Too Much of a Good Thing: Reciprocity and Corruption
In the spring of 2019, over 50 wealthy parents in the United States were charged in a shocking college admissions scandal, with many of them currently facing jail time and hefty fines.1 The parents, who included famous actresses such as Lori Loughlin and Felicity Huffman, were accused of bribing college officials to admit their children into elite universities; Felicity Huffman, for instance, gave SAT invigilators $15,000 USD to give her daughter extra time on the exam, while another parent offered the women’s soccer coach at Yale received $400,000 to recruit their unqualified daughter to the team.2 This scandal not only painted a grim image of corruption in the U.S. education system, but also provides us with an interesting behavioral question: Why were these college officials willing to risk it all when presented with an illegal bribe?
Of course, this scandal was just one specific and well-known example of corruption. It is not uncommon these days to hear news of corruption in sectors such as government, business, and sport. The willingness to accept bribes and engage in corrupt behavior is something that has occurred throughout history worldwide, with clear detrimental effects on economic growth, inequality, the environment, and more.3 In fact, across the globe an estimated $1.75 trillion USD is exchanged in the form of bribes each year.4 That is an extraordinary amount. To put this number into perspective, this sum is equivalent to the entire nominal GDP of Canada, the tenth-largest economy in the world.5 Clearly, corruption is a topic of global importance and we must try to better understand why people are willing to engage in it in order to reduce it.
However, studying corruption is incredibly difficult for one clear and obvious reason: corruption is illegal. Officials who engage in corruption do so in secret, and as a result, it’s difficult to get accurate data on this phenomenon.
References
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2. Durkin, E. (2019). US college admissions scandal: how did the scheme work and who was charged?. the Guardian. Retrieved 11 December 2020, from https://www.theguardian.com/us-news/2019/mar/12/college-admissions-fraud-scandal-felicity-huffman-lori-loughlin.
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10. Abbink, K., Irlenbusch, B., & Renner, E. (2002). An Experimental Bribery Game. Journal Of Law, Economics, And Organization, 18(2), 428-454. https://doi.org/10.1093/jleo/18.2.428
11. Abbink, K., Irlenbusch, B., & Renner, E. (2002). An Experimental Bribery Game. Journal Of Law, Economics, And Organization, 18(2), 428-454. https://doi.org/10.1093/jleo/18.2.428
12. Identifiable Victim Effect. The Decision Lab. Retrieved 21 December 2020, from https://thedecisionlab.com/biases/identifiable-victim-effect/.
13. Jenni, K., Loewenstein, G. (1997) Explaining the Identifiable Victim Effect. Journal of Risk and Uncertainty 14, 235–257. https://doi.org/10.1023/A:1007740225484
14. Cherry, K. (2020). Extrinsic vs. Intrinsic Motivation: What’s the Difference?. Verywell Mind. Retrieved 11 December 2020, from https://www.verywellmind.com/differences-between-extrinsic-and-intrinsic-motivation-2795384.
15. Abbink, K., Irlenbusch, B., & Renner, E. (2002). An Experimental Bribery Game. Journal Of Law, Economics, And Organization, 18(2), 428-454. https://doi.org/10.1093/jleo/18.2.428
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17. Abbink, K. (2005). Fair salaries and the moral costs of corruption. Proceedings of the Conference on Cognitive Economics, Sofia.
18. Van Veldhuizen, R. (2013). The influence of wages on public officials’ corruptibility: A laboratory investigation. Journal of economic psychology, 39, 341-356.
19. Abbink, K. (2004). Staff rotation as an anti-corruption policy: An experimental study. European Journal of Political Economy, 20, 887–906.
20. Schickora, J. T. (2011a). Bringing the four-eye-principle to the lab. Discussion Paper No. 2011-3. Department of Economics, University of Munich.
21. Framing effect. The Decision Lab. Retrieved 11 December 2020, from https://thedecisionlab.com/biases/framing-effect/.
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23. Barr, A., & Serra, D. (2009). The effects of externalities and framing on bribery in a petty corruption experiment. Experimental Economics, 12(4), 488–503.
24. Graf Lambsdorff, Johann (2015) : Preventing corruption by promoting trust: Insights from behavioral science, Passauer Diskussionspapiere – Volkswirtschaftliche Reihe, No. V-69-15, Universität Passau, Wirtschaftswissenschaftliche Fakultät, Passau
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About the Author
Tony Jiang
Tony Jiang is a Staff Writer at the Decision Lab. He is highly curious about understanding human behavior through the perspectives of economics, psychology, and biology. Through his writing, he aspires to help individuals and organizations better understand the potential that behavioral insights can have. Tony holds an MSc (Distinction) in Behavioral Economics from the University of Nottingham and a BA in Economics from Skidmore College, New York.
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