SFB 303 Discussion Paper No. B - 459

Author: Abbink, Klaus, Bernd Irlenbusch, and Elke Renner
Title: An Experimental Bribery Game
Abstract: Essential characteristics of corruption are (1) a reciprocity relationship between briber and public official, (2) negative welfare effects, and (3) high penalties when discovered. We separate the influences of these factors in an experiment. In a two-player game reciprocation is economically inefficient through negative externalities. A control treatment without externalities is also conducted. In a third, so-called sudden death treatment, corrupt pairs face a low probability of exclusion from the experiment without payment. The results show that reciprocity establishes bribery relationships, where negative externalities have no apparent effect. The penalty threat significantly reduces corruption, although discovery probabilities are typically underestimated.
Keywords: Corruption, experiments, reciprocity, fairness, repeated games
JEL-Classification-Number: C91,D62,D72,D73,K42
Creation-Date: October 1999
URL: ../1999/b/bonnsfb459.pdf

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