The Tragedy of Corruption

46 Pages Posted: 2 Dec 2015 Last revised: 26 Nov 2016

See all articles by Yefeng Chen

Yefeng Chen

Zhejiang University - College of Economics

Shuguang Jiang

Shandong University - Center for Economic Research

Marie Claire Villeval

Groupe d'Analyse et de Théorie Economique (GATE), CNRS; IZA Institute of Labor Economics; Global Labor Organization (GLO)

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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

Chen, Yefeng and Jiang, Shuguang and Villeval, Marie Claire, The Tragedy of Corruption (August 22, 2016). Available at SSRN: https://ssrn.com/abstract=2697983 or http://dx.doi.org/10.2139/ssrn.2697983

Yefeng Chen

Zhejiang University - College of Economics ( email )

Yuquan Campus 38 Zheda Road
Hangzhou, Zhejiang 310027
China

Shuguang Jiang

Shandong University - Center for Economic Research ( email )

Jinan, Shandong 250100
China

Marie Claire Villeval (Contact Author)

Groupe d'Analyse et de Théorie Economique (GATE), CNRS ( email )

93, chemin des Mouilles
Ecully, 69130
France
+33 472 86 60 79 (Phone)
+33 472 86 60 90 (Fax)

HOME PAGE: http://sites.google.com/view/marie-claire-villeval

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Global Labor Organization (GLO) ( email )

Collogne
Germany

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