How would one define corruption. In economic terms, one definition could that two parties engage in a mutually beneficial transaction to the detriment of an other and society in general, and this despite rules put in place to prevent this. I am not sure everyone will agree with this definition, as it includes everyday situations that one may not generally associate with corruption, such as small gifts we offer to superiors or teachers.
Ulrike Malmendier and Klaus Schmidt study, without calling it corruption, such behavior in an experimental setting. They find that subjects of a gift do reciprocate even if they have no incentive to do so. Worse, they reciprocate more if it is at the expense of a third party, and everybody knows that the third party is affected. Finally, participants correctly assess how their behavior was influenced by gifts, but believe others are much more influenced. It is difficult to square any standard theory with these results. It also implies that such gift-giving is going to be difficult to stamp out, at least when it is relatively small such as in these experiments.
Ulrike Malmendier and Klaus Schmidt study, without calling it corruption, such behavior in an experimental setting. They find that subjects of a gift do reciprocate even if they have no incentive to do so. Worse, they reciprocate more if it is at the expense of a third party, and everybody knows that the third party is affected. Finally, participants correctly assess how their behavior was influenced by gifts, but believe others are much more influenced. It is difficult to square any standard theory with these results. It also implies that such gift-giving is going to be difficult to stamp out, at least when it is relatively small such as in these experiments.
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