The Corporate Legality Game A Lab Experiment on the Impact of Policies, Frames and Information

Leonardo Becchetti, Vittorio Pelligra and Fiammetta Rossetti

No 722267, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: A company that pursues illicit practices may crowd out competitors that behave legally eroding the public good of legality and integrity. Recently born institutional legality ratings tackle this problem. Redistributive policy actions aimed to tax “defectors” (i.e. buyers of unrated products) in favor of “co-operators” (i.e. buyers of “legality-rated” products) may further enforce legality, and fight corruption. We analyze the impact of the legality-rating frame by means of a randomized experiment. Our findings document that redistribution mechanisms, the legality frame and the conformity information design contribute to alleviate the prisoner’s dilemma and generate significant deviations from the Nash Equilibrium.

Keywords: Corruption; Laboratory Experiment; Redistribution; Conformity (search for similar items in EconPapers)
Pages: 52
Date: 2023-07-12
New Economics Papers: this item is included in nep-exp and nep-gth
Note: paper number MSI_2305
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Published in FEB Research Report MSI_2305, pages 1-52

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https://lirias.kuleuven.be/retrieve/719437 Published version (application/pdf)

Related works:
Working Paper: The Corporate Legality Game A Lab Experiment on The Impact of Policies, Frames and Information (2016)
Working Paper: The Corporate Legality Game. A Lab Experiment on The Impact of Policies, Frames and Information (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:msiper:722267

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