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A Market for Connections

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  • Topi Miettinen
  • Panu Poutvaara

    ()

Abstract

Government or company decisions on whom to hire are mostly delegated to politicians, public sector officials or human resources and procurement managers. Due to anti-corruption laws, agents cannot sell contracts or positions that they are delegated to decide upon. Even if bribing is ruled out, those interested in the spoils may invest in a good relationship with the deciding agents in order to be remembered when the nomination is made. In this paper, we analyze such markets for connections in the presence of convex costs of networking.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3810.

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Date of creation: 2012
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Handle: RePEc:ces:ceswps:_3810

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Related research

Keywords: nominations; rent-seeking; networks; politicians; procurement;

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  1. Prat, A. & Rustichini, A., 1999. "Games Played Through Agents," Discussion Paper 1999-68, Tilburg University, Center for Economic Research.
  2. Leonardo Felli & Antonio Merlo, 2003. "Endogenous Lobbying," STICERD - Theoretical Economics Paper Series 448, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  3. Rochet, Jean-Charles & Tirole, Jean, 2003. "Platform Competition in Two-Sided Markets," IDEI Working Papers 152, Institut d'Économie Industrielle (IDEI), Toulouse.
  4. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
  5. Matthew O. Jackson & Asher Wolinsky, 1995. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. McBride Michael, 2006. "Limited Observation in Mutual Consent Networks," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-29, August.
  7. repec:ags:afjare:141665 is not listed on IDEAS
  8. Roger B. Myerson & Daniel Diermeier, 1999. "Bicameralism and Its Consequences for the Internal Organization of Legislatures," American Economic Review, American Economic Association, vol. 89(5), pages 1182-1196, December.
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