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Strategic Analysis of Influence Peddling

Author

Listed:
  • Majumdar, Mukul

    (Cornell University)

  • Yoo, Seung Han

    (Nanyang Technological University)

Abstract

This paper analyzes "Influence Peddling" with interaction between human capital transfer and collusion-building aspects in a model, in which each government official regulates multiple firms simultaneously. We show that (i) there exists an "optimal" division rule for collusion between a sequence of "qualified" regulators and a firm; (ii) as the regulators increasingly benefit from the collusion, they strictly decrease regulation rates for the firm under collusion while strictly increasing regulation rates for a firm not under collusion; and (iii) post-government-employment restrictions are not "effective" policies, and an alternative policy can be suggested.

Suggested Citation

  • Majumdar, Mukul & Yoo, Seung Han, 2011. "Strategic Analysis of Influence Peddling," Working Papers 11-04, Cornell University, Center for Analytic Economics.
    • Handle: RePEc:ecl:corcae:11-04
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    File URL: https://cae.economics.cornell.edu/11.04.pdf
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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