标题：Fishy Gifts: Bribing with Shame and Guilt

汇报人：David Ong(HSBC)

功夫：4:00-5:30pm, September 28

地址：拉斯维加斯9888新楼216教室

Abstract:

Gifts are often used where the institutions of contracting do not exist, or are underdeveloped, as in emerging markets, or otherwise unenforceable, as with illicit transactions in developed markets. Studies of guilt based reciprocity have shown how receiversbeliefs’about senders beliefs’alone can influence reciprocation of a gift in one shot situations, even when reciprocation was unobservable, and hence, unenforceable. Studiesof shame based reciprocity have shown how the mere anticipation of being possibly observed not reciprocating by a passive audience can increase reciprocation. But, to myknowledge, there is no study of how the shame of accepting a gift may interact withthe guilt of not reciprocating. In the following psychological game with incompleteinformation, I show that if recipients are heterogeneously shame and guilt averse, thebeliefs implied by a gift can induce a self-fulfilling reputation through their interaction.In particular, I show how a bribing firm, by varying the saliency of the expectation forreciprocation, through cheap talk announcements, or by varying the value of the gift,can induce non-reciprocating recipients to reject and thus, reduce costs. In cases whenthe shame of accepting a possible bribe is too great, I show how the same actions caninvite free-riders to accept, and thus, reduce the shame of those who would reciprocateinto accepting. The model was inspired by the gift giving practices of pharmaceutical firms to doctors. I explain a perverse consequence of current policies to preventreciprocation, and why the most obvious solution, a ban on gifts, has been adoptedonly by a handful of hospitals. I discuss implications for professional services wherereciprocation is a credence good and hence, also unobservable.