Can asymmetric punishment deter endogenous bribery

Abstract This paper studies the effects of asymmetric punishment bribery on both and compliance with regulations. The bribe amount is decided via Nash bargaining regulatory whistle‐blowing are strategic decisions. Moreover, investigations noncompliance occur in a manner that may be interdependent. We show that, under symmetric punishment, inducing has no effect frequency bribery. When independent, switch from to either makes difference or induces more nonharassment Only when detection increases chance leads for types entrepreneurs, can shift succeed reducing noncompliance. result robust case where legalization bribe‐giving not feasible bribes.