Does Social Capital Induce Corruption: Based on Experimental Economics

Based on a laboratory experiment, this paper studies the influence of social capital on corruption. We measure social capital through trust level and introduce moral costs and group differences to explore the mechanism of suppressing corruption. The experiment includes two parts: trust trigger and bribery game. The experiment of trust trigger is used for triggering different trust level, and the experiment of bribery game is used for measuring the extent of corruption. Implemented by negative externality and grouping respectively, we introduce moral cost and group difference into bribery game. Results show that the increasing of trust level could deepen the extent of corruption. The effect of moral cost and group difference in deterring corruption is significant under low trust level; however, the deterrence of moral cost and group difference is offset by high trust level. Furthermore, grouping is more effective for deterring firm's corrupt behavior, and negative externality is more effective for deterring official's corrupt behavior.