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The Virtuous Circle of Distrust: A Mechanism to Deter Bribes and Other Cooperative Crimes

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Author Info
Robert Cooter (University of California at Berkeley)
Nuno Garoupa (Universitat Pompeu Fabra, and Harvard Law School)

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Abstract

Some crimes involve the cooperation of two or more criminals for mutual gain. Instead of deterring these crimes, the state can prevent them by creating distrust among criminals. The state should offer amnesty and a bounty to the criminal who first secures punishment of the other participant in a cooperative crime. We especially focus on bribes, which occur when someone pays an agent to violate a duty owed to the principal. To prevent bribes, the principal offers amnesty and a bounty to the debtor or agent who secures the other party’s punishment. Under certain conditions, the game’s equilibrium changes from cooperation to non-cooperation (prisoner’s dilemma), so bribes disappear.

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Paper provided by Berkeley Olin Program in Law & Economics in its series Berkeley Olin Program in Law & Economics, Working Paper Series with number 1057.

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Date of creation: 07 Nov 2000
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Handle: RePEc:cdl:oplwec:1057

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Qianwei Ying & Guangnan Zhang, 2008. "Fragmentation of licensing right, bargaining and the tragedy of the anti-commons," European Journal of Law and Economics, Springer, vol. 26(1), pages 61-73, August. [Downloadable!] (restricted)
  2. Ogus, Anthony, 2005. "Towards Appropriate Institutional Arrangements for Regulation in Less Developed Countries," Centre on Regulation and Competition (CRC) Working papers 30644, University of Manchester, Institute for Development Policy and Management (IDPM). [Downloadable!]
  3. Bryane Michael (Linacre College), . "Drafting Implementing Regulations for International Anti-Corruption Conventions," QEH Working Papers qehwps150, Queen Elizabeth House, University of Oxford. [Downloadable!]
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