Tolerance for corruption and descriptive social norm: An experimental study of embezzlement

Public tolerance for corruption within a society significantly influences the prevalence of corrupt practices, but less is known about how this tolerance evolves with social norms. This paper presents experimental evidences demonstrating that the descriptive social norm indicating widespread corruption can lead to increased tolerance for corruptive acts. We introduce an asymmetric information ultimatum game to simulate the interactions between embezzlers and citizens. Game theoretical analysis reveals that victims anticipating corruption will exhibit greater compliance with embezzlement when the offers are evaluated based on descriptive norms. To test the hypothesis, we employ a framing effect to induce variations in descriptive norms within a behavioral experiment. Although the treatment effect is significant only in the subgroup of student cadres, this subgroup demonstrated increased beliefs about embezzlement, greater tolerance for corruption, and a heightened propensity to embezzle when exposed to framings with hierarchical implications. This paper contributes to the corruption literature by examining the effects of descriptive norms on victims' responses to embezzlement. It offers a more comprehensive perspective on how social standards shape public opinions and corrupt actions, enhancing our understanding of the self-reinforcing nature of corruption.