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Accessible Unlicensed Requires Authentication Published by De Gruyter September 20, 2014

A Disruption Mechanism for Bribes

Robert D. Cooter and Nuno Garoupa
From the journal Review of Law & Economics

Abstract

Crimes such as bribery require the cooperation of two or more criminals for mutual gain. Instead of deterring these crimes, the state should disrupt them by creating distrust among criminals so they cannot cooperate. In a cooperative crime with two criminals, the state should offer amnesty and a bounty to the criminal who first secures punishment of the other criminal. When the bounty exceeds the bribe, a bribed official gains less from keeping the bribe than from confessing and receiving the bounty. Consequently the person who pays the bribe cannot trust the person who takes it. The game’s unique equilibrium is non-cooperative and bribes disappear. We explore legal implications and practical challenges to this disruption mechanism.

Keywords: bribes; corruption; crime

Acknowledgments

We are grateful to one anonymous referee, Fernando Gómez-Pomar, Neal Katyal, Louis Kaplow, Mitch Polinsky, Eric Rasmusen, Chris Sanchirico, Hans-Bernd Schäfer, Steven Shavell, and seminar participants at Hamburg, Harvard, Stanford, UC Berkeley and Virginia Law Schools, the 17th annual meeting of the European Association of Law and Economics, and the 11th annual meeting of the American Law and Economics Association for helpful suggestions and comments on early versions of this article. Caroline Belloff has provided excellent research assistance.

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Published Online: 2014-9-20
Published in Print: 2014-11-1

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