Experimental Economics Seminar for April 24

Events, Seminars | April 20, 2015

Join us for the next ICES Experimental Economics Seminar of the semester, featuring Marie Claire Villeval.

Prof. Villeval, of the University of Lyon, will discuss her paper (co-authored with Salvatore Di Falco, Brice Magdalou, David Masclet and Marc Willinger), Embezzlement: Does Transparency of Information Matter? An Experiment in Tanzania (abstract). The talk will take place on Friday, April 24, from 4:00 to 5:00pm, in room 5075 of the Metropolitan Building, Arlington campus.

Visit the Seminar schedule to access the paper and to learn more about upcoming speakers.

Abstract

Embezzlement is a major concern notably in international aid. With a laboratory experiment, we investigate whether introducing more transparency on donations may help curbing embezzlement by raising the moral cost of dishonesty. Our 3×2 design manipulates both the number of intermediaries in charge of transferring a donation from a sender to a receiver, and the degree of information of the final receiver about the initial donation. We ran our experiment in Tanzania, considered as one of the most corrupted countries in the world according to Transparency International.

We find evidence of embezzlement and we show that the impact of more information transparency is conditional on the organization of the transfer chain. More transparency increases the intermediaries’ moral cost of dishonesty and therefore their honesty, but mainly when the transfer chain is short. When the transfer chain is longer, more transparency disciplines only the final decision-maker. Reducing the number of intermediaries seems to be a more crucial policy instrument to curb embezzlement. This would also have an impact on donors whose generosity decreases in the number of intermediaries but does not increase with more information transparency.

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