Anonymous Matching and Group Reputation

We explore what group reputation is and model its formation and evolution. Based solely on group signals, we define a player’s group reputation as the be-lief that others have about the characteristics of the group the player belongs to. A model of group reputation of civil servants is constructed to character-ize the strategic behavior of potential bribers and civil servants. We analyze the possible steady states and their feasible conditions under the anonymous matching and acquaintance matching respectively, as well as the dynamic anal-ysis. Then, we show that the regime change from acquaintance matching to anonymous matching will cause the rampancy of corruption if the supervision effort level is small. Finally, we investigate the effectiveness of anti-corruption policy and show that to turn around a high level of corruption, the level of supervision effort has to reach some minimum level. In addition, the effective-ness of the anti-corruption policy is not monotonic with respect to the level of supervision effort. As there are two types of corruption behavior of civil servants: accepting bribes and dereliction of duty, anti-corruption should work along both lines