Theorem 4 pertains to a model in which only one kind of dishonest behavior by the LM is possible. The problem of discouraging other kinds of dishonest behavior may require other strategies. From our preliminary analysis, it appears that the most difficult problem is to deter the LM from soliciting or accepting bribes from traders who have an unpaid judgment but wish to conceal that fact. By concealing the judgment, cheating. and refusing to pay the new judgment, the trader could “earn” Q - Q and a portion of that might be offered as a bribe to the LM. As we add richness to the possibilities for cheating, it is natural to expect that the necessary institutions and strategies must respond in a correspondingly rich way.

QUESTION: The suggestion that bribery is the hardest form of dishonesty to deter is underexplored here — worth investigating what makes bribery structurally resistant to institutional fixes. Builds on: "Institutions must solve the second-order problem of motivating punishment participation."

PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE O…, loc. 161