Risk attitude, beliefs, and information in a Corruption Game – An experimental analysis

For our experiment on corruption, we designed a coordination game to model the influence of risk attitudes, beliefs, and information on behavioral choices and determined the equilibria. We observed that the risk attitude of the participant failed to explain their choices between corrupt and non-corrupt behavior. Instead, their beliefs appeared to be a better predictor of whether or not they would opt for the corrupt alternative. Furthermore, varying the quantity of information available to the players (modeled by changing the degree of uncertainty) provided additional insight into the players’ propensity to engage in corrupt behavior. The experimental results show that a higher degree of uncertainty in the informational setting reduces corruption.

► Experiment on corruption as a multi player coordination game.
► Participants can coordinate either towards corrupt or honest behavior.
► Risk attitudes concerning punishment in case of detection fail to explain behavior.
► Beliefs concerning the honesty of other participants predict the observed behavior.
► Increasing uncertainty by reducing transparency of others’ honesty reduces corruption.