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The Virtuous Circle of Distrust: A Mechanism to Deter Bribes and Other Cooperative Crimes

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  • Cooter, Robert
  • Garoupa, Nuno

Abstract

Some crimes involve the cooperation of two or more criminals for mutual gain. Instead of deterring these crimes, the state can prevent them by creating distrust among criminals. The state should offer amnesty and a bounty to the criminal who first secures punishment of the other participant in a cooperative crime. We especially focus on bribes, which occur when someone pays an agent to violate a duty owed to the principal. To prevent bribes, the principal offers amnesty and a bounty to the debtor or agent who secures the other party’s punishment. Under certain conditions, the game’s equilibrium changes from cooperation to non-cooperation (prisoner’s dilemma), so bribes disappear.

Suggested Citation

  • Cooter, Robert & Garoupa, Nuno, 2000. "The Virtuous Circle of Distrust: A Mechanism to Deter Bribes and Other Cooperative Crimes," Berkeley Olin Program in Law & Economics, Working Paper Series qt83c0k3wc, Berkeley Olin Program in Law & Economics.
    • Handle: RePEc:cdl:oplwec:qt83c0k3wc
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    2. Bryane Michael (Linacre College), "undated". "Drafting Implementing Regulations for International Anti-Corruption Conventions," QEH Working Papers qehwps150, Queen Elizabeth House, University of Oxford.
    3. Qianwei Ying & Guangnan Zhang, 2008. "Fragmentation of licensing right, bargaining and the tragedy of the anti-commons," European Journal of Law and Economics, Springer, vol. 26(1), pages 61-73, August.
    4. Ogus, Anthony, 2005. "Towards Appropriate Institutional Arrangements for Regulation in Less Developed Countries," Centre on Regulation and Competition (CRC) Working papers 30644, University of Manchester, Institute for Development Policy and Management (IDPM).
    5. Bugarin, M. B., 2007. "Benefit Sharing: An Incentive Mechanism for Social Control of Government Expenditure," Insper Working Papers wpe_77, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    6. Yadlin Omri, 2006. "The Conspirator Dilemma: Introducing the "Trojan Horse" Enforcement Strategy," Review of Law & Economics, De Gruyter, vol. 2(1), pages 25-43, May.
    7. Nicolas Jacquemet, 2005. "La corruption comme une imbrication de contrats : Une revue de la littérature microéconomique," Working Papers 2005-29, Center for Research in Economics and Statistics.

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