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11 December 2023 - Andrew Clausen


Andrew Clausen



Deterring bribery with Scotch Hold'em Poker



Corruption requires a coalition to form and reach an agreement. Is there a cheap way to stop any agreement from being reached? We find an optimal mechanism that resembles poker. The players’ hands are synthetic asymmetric information, and they create a "lemons" problem in the market for bribes. Our poker mechanism is robust: it thwarts bribes regardless of the negotiation procedure, including alternating offers bargaining, Dutch auctions, arbitration, and so on. Our mechanism’s cost is inversely proportional to the number of players. So when we embed our mechanism in regulatory approval and regulatory compliance settings, we find that it is optimal to hire competing auditors to each case.



I am a senior lecturer in the School of Economics at the University of Edinburgh.  My research is about designing institutions that are resilient to fraud and corruption.  Long ago, I began a PhD in cryptography about designing institutions by combining secure multi-party computation with incentives.  I switched to economics to focus on incentives.