Petty Corruption A Game Theoretic Approach
Journal article: The paper explores a game-theoretic model of petty corruption involving a sequence of entrepreneurs and a track of bureaucrats. Each entrepreneur's project is approved if and only if it is cleared by each bureaucrat. The project value is stochastic; its value is observed only by the entrepreneur, but its distribution is common knowledge. Each bureaucrat clears the project only if a bribe is paid. The bribe for qualified projects ("extortion") and unqualified projects ("capture") may differ. We identify the nature and welfare implications of different types of equilibria under appropriate technical assumptions on the structure of the game.
Author(s)
Ariane Lambert-Mogiliansky, Mukul Majumdar, Roy Radner
Journal
- International Journal of Economic Theory
Date of publication
- 2008
Keywords JEL
Keywords
- Corruption
- Repeated games
- Hold up
- Extortion
- Capture
Pages
- 273-297
URL of the HAL notice
Version
- 1
Volume
- 4