Negotiation Games in the Fight Against Corruption

Carlos Mariano Mosquera
Harvard University – Edmond J. Safra Center for Ethics

June 19, 2014

Edmond J. Safra Working Papers, No. 46

Abstract:

Game theory has allowed the study of the rationality of relationships among actors. This is a strategic relationship where the final outcome depends on the decisions made by each actor. As each player awaits the other player’s decision, the anticipation of the opponent’s move is essential. For game analysis, it is important to view such anticipation as a combination of expectations. When it comes to a negotiation game, the various rules of the game, the means that condition players’ moves and the projection of goals are also important. Likewise, corruption can be also analyzed as an agreement that is reached after a process of negotiation between actors. The objective of this paper is, therefore, to interpret Schelling’s negotiation games as adapted to the problem of corruption.

Five situations are addressed. The first game describes a win-win outcome, as a classic game to reach a corrupt agreement. However, the existence of a number of requirements (based on trust and secrecy) on which an anti-corruption policy could take action is shown. The second and third games introduce the concept of simultaneous games and, in particular, the relation between asymmetrical benefits and risks of corruption for two actors, one that offers the corrupt practice and another that accepts such practice. These simultaneous games include details about the strategies of each actor and, on the other hand, the anti-corruption strategies available for the state, which are based on altering the players’ strategies. The fourth game describes a situation of victimization of corruption. This game focuses on examining how it is possible to withstand corruption through negotiation strategies. Finally, the fifth game introduces the state as one of the actors in the negotiation. This game describes a two-fold negotiation strategy that the state must develop to discourage a corrupt actor.

Negotiation Games in the Fight Against Corruption

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