Self-Selection into corruption: Evidence from the lab

Abstract

We study whether opportunities to extract rents in a job affect the type of individuals who are attracted to it in terms of their underlying integrity. We do so in a laboratory experiment in which participants choose between two contracts that involve different tasks. We experimentally introduce the possibility of graft in one of them and study the sorting of subjects across contracts based on an incentivized measure of honesty. We find that the corruptible contract changes the composition of subjects because it attracts the most dishonest individuals and repels the most honest ones. In addition, we observe extensive graft when the opportunity is available. We introduce a double randomization strategy to disentangle the extent of which stealing responds to the aforementioned negative selection or to pure incentives (net of selection). We find that, in this setting, selection is the main driver of graft. Our results have clear policy implications to curb corruption.

Morality, Altruism, and Occupation Choice: Theory and Evidence

“…These subjects appear to use a simple heuristic of maximizing their legal monetary payoffs in occupation choice. 9 It is quite conceivable that many subjects, despite being altruistic and moral in other domains, may use the heuristic of legal monetary maximization in occupation choice and then use their payoffs to exhibit altruism elsewhere, e.g., contribute to charity. They might also be 8 A potential explanation, which is not a part of our model, and neither tested in our experimental results, is guilt-aversion.…”

“…Formal modeling will need to consider explicitly beliefs-based models using the machinery of psychological game theory (see Dhami et al, 2019; and also consider the endogeneity of the preference parameters themselves. 9 The evidence increasingly shows that in making choices, many people use simple context-dependent heuristics (Dhami and Sunstein, 2022).…”

“…However, this literature is not directly related to our work. 2 We are only aware of a single exception, Brassiolo et al (2021), but our work differs significantly from theirs. First, they do not provide a theoretical model with rigorous predictions; their analysis is entirely empirical.…”

Selection effects on dishonest behavior

“…Yet another study found that those more willing to cheat were also more likely to opt for information that facilitated justification of dishonest behavior (Akin, 2019). Most recently, Brassiolo, Estrada, Fajardo & Vargas (2020) demonstrated that in comparison with conditions using artificial tokens, conditions enabling embezzlement of real money drove away honest individuals while attracting those more willing to cheat. Given the relative lack of attention to selection effects in the research on dishonesty, the primary aim of this paper is to analyze these effects and their relationship to cheating.…”