Bribery: Behavioral Drivers of Distorted Decisions
77 Pages Posted: 4 Jul 2016 Last revised: 18 Jan 2018
Date Written: January 1, 2018
We experimentally investigate behavioral drivers of bribery, focusing on the role of self- interest, reciprocity, and moral costs associated with distorting judgment. In our experiment, two participants compete for a prize; a referee picks the winner. Participants can bribe the referee. When the referee can keep only the winner’s bribe, bribes distort her judgment. When the referee keeps the bribes regardless of the winner, bribes no longer influence her decision. A field experiment in an Indian market confirms these results. These findings imply that our participants are influenced by bribes out of self-interest, and not because of a desire to reciprocate. Further evidence shows that self-interest guides decisions to a greater extent when referees have scope for avoiding the moral costs associated with distorting judgment. As a result, limiting referees’ ability to form self-serving evaluations can significantly reduce the effectiveness of bribes.
Keywords: Bribery, Corruption, Reciprocity, Moral Costs, Motivated Beliefs
JEL Classification: D73, C91, K42
Suggested Citation: Suggested Citation