack, but ASU will confront the problem of academic
dishonesty on a marginal, step-by-step basis, and faculty will play a more
proactive role in enhancing a culture of academic integrity. The reforms
were announced to the public in the Arizona Republic on April 3, 2005, in an
editorial that reflected the positive step of ASU taking a lead role on a
national problem. Fundamentally, ASU President Michael Crows concept
of a New American University means great teaching and great research,
but much more importantly, it means a culture of academic honesty that all
graduates and the community at large can respect.
CONCLUSIONS
Whether more cheating and plagiarism occurs in colleges today compared
to the past is not an easy question to answer. While it is true that a larger
51
George R. Kelling & James Q. Wilson, Broken Windows, ATL. MONTHLY, Mar. 1982; James Q.
Wilson, Making Neighborhoods Safe, ATL. MONTHLY, Feb. 1989. Both are available at http://
www.theatlantic.com/doc/prem/198203/broken-windows. One of Wilsons books, THINKING
ABOUT CRIME (1983), provides the backdrop for both articles.
percentage of college students now admit to cheating in some way than

those who did so on self-reporting surveys conducted in the past, we still
do not know the total number of times individuals cheat nor the number of
minor cheating violations versus major transgressions. Further, definition-
al differences contribute to the inability to assess longitudinal trends on
cheating. Thus, a definitive index of overall academic dishonesty cannot be
constructed.
But we have strong clues that the culture students have lived in, ac-
ademically and otherwise, has influenced their attitudes and those atti-
tudes seem to make them more prone to cheating than previous
generations. Since preschool, they have been in highly supervised envi-
ronments in which group learning, team projects, and feeling empowered
become more important than getting the precise answer.52 They have
grown up in a highly permissive ethical environment in which winning
takes precedence over everything else.53 They are doted on by parents and
teachers.54 Parents of generations X, Y, and Z often will do almost anything
for them, but also put on them tremendous pressure to do well in school.55
Students idolize athletes who use banned performance-enhancing drugs to
achieve fame and money, and they see top business leaders defrauding the
public and often receiving only minor punishments in the process.56 In
52
Nadira Hira, You Raised Them, Now Manage Them, FORTUNE, May 27, 2007, at 38. Nira notes
that they cannot do anything without a team and a couple of cheerleaders. Id. at 42.
53
A recent Pew survey found that those in the eighteen to twenty-five age group list getting
rich as their most important value (81 percent) followed by being famous as the second (51
percent). Helping others came in fourth at 30 percent and getting more spiritual was
dead, as it were, last, at 10 percent. See http://www.pewresearch.org (last visited Jan. 3, 2008).
54
Hira refers to them as the highest-maintenance workforce in the history of the world. Supra
note 52, at 40. Thirty-eight percent move back in with their parents after graduation from
college and 73 percent continue to receive financial aid from their parents through age
twenty-five. Sixty-three percent receive help with their errands from their parents through
age twenty-five. Pew poll, supra note 53. One mother reports that she not only took her
daughter to kindergarten on the first day, but that she took her to work on her first day on the
job. Hira, supra note 52, at 44.
55
Hira also notes they are ambitious and demanding, but without loyalty. Hira, supra note 52.
56
Witness the great baseball, steroids, and Hall-of-Fame debates. Mark Hyman, Steroid Scan-
dal? Pass the Peanuts: Do Fans Care As Much As a Few Politicos and Media Scolds? Bus. Wk., Dec. 20,
2004, at 44, to wit, Will fansFespecially younger ones weaned on Arnold-sized action heroes
and video gamesFfind a game played by mere mortals less exciting entertainment? One
ESPN writer noted, Whose dreams were crushed because they didnt take steroids? David
Wells, Will to Power, http://sports.espn.go.com/espn/eticket/story?page=steroids&num=1
short, their frames of references and life experiences differ substantially

