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The Tragedy of Corruption

Author

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  • Chen, Yefeng

    () (Zhejiang University)

  • Jiang, Shuguang

    () (Zhejiang University)

  • Villeval, Marie Claire

    () (CNRS, GATE)

Abstract

We investigate corruption as a social dilemma by means of a bribery game in which a risk of collective sanction of the public officials is introduced when the number of officials accepting a bribe from firms reaches a certain threshold. We show that, despite the social risk, the pursuit of individual interest prevails and leads to the elimination of honest officials over time. Reducing the size of the groups while increasing the probability of collective sanction diminishes the officials' corruptibility but is not sufficient to eliminate the Tragedy of corruption that leads both firms and officials to earn less than in the absence of corruption.

Suggested Citation

  • Chen, Yefeng & Jiang, Shuguang & Villeval, Marie Claire, 2016. "The Tragedy of Corruption," IZA Discussion Papers 10175, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10175
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    More about this item

    Keywords

    corruption; social dilemma; collective risk; sanction; experiment;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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