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The paper investigates the introduction of an institution, in form of an impartial authority (third party), into a two-person situation. The impartial authority can reward a stranger for acting according to a desired behavioral norm. The reward is costly for the authority and her behavior cannot be strategic, i.e., it cannot lead to higher earnings for her in a later stage. A trust game followed by a helping game is implemented. The trustee in the trust game becomes the recipient in the helping game. This paper demonstrates that positive strong indirect reciprocity can exist in one-shot settings (helpers transfer more money to their recipients the more these are trustworthy) and that positive strong indirect reciprocity is not diminishing if the reward can be anticipated. Furthermore, the positive strong indirect reciprocity is correctly anticipated and leads to higher trustworthiness in the treatment.

Leaders often have to weigh ethical against monetary consequences. Such situations may evoke psychological costs from being dishonest and dismissing higher monetary benefits for others. In a within-subjects experiment, we analyze such a dilemma. We first measure individual dishonest behavior when subjects report the outcome of a die roll, which determines their payoffs. Subsequently, they act as leaders and report payoffs for a group including themselves. In our main treatment, subjects can apply for leadership, whereas in the control treatment, we assign leadership randomly. Results reveal that women behave more dishonestly as leaders while men behave similarly in both the individual and the group decision. For female leaders, we find that sorting into leadership is not related to individual honesty preferences. In the control we find that female leaders do not increase dishonesty. A followup study reveals that female leaders become more dishonest after assuming leadership, as they align dishonest behavior with their belief on group members' honesty preferences.

Leaders often weigh ethical against monetary consequences. We experimentally study such a dilemma where leaders can benefit their groups at the expense of moral costs. First, we measure individual dishonesty preferences and, second, leaders' reporting decisions for a group by using payoff-reporting games. We focus on an endogenous leadership setting, where subjects can apply for leadership. Women have less pronounced dishonesty preferences than men, but increase dishonesty as leaders. The increase disappears when leadership is randomly assigned. A follow-up study reveals that women leaders behave dishonestly when they believe their group members prefer dishonesty.