Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142364
Authors: 
Di Falco, Salvatore
Magdalou, Brice
Masclet, David
Villeval, Marie Claire
Willinger, Marc
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9925
Abstract: 
Embezzlement is a major concern in various settings. By means of a sequential modified dictator game, we investigate theoretically and experimentally whether making information more transparent and reducing the number of intermediaries in transfer chains can reduce embezzlement and improve the recipients' welfare. Consistent with reference-dependent preferences in terms of moral ideal, we show that the impact of transparency is conditional on the length of the transfer chain and on the position of the intermediaries in the chain. Its direct effect on image encourages honesty. Its indirect effect via expectations plays in the opposite direction, motivating individuals to embezzle more when they expect that the following intermediary will embezzle less. Senders react positively to a reduction of the length of the chain but negatively to transparency.
Subjects: 
embezzlement
corruption
dishonesty
transparency
experiment
JEL: 
C91
D83
Document Type: 
Working Paper

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