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Title:Bringing the Four-Eyes-Principle to the Lab PDF Logo
Authors:Schikora, Jan
Issue Date:2010
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Experimental Tests of Theories and Institutions D13-V2
Abstract:The `Four-Eyes-Principle' (4EP) (business has to be conducted by at least two individuals, hence four eyes) is seen as one of the most potent measures against corruption although it lacks any theoretical or empirical justification. We show in a laboratory experiment that the net effect of the introduction of the 4EP is negative. This result is in contrast to theoretical predictions of a transaction between a firm and a potentially corrupt official, derived in a simple standard model. Combining data of choices with the results of a content analysis of exchanged chat messages we further show that the individual profit maximizing motive dominates in the group decision making process even though there is a trade-off with social efficiency. Against existing policy recommendations, the results of our experiment cast doubt on the usefulness of the introduction of the 4EP.
Subjects:Corruption
Laboratory Experiments
Group Decision Making
JEL:C92
C72
D73
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie

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