Auctions and the Dynamics of Corruption
Organizations require discretionary decision making to be delegated and to be under only partial scrutiny from supervisors. This introduces the possibility for agents to use their discretionary power to their own advantage and in detriment to the organization. We model this situation by considering an agent who is supposed to employ a prespecified value function in order to evaluate offers in a procurement process in which the quality of the product or service being offered matters as well as its price.
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