IDEAS home Printed from
   My bibliography  Save this paper

An Experimental Analysis of Third-Party Response to Corruption


  • Lata Gangadharan
  • Ananish Chaudhuri
  • Nisvan Erkal


It is a well-established fact that corruption is a widespread phenomenon. An important aspect of corruption is that two parties act jointly in order to further their own interests at the expense of a third party. The response of the third party has a significant impact on the persistence of corruption. This paper contributes to the experimental literature on corruption by analyzing third-party response to corruption. We report results from a laboratory experiment in which subjects participate in a one-shot, anonymous-pairing, three-person game, where one subject is a firm, the second is an official, and the third is a citizen. Contrary to the theoretical predictions of the model, we find that more than 50% of citizens choose to punish. The reasons given for choosing to punish are negative reciprocity, a sense of fairness, and a desire to correct wrong behavior. Increasing the amount of the maximum punishment that the citizens can impose on the firms and the officials allows us to observe that the number of firms who choose to offer a bribe decreases and the number of citizens who choose to punish increases. This is despite the fact that imposing a higher punishment amount imposes a higher cost on the citizen. Among the citizens, our results reveal that women in general are more willing to punish corrupt behavior and are less likely to accept the bribes offered to them. These findings are in agreement with the argument that since women are often the victims of corruption, they may be more critical of corrupt actions and may, therefore, be more willing to punish. The results also reveal that citizens in developing countries are more accepting of corrupt behavior. Given the high levels of corruption that exist in developing countries, this result provides experimental support for the theory that the frequency of corruption may be related to a society’s willingness to accept corrupt behavior, which, in turn, may help in the sustenance of corruption

Suggested Citation

  • Lata Gangadharan & Ananish Chaudhuri & Nisvan Erkal, 2004. "An Experimental Analysis of Third-Party Response to Corruption," Econometric Society 2004 Australasian Meetings 220, Econometric Society.
  • Handle: RePEc:ecm:ausm04:220

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Corruption; Laboratory Experiments; Private Law Enforcement;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecm:ausm04:220. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.