IBSEN researchers Alberto Antonioni and Anxo Sánchez (together with Marco Tomassini) have recently published an interesting study on reputation fraud and its impact on cooperation and welfare: “Cooperation Survives and Cheating Pays in a Dynamic Network Structure with Unreliable Reputation“. Reputation is crucial for online social and economic interactions among otherwise anonymous individuals, but concerns about its reliability and the possibility of fraud are mounting. In an experiment in which individuals can behave properly and benefit each other or take advantage of the counterpart, they show that when reputation can be faked good behaviour seems to be unaffected. However, beneath that aggregate level the population splits in two subgroups, one of which cheats and exploits the other. The cost of the fraud is supported by honest players, while cheaters manage to keep their benefit. As a result, inequality in the population, as measured by the Gini coefficient of the wealth distribution, increases, showing the largely harmful effects of reputation fraud.