> getting cheated or cooperating with people who act in bad faith is what creates the cheating

That reminds me of some game-theory stuff, a relatively simple "tit-for-tat with forgiveness" approach does pretty well. It matches a lot of our intuition too: Be nice, punish betrayal, but not too disproportionately.

Not the thing I was thinking of, but found this fun little interactive presentation that goes into some other factors/approaches: https://ncase.me/trust/