Corruption as Betrayal : Experimental Evidence on Corruption Under Delegation

We consider corruption behavior in a three-players game : Principal, Agent, Corrupter. When the Principal chooses a fair wage, the Agent faces con°icting interests to reciprocate. This delegation effect is expected to lower the level of corruption as compared to what arises in two-players settings. We set up two experiments varying in the exogeneity of the delegation relationship. The experimental evidence supports the delegation effect. This, in turn, could account for the deterrence effect of wage on corruption even in the absence of detection.corruption; enforcement; principal-agent relationship; reciprocity

Using or Hiding Private Information ? An Experimental Study of Zero-Sum Repeated Games with Incomplete Information

This paper studies experimentally the value of private information in strictly competitive interactions with asymmetric information. We implement in the laboratory three examples from the class of zero-sum repeated games with incomplete information on one side and perfect monitoring. The stage games share the same simple structure, but differ markedly on how information should be optimally used once they are repeated. Despite the complexity of the optimal strategies, the empirical value of information coincides with the theoretical prediction in most instances. In particular, it is never negative, it decreases with the number of repetitions, and it is nicely bounded below by the value of the infinitely repeated game and above by the value of the one-shot game. Subjects are unable to completely ignore their information when it is optimal to do so, but the use of information in the lab reacts qualitatively well to the type and length of the game being played.Concavification, laboratory experiments, incomplete information, value of information, zero-sum repeated games.

Indiscriminate Discrimination : A correspondence Test for Ethnic Homophily in the Chicago Labor Market

The extent of racial discrimination in the labor market is now clearly identified, but its nature largely remains an open question. This paper reports results from an experiment in which fabricated resumes are sent to help-wanted advertisements in Chicago newpapers. We use three groups of identical resumes : one with Anglo-Saxon names, one with African-American names and one with fictitious foreign names whose ethnic origin is unidentifiable to most Americans. We find that resumes with Anglo-Saxon names generate nearly one half more call-backs than identical resumes with African-American or Foreign names. Resumes with non-Anglo-Saxon names, whether African-American or Foreign, show no statistically significant difference in the number of callbacks they elicit. We also find that discrimination is significantly higher in the Chicago suburbs - where ethnic homogenity is high - as opposed to the city proper. We take this as evidence that discriminatory behavior is part of a larger pattern of unequal treatment of any member of non-majority groups - ethnic homophily.Correspondence testing, racial discrimination.

What drives failure to maximize payoffs in the lab ? A test of the inequality aversion hypothesis

In experiments based on the Beard and Beil (1994) game, second movers very often fail to select the decision that maximizes both players payoff. This note reports on a new experimental treatment, in which we neutralize the potential effect of inequality aversion on the likelihood of this behavior. We show this behavior is robust to this change, even after allowing for repetition-based learning.Coordination failure, laboratory experiments, aversion to inequality.

Learning, words and actions : experimental evidence on coordination-improving information

This paper reports experimental results from a one-shot game with two Nash equilibria: the first one is efficient, the second one relies on weakly dominated strategies. The experimental treatments consider three information-enhancing mechanisms in the game: simple repetition, cheap-talk messages and observation of past actions from the current interaction partner. Our experimental results show the use of dominated strategies is quite widespread. Any kind of information (through learning, words or actions) increases efficiency. As regards coordination, we find that good history performs better than good messages; but bad history performs worse than bad messages.Coordination game, communication, cheap-talk, observation.

Corruption as Betrayal: Experimental Evidence on Corruption Under Delegation

Working Paper du GATE 2005-06We consider corruption behavior in a three-players game : Principal, Agent, Corrupter. When the Principal chooses a fair wage, the Agent faces con°icting interests to reciprocate. This delegation effect is expected to lower the level of corruption as compared to what arises in two-players settings. We set up two experiments varying in the exogeneity of the delegation relationship. The experimental evidence supports the delegation effect. This, in turn, could account for the deterrence effect of wage on corruption even in the absence of detection

Microéconomie de la corruption

Du point de vue de l'analyse économique, la corruption tire ses spécificités de l'imbrication de deux contrats aux objectifs divergents. La corruption est définie comme un accord illégal, ou pacte de corruption, liant un agent à un corrupteur et destiné à organiser le détournement d'un pouvoir discrétionnaire. Ce pouvoir discrétionnaire est hérité, par l'agent, d'un contrat de délégation conclut avec un principal. A partir de cette définition "contractuelle" des situations de corruption, la revue de la littérature proposée ici articule les développements récents de l'analyse microéconomique de la corruption aux propriétés des relations bilatérales entre les joueurs

Marriage with Labor Supply

We propose a search-matching model of the marriage market that extends Shimer and Smith (2000) to allow for labor supply. We characterize the steady-state equilibrium when exogenous divorce is the only source of risk. The estimated matching probabilities that can be derived from the steady-state flow conditions are strongly increasing in both male and female wages. We estimate that the share of marriage surplus appropriated by the man increases with his wage and that the share appropriated by the woman decreases with her wage. We find that leisure is an inferior good for men and a normal good for women.Marriage search model, collective labor supply, structural estimation.

Microéconomie de la corruption

Du point de vue de l'analyse économique, la corruption tire ses spécificités de l'imbrication de deux contrats aux objectifs divergents. La corruption est définie comme un accord illégal, ou pacte de corruption, liant un agent à un corrupteur et destiné à organiser le détournement d'un pouvoir discrétionnaire. Ce pouvoir discrétionnaire est hérité, par l'agent, d'un contrat de délégation conclut avec un principal. A partir de cette définition "contractuelle" des situations de corruption, la revue de la littérature proposée ici articule les développements récents de l'analyse microéconomique de la corruption aux propriétés des relations bilatérales entre les joueurs.Corruption

Policy Analysis in the Health-Services Market: Accounting for Quality and Quantity

We provide a theoretical and empirical framework for evaluating the effects of policy reforms on physician labor supply. We argue that any policy evaluation must account for both the quality and the quantity of services provided. The introduction of quality into the analysis has implications for both the theoretical and empirical analysis of labor supply, and consequently policy evaluation. In particular, endogenous quality choices introduce non-linearities into the budget constraint since the marginal return to an hour of work depends on the quality of services provided. We illustrate by considering a particular example: the recent reform in compensation contracts for specialist physicians in the province of Quebec (Canada). Prior to 1999, most Quebec specialist physicians were paid fee-for-service contracts; they received a piece rate for each clinical service provided. In 1999, the government introduced a mixed remuneration system, under which physicians received a base (half-daily or daily) wage, independent of services provided, and a reduced fee-for-service. Moreover, the government allowed physicians to choose their contract. We derive theoretical results for the effect of the reform on the quantity and quality of services supplied by analyzing "local" prices and virtual income. We propose discretizing the choice set as an empirical approach to policy evaluation in the presence of non-linear budget constraints.Health production, Quality of health services, Discretized models