from the students surveyed in the past. The presence of instruction on
academic integrity, disclosures on academic integrity policies and penalties,
and signatures on codes of academic integrity are the tools of educating
them about the culture of colleges and universities, a culture that thrives
and is dependent upon an atmosphere of truth and candid evaluation of
everything from research questions to student performance. In this point
of instruction, the economic analysis intersects with the survey and the in-
stitutional experience at ASU. There is a problem of asymmetrical infor-
mation on the parts of the students. That lack of full information prevents
the application of the Coase Theorem by the students, an effect that means
they are unable to reach equilibrium on their own because of a lack of
understanding of the risks, property rights, and externalities involved in
academic dishonesty.
Moreover, college students today come from high school environ-
ments, accustomed to cheating, and often highly skilled at it. They have a
strong sense of entitlement, believing they are customers of universities
and that customers are always right.57 Many can look you directly in the
eye when faced with cheating and plagiarism charges and, in all sincerity,
say that they did not do anything wrong (because in their world they be-
lieve they did not).
Some strong market advocates may believe that the current equilib-
rium state in the marketplace for college cheating is optimal. In other
words, the amount of academic dishonesty being produced does indeed
maximize social welfare in light of the externalities, the individual benefits
and costs, and the need for younger generations to challenge existing au-
thority. Violators are weeded out by the rigors of the university environ-
ment, so that graduates represent the survival of the fittest.
However, the disease of academic dishonesty is spreading and the
related externalities are damaging. While American universities have en-
(Nov. 9, 2005). This is also the generation that came of age during the O.J. Simpson case and
its many iterations of the real killer and continuing disputes about who was entitled to collect
what from whom and on what types of activities, from publishing to autographs. David Carr,
This Time Judith Regan Did It, N.Y. TIMES, Dec. 18, 2006, at C1 & C10.
57
One Gen Yer commented that she grew up believing I could do no wrong. Hira, supra
note 52, at 41. They believe, as well, that they are the customers in the workplace, demanding
personal relationships with managers who believe that there should not be personal relation-
ships with employees. How will I know they care? is the response of the Gen X and Gen Y
employees. Hira, supra note 52, at 44.
joyed top standing in the world for decades, this position is at risk if college
degrees no longer provide the appropriate signaling to the outside world.
The trust so necessary for both markets and good teaching is destroyed,
and an anything-goes environment takes over. The moral and ethical val-
ues present in this proposed reinstatement of integrity in the academy are
perhaps a step toward restoring the moral and ethical values inherent in
free markets.
By changing the culture in universities, we serve the marketplace by
sending out graduates who understand the critical role of integrity and
trust in systemic functions and have been trained to live those principles. If
universities do not confront the problem now, then when? And if univer-
sities do not tackle dishonesty, who will? Rather than a vicious cycle down-
ward, these reforms and cultural changes can start a virtuous circle upward
not just throughout U.S. institutions of higher learning, but also through-
out the marketplace that will eventually hire the graduates. Major revo-
lutions often begin with small steps. Small steps at individual colleges and
universities could bring systemic reforms in the broader culture.

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Journal of Legal Studies Education

Volume 25, Issue 2, 183214, Summer/Fall 2008

An Economic Analysis of Academic

Professor of Economics, W.P. Carey School of Business, Arizona State University.

Once the education contract is performed on both sidesFwith the

academic dishonesty is prevalent, the grades awarded are skewed because

credibility problem that the graduating and evaluating institutions

STATE OF THE UNION ON ACADEMIC DISHONESTY

been reached following an increasing trend from eleven percent in 1963 to

! Unauthorized collaboration on assignments increased from 11 percent to 49 percent.

Individual students who understand the market forces of job rewards

the institution of reducing cheating, including labor (professors, staff, and

MICROECONOMIC ARGUMENTS ON ACADEMIC

as a commodity that must flow as freely as possible if the marketplace is to

valued diplomas that ultimately affect their reputations and marketability,

Drawing upon Michael Spences work on high-quality (noncheating)

fessional and business world. The problem here, of course, is a blurring of

Rules about academic dishonesty declare established views of ethical and

Q Amount of Voluntary Student Cheating/Time

Figure 1: Student Market for Academic Dishonesty

A consideration of markets for academic honesty/dishonesty for stu-

Q Amount of Student Honesty/Time

Figure 2: Faculty Market for Academic Honesty

WHAT THE STUDENTS SAY: A LOOK AT SURVEY

! Upon entry to the university, each student signs an affidavit that he or

The administrative response to the proposals, as already noted, was

! ASU needed a culture change in order to create an atmosphere in which

! written standards and procedures,

! All incoming students will sign an affidavit attesting to their knowledge

! The vast majority of students admit to academic dishonesty of some sort

! Signing affidavits upon admission is almost worthless. Cheaters will sign

Students who do not engage in academic dishonesty view those who

PROPOSALS AND RESOLUTIONS

Resolution 1. Whereas all universities face ongoing issues of academic integrity

Resolution 2. In order to enhance a culture of academic integrity, be it resolved

Resolution 3. In order to enhance a culture of academic integrity, be it re-

summarizes the fundamental rules on cheating, institution support, and types

Resolution 4. In order to enhance a culture of academic integrity, be it resolved

Resolution 5. In order to enhance a culture of academic integrity, be it resolved

Resolution 6. In order to enhance a culture of academic integrity, be it resolved

Resolution 1 reaffirms ASUs commitment to an outline of academic

percentage of college students now admit to cheating in some way than

short, their frames of references and life experiences differ substantially

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