Essential characteristics of corruption are (1) reciprocity relationships between bribers and public officials, (2) negative welfare effects, and (3) high penalties when discovered. We separate the influences of these factors in an experiment. In a two-player game reciprocation is economically inefficient through negative externalities. A control treatment without externalities is also conducted. In a third, so-called sudden death treatment, corrupt pairs face a low probability of exclusion from the experiment without payment. The results show that reciprocity can establish bribery relationships, where negative externalities have no apparent effect. The penalty threat significantly reduces corruption, although discovery probabilities are typically underestimated.

We study how conflict in contest games is influenced by rival parties being groups and by group members being able to punish each other. Our motivation stems from the analysis of socio-political conflict. The theoretical prediction is that conflict expenditures are independent of group size and of whether punishment is available or not. We find, first, that conflict expenditures of groups are substantially larger than those of individuals, and both are above equilibrium. Second, allowing group members to punish each other leads to even larger conflict expenditures. These results contrast with those from public goods experiments where punishment enhances efficiency.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper contributes to the ongoing methodological debate on context-free versus in-context presentation of experimental tasks. We report an experiment using the paradigm of a bribery experiment. In one condition, the task is presented in a typical bribery context, the other one uses abstract wording. Though the underlying context is heavily loaded with negative ethical preconceptions, we do not find significant differences. We conjecture that the experimental design transmits the essential features of a bribery situation already with neutral framing, such that the presentation does not add substantially to subjects' interpretation of the task. Terms of use: Documents in KeywordsCorruption, context, framing, valence, experimental instructions, laboratory, trust, reciprocity, ethical behaviour, social norms JEL Classification CodesC91, D62, D72, D73, K42 AcknowledgementsThe authors thank Heiko Schmidt for valuable research assistance, Bernd Irlenbusch, Elke Renner, Reinhard Selten, and seminar participants in Amsterdam, Wittenberg and Strasbourg for helpful comments and suggestions. All errors remain our own. Financial support by the European Union through the TMR research network EN-DEAR (FMRX-CT98-0238) is gratefully acknowledged.

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