We let students play a corruption game, embedded into a variant of the ultimatum game. Those allotted the role of public servants chose between whistleblowing, opportunism and reciprocity by delivery (of a contract) and those acting as businesspeople chose how to frame the game and whether to...

This paper reports on an experiment of corruption that was conducted in two treatments: one with the possibility of detection and one without. It turns out that monitoring reduces corruption through deterrence; at the same time, it destroys the intrinsic motivation for honesty. Thus the net effect...