The Tragedy of Corruption
46 Pages Posted: 2 Dec 2015 Last revised: 26 Nov 2016
There are 2 versions of this paper
The Tragedy of Corruption. Corruption as a Social Dilemma
Date Written: August 22, 2016
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.
Keywords: Corruption, social dilemma, collective risk, sanction, experiment
JEL Classification: C92, D73, H41
Suggested Citation: Suggested Citation