Writing from Japan. You are absolutely right about the "Finite Game". If you can reset your reputation and start over, "Cheating" is indeed the winning strategy.

However, here in Japan, we have a different operating system called "Shinise" (companies lasting over 1,000 years). They play an "Infinite Game". Their reputation is tied to a "Noren" (shop curtain) or a family name that has been built over centuries. You cannot simply discard it and respawn.

There is a movie hitting theaters here in Tokyo right now called "KOKUHO" (National Treasure). It depicts Kabuki actors who inherit a "Name" (Myoseki) with 400 years of history. Watching it, I realized: In their world, cheating doesn't just mean losing a job. It means "killing the Name" for all ancestors and future generations. The penalty is infinite.

When the "Reset Button" is removed from the game, "Honesty" and "Sanpo-yoshi" (Three-way satisfaction) naturally become the mathematically dominant strategies. Cheating only works when you plan to exit.