 Can paying politicians well reduce corruption? The effects of wages and uncertainty on electoral competitionTom-Reiel Heggedal, Leif Helland and Rebecca Morton Games and Economic Behavior, 2022, vol. 135, issue C, 60-73 Abstract: We investigate the effects of wages and uncertainty on political corruption as measured by rent-taking. First, our laboratory data show that contrary to standard theory, rent-taking is not independent of, but decreases with wages in the absence of popularity shocks. Second, the orthodox view that rent-taking is greater in the presence of popularity shocks, given wages, is not necessarily true. Third, we find that in the presence of popularity or ideological shocks rent-taking is increasing in the variance of the shock for given wages, and is decreasing in wages for a given variance of the shock. While our third finding is in line with the directional predictions of the Nash equilibria, the deviation from Nash is large when the variance of the popularity shock is high and wages are low. We show that the deviations can be explained using a Quantal Response Equilibrium approach and taking risk-attitudes into account. Keywords: Electoral competition; Laboratory experiment; Political rents (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:135:y:2022:i:c:p:60-73 DOI: 10.1016/j.geb.2022.05.008 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
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