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

  • Cooter, Robert
  • Garoupa, Nuno

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 qt83c0k3wc.

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Date of creation: 07 Nov 2000
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Handle: RePEc:cdl:oplwec:qt83c0k3wc
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