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Strategic analysis of petty corruption with an intermediary

  • Ariane Lambert-Mogiliansky

    (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - CNRS - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC))

  • Mukul Majumdar

    (Economics Department - Cornell University - Cornell University)

  • Radner Roy

    (Stern School of Business - New York University [New York])

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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Paper provided by HAL in its series PSE Working Papers with number halshs-00587715.

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Date of creation: Jul 2007
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Handle: RePEc:hal:psewpa:halshs-00587715
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  1. Lambsdorff,Johann Graf, 2007. "The Institutional Economics of Corruption and Reform," Cambridge Books, Cambridge University Press, number 9780521872751.
  2. Roy Radner & Ariane Lambert-Mogiliansky & Makul Majumdar, 2004. "Strategic Analysis of Petty Corruption: Entrepreneurs and Bureaucrats," Working Papers 04-22, New York University, Leonard N. Stern School of Business, Department of Economics.
  3. Lambert-Mogiliansky, Ariane & Majudar, Mukul & Radner, Roy, 2008. "Petty Corruption: A Game-Theoretic Approach," Working Papers 08-09, Cornell University, Center for Analytic Economics.
  4. Leonid Hurwicz, 2008. "But Who Will Guard the Guardians?," American Economic Review, American Economic Association, vol. 98(3), pages 577-85, June.
  5. Hasker, Kevin & Okten, Cagla, 2008. "Intermediaries and corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 103-115, July.
  6. Güzin Bayar, 2005. "The role of intermediaries in corruption," Public Choice, Springer, vol. 122(3), pages 277-298, March.
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