Corrupt arrangements are characterized by a high risk of opportunism: double-dealing, whistle-blowing and extortion are significant uncertainties for participants in corrupt transactions. This paper demonstrates how legislators may use an asymmetric design of (criminal) sanctions and leniency...

Corrupt arrangements are characterized by a high risk of opportunism. Moreover, denunciation and extortion add another layer of uncertainty for participants in corrupt transactions. This paper demonstrates how legislators can use an asymmetric design of criminal sanctions to amplify these...

This study embeds transaction cost analysis into a Law and Economics model to produce general recommendations on how to deter bribery. Governments may deter bribery either by high penalties and risks of detection, potentially supported by leniency given to those who report their infraction...

An authority delegates a monitoring task to an agent. It can only observe the number of detected offenders, but neither the monitoring intensity chosen by the agent nor the resulting level of misbehavior. We provide a necessary and sufficient condition for the implementability of monitoring...

Harassment bribes - payments people give in order not to be denied what they are legally entitled to - are common in for example India. Kaushik Basu recently made a 'radical' proposal to reduce its occurrence: Legalize the act of giving the bribe and double the fine for accepting the bribe! We...

This article has been significantly revised. Please refer to the revised version, titled “Allocating Regulatory Resources”, which is available on SSRN at: 'http://ssrn.com/abstract=2304434' http://ssrn.com/abstract=2304434.This article incorporates the concept of legal placebo effects into...

I analyze subjects' sensitivity to parametric change that does not affect the theoretical prediction. I find that increasing the value of an illegal transaction to a briber and reducing the penalties to both culprits leads to more bribes being paid but does not affect the cooperation of the...

We study the effects of loaded instructions in a bribery experiment. We find a strong gender effect: men and women react differently to real-world framing. The treatment effect becomes significant once we allow for gender specific coefficients. Our paper contributes to the (small) literature on...

We conduct an experiment to analyze the conditions under which individuals' propensity to engage in bribery and tolerance towards corrupt actors differ across gender. We manipulate the key bribery dimensions — the benefits to corrupt actors and the negative externality caused to other people....

The paper presents some empirical puzzles in the relationship between bureaucratic wages and corruption levels, and attempts to reconcile them within a general equilibrium framework that leads to multiple equilibria in the incidence of corruption. In the presence of such multiple equilibria, the...