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Bribery and public procurement: an experimental study

  • Susanne Büchner

    ()

  • Andreas Freytag

    ()

  • Luis González

    ()

  • Werner Güth

    ()

A procurement contract is granted by a bureaucrat (the auctioneer) who is interested in a low price and a bribe from the provider. The optimal bids and bribes are derived based on an iid private cost assumption. In the experiment, bribes are negatively framed (betweensubjects treatment) to capture that society is better off if bribes are rare or low. Although bids are lower than predicted, behavior is qualitatively in line with the linear equilibrium prediction. When bribes generate a negative externality, there is a significant increase in the variability of the data.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s11127-008-9315-9
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Article provided by Springer in its journal Public Choice.

Volume (Year): 137 (2008)
Issue (Month): 1 (October)
Pages: 103-117

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Handle: RePEc:kap:pubcho:v:137:y:2008:i:1:p:103-117
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100332

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  1. Beck, Paul J. & Maher, Michael W., 1986. "A comparison of bribery and bidding in thin markets," Economics Letters, Elsevier, vol. 20(1), pages 1-5.
  2. Celentani, Marco & Ganuza, Juan-Jose, 2002. "Corruption and competition in procurement," European Economic Review, Elsevier, vol. 46(7), pages 1273-1303, July.
  3. Gökhan R. Karahan & Laura Razzolini & William F. Shughart II, 2002. "Centralized versus decentralized decision-making in a county government setting," Economics of Governance, Springer, vol. 3(2), pages 101-115, 07.
  4. Yvan Lengwiler & Elmar G. Wolfstetter, 2000. "Auctions and Corruption," CESifo Working Paper Series 401, CESifo Group Munich.
  5. Klaus Abbink, 2006. "Laboratory experiments on corruption," Monash Economics Working Papers archive-38, Monash University, Department of Economics.
  6. Mark Duggan & Steven D. Levitt, 2000. "Winning Isn't Everything: Corruption in Sumo Wrestling," NBER Working Papers 7798, National Bureau of Economic Research, Inc.
  7. Lien, Da-Hsiang Donald, 1986. "A note on competitive bribery games," Economics Letters, Elsevier, vol. 22(4), pages 337-341.
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