Experimental Design
The experiment design mirrors the study Cameron et al. (2009). In the lab experiment, there will be three players per group playing a one-shot sequential game that focuses on bribery, a common occurrence of corruption. These groups will be divided between welfare-enhancing and welfare-reducing payoffs.The game starts with Player 1 who acts as a firm. They can choose to offer a bribe or not offer a bribe. If they choose to not offer a bribe, the game ends. If they choose to offer a bribe, they can pick the amount B ∈ [4, 8]. Once a bribe is offered, they will incur a cost of a transfer fee of 2. Next, Player 2 who acts as a public official can choose to accept or reject the bribe. If the bribe is accepted, the earnings of Players 1 and 2 will increase by 3B and the earnings of Player 3 will decrease by B. If the bribe is rejected, the game is instantly over. Finally, Player 3 who acts as a citizen can choose to punish or not punish Players 1
and 2. If they choose to punish, they can pick the punishment amount P ∈ [2, 12]. P will be deducted from the earnings of Player 3 and the amount 3P will be deducted from the earnings of Players 1 and 2. If Player 3 chooses to not punish the other players, the game
will be over.Once all the decisions have been made, the payoffs are calculated. If this group receives
welfare-enhancing payoffs, the payoffs are the following: •Firm: 3B − 2 − 3P • Public Official: 3B − 3P • Citizen: −B − P
If this group receives welfare-reducing payoffs, the payoffs are the following: • Firm: 3B − 2 − 3P • Public Official: 3B − 3P • Citizen: −7B − P
We conduct the experiment in the Economic Science Laboratory (ESL) at the University of Arizona. Participants will be recruited through email and will consist of undergraduate students. We expect to have 21 or 30 participants per session. Since three participants are required per game, we will ensure that the number of participants per session is a multiple of three. After reading and signing the consent form, the participants will receive the instructions of the experiment both written and verbally. Then, they will fill out a demographic survey on their computer that asks the following: if they have participated in an ESL experiment before, class standing, age, gender, and nationality. Once the survey is completed, groups will be randomly assigned either welfare-enhancing or welfare-reducing payoffs. After the treatment, the aforementioned bribery game will be played. The participants will be made aware of their payoffs, the effects of their decision, and the payoffs of others. Once the game is completed, the participants will fill out a survey asking the motives behind their decisions in the game. After this survey is completed, participants can collect their earnings from the game.