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Can shorter transfer chains and transparency reduce embezzlement?

Abstract : We study embezzlement when donations have to pass through intermediaries to reach recipients, by means of a sequential game tested in a laboratory experiment conducted in Tanzania. We investigate the impact on the amount embezzled of both the number of intermediaries in transfer chains and transparency about the donation. We show that donors are less generous in the presence of intermediaries. When transfer chains are shorter, aggregate embezzlement decreases, at least when donations are transparent. At the individual level, intermediaries embezzle less, the longer the transfer chain; this is due to less embezzlement at the beginning of the chain. We fail finding significant positive effects of transparency on the honesty of individual transfers through social judgment. JEL Codes: C91, D73, O19
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Submitted on : Tuesday, July 28, 2020 - 2:06:17 PM
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Salvatore Di Falco, Brice Magdalou, David Masclet, Marie Claire Villeval, Marc Willinger. Can shorter transfer chains and transparency reduce embezzlement?. Review of Behavioral Economics, Now Publishers, 2020, 103-143, 7 (2), ⟨10.1561/105.00000119⟩. ⟨hal-02498354⟩

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