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Strategic analysis of petty corruption with an intermediary

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Author Info

  • Ariane Lambert-Mogiliansky
  • Mukul Majumdar
  • Roy Radner

    ()

Abstract

This notes reports part of a larger study of "petty corruption" by government bureaucrats in the process of approving new business projects. Each bureaucrat may demand a bribe as a condition for approval. Entrepreneurs use the services of an intermediary who, for a fee, undertakes to obtain all the required approvals. In a dynamic game model we investigate (1) the multiplicity of equilibria, (2) the equilibria that are "socially efficient", and (3) the equilibria that maximize the total expected bureaucrat's bribe income. We compare these results with those for the case in which entrepreneurs apply directly to the bureaucrats.

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File URL: http://hdl.handle.net/10.1007/s10058-008-0068-1
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Bibliographic Info

Article provided by Springer in its journal Review of Economic Design.

Volume (Year): 13 (2009)
Issue (Month): 1 (April)
Pages: 45-57

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Handle: RePEc:spr:reecde:v:13:y:2009:i:1:p:45-57

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Related research

Keywords: Petty corruption; Intermediaries; Game-theory; C73; D73; O12;

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References

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  1. Lambert-Mogiliansky, Ariane & Majumdar, Mukul & Radner, Roy, 2007. "Strategic analysis of petty corruption: Entrepreneurs and bureaucrats," Journal of Development Economics, Elsevier, vol. 83(2), pages 351-367, July.
  2. Hurwicz, Leonid, 2007. "But Who Will Guard the Guardians?," Nobel Prize in Economics documents 2007-3, Nobel Prize Committee.
  3. Lambsdorff,Johann Graf, 2007. "The Institutional Economics of Corruption and Reform," Cambridge Books, Cambridge University Press, number 9780521872751, November.
  4. Ariane Lambert-Mogiliansky & Mukul Majumdar & Roy Radner, 2008. "Petty corruption: A game-theoretic approach," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(2), pages 273-297.
  5. Güzin Bayar, 2005. "The role of intermediaries in corruption," Public Choice, Springer, vol. 122(3), pages 277-298, March.
  6. Hasker, Kevin & Okten, Cagla, 2008. "Intermediaries and corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 103-115, July.
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Citations

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Cited by:
  1. Frédéric Koessler & Ariane Lambert-Mogiliansky, 2012. "Optimal Extortion and Political Risk Insurance," Working Papers halshs-00672963, HAL.
  2. Frédéric Koessler & Ariane Lambert-Mogiliansky, 2012. "Optimal Extortion and Political Risk Insurance," PSE Working Papers halshs-00672963, HAL.
  3. Graf Lambsdorff, Johann, 2010. "Deterrence and constrained enforcement: Alternative regimes to deal with bribery," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-60-10, University of Passau, Faculty of Business and Economics.
  4. Gautam Bose, 2010. "Aspects of Bureaucratic Corruption," Discussion Papers 2010-14, School of Economics, The University of New South Wales.

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