Punishment and corruption

Punishment is one of the main methods for preventing corruption. However, studies on the effect of size and probability of punishment on bribe-taking have not yielded conclusive results. We introduce a punishment by a fine or termination of the task, both with varying probabilities, in a laboratory task modeling the decision to take a bribe. The punishment decreased the probability of taking higher bribes, even though the probability of taking lower bribes was unaffected. Participants took fewer bribes when the fine was larger and more probable. We did not observe any clear negative effects of small punishment crowding out intrinsic motivation to behave honestly. However, we found that effects of punishment differ based on emotionality and honesty-humility of participants. The study shows that the prospect of punishment may deter dishonest behavior; however, personality characteristics should be taken into account when devising an effective deterrence policy.