Prevention Mechanism of Business Corruption: Should Be Incentive-oriented or Restraint-oriented?

摘要

Business corruption, which is a kind of collusion between government officials and firms, harms market economy and social welfare. Although the negative effects of corruption are realized, empirical research is hindered by a notorious lack of data. Recruiting 228 undergraduate students as subjects, we use experimental method to investigate on corruption behaviors. We conduct four treatments by using official wage and detection probability as focus variables. The result shows that supervision is the key element of preventing collusion. High probability of detection significantly reduces bribery and corruption, while high wage drives more bribery and reciprocal exchange. Therefore, an effective prevention mechanism of corruption should be restraint-oriented, not incentive-oriented.