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Bribery and Public Procurement - An Experimental Study

Author

Listed:
  • Susanne Büchner

    () (Max-Planck-Institute for Economics)

  • Andreas Freytag

    () (University of Jena, Faculty of Economics)

  • Luis G. Gonzalez

    ()

  • Werner Güth

    () (Max-Planck-Institute for Economics)

Abstract

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.

Suggested Citation

  • Susanne Büchner & Andreas Freytag & Luis G. Gonzalez & Werner Güth, 2006. "Bribery and Public Procurement - An Experimental Study," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 06/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
  • Handle: RePEc:jen:jenasw:2006-06
    as

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    References listed on IDEAS

    as
    1. Lengwiler, Yvan & Wolfstetter, Elmar, 2000. "Auctions and corruption," SFB 373 Discussion Papers 2000,40, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    2. Klaus Abbink, 2006. "Laboratory Experiments on Corruption," Chapters,in: International Handbook on the Economics of Corruption, chapter 14 Edward Elgar Publishing.
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    Citations

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    Cited by:

    1. Christoph Engel, 2016. "Experimental Criminal Law. A Survey of Contributions from Law, Economics and Criminology," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_07, Max Planck Institute for Research on Collective Goods.
    2. Axel Dreher & Lars-H. Siemers, 2009. "The nexus between corruption and capital account restrictions," Public Choice, Springer, vol. 140(1), pages 245-265, July.
    3. Simon Renaud, 2006. "Betriebsr�te und Strukturwandel," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 04/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    4. Giuseppe Albanese & Federico Antellini Russo & Roberto Zampino, 2015. "Crime and public procurement, evidence from municipalities," Questioni di Economia e Finanza (Occasional Papers) 294, Bank of Italy, Economic Research and International Relations Area.
    5. Jens J. Krüger, 2008. "The Sources Of Aggregate Productivity Growth: Us Manufacturing Industries, 1958-1996," Bulletin of Economic Research, Wiley Blackwell, vol. 60(4), pages 405-427, October.
    6. repec:kap:pubcho:v:172:y:2017:i:3:d:10.1007_s11127-017-0452-x is not listed on IDEAS
    7. Jens J. Krüger & Kristina Dreßler, 2006. "Knowledge, Profitability and Exit of German Car Manufacturing Firms," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 15/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    8. Vetter, Stefan, 2012. "Delegation and Rewards," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 378, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    9. Murray, Cameron K. & Frijters, Paul & Vorster, Melissa, 2015. "Give and You Shall Receive: The Emergence of Welfare-Reducing Reciprocity," IZA Discussion Papers 9010, Institute for the Study of Labor (IZA).
    10. Kimbrough, Erik O. & Sheremeta, Roman M., 2013. "Side-payments and the costs of conflict," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 278-286.
    11. Shinya Horie, 2017. "Procurement Auctions with Uncertainty in Corruption," Discussion Papers 1710, Graduate School of Economics, Kobe University.
    12. Erik O. Kimbrough & Roman Sheremeta, 2010. "Make Him an Offer He Can’t Refuse: Avoiding Conflicts through Side Payments," Working Papers 10-23, Chapman University, Economic Science Institute.
    13. Christoph Engel & Sebastian Goerg & Gaoneng Yu, 2012. "Symmetric vs. Asymmetric Punishment Regimes for Bribery," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2012_01, Max Planck Institute for Research on Collective Goods, revised May 2013.
    14. repec:spr:jbecon:v:87:y:2017:i:8:d:10.1007_s11573-017-0846-8 is not listed on IDEAS
    15. Holger Graf & Tobias Henning, 2009. "Public Research in Regional Networks of Innovators: A Comparative Study of Four East German Regions," Regional Studies, Taylor & Francis Journals, vol. 43(10), pages 1349-1368, December.
    16. Vetter, Stefan, 2013. "Delegating decision rights for anticipated rewards as an alternative to corruption: An experiment," European Journal of Political Economy, Elsevier, vol. 31(C), pages 188-204.
    17. Wolfgang Domschke & Armin Scholl, 2006. "Heuristische Verfahren," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 08/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    18. Uwe Cantner & Andreas Meder, 2006. "Determinants influencing the choice of a cooperation partner," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 20/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    19. Armin Scholl & Nils Boysen & Malte Fliedner, 2006. "The sequence-dependent assembly line balancing problem," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 18/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    20. Simon Renaud, 2006. "Works Councils and Heterogeneous Firms," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 16/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    21. Vetter, Stefan, 2012. "Delegation and Rewards," Discussion Papers in Economics 12884, University of Munich, Department of Economics.
    22. Germà Bel & Francisco González-Gómez & Andrés J. Picazo-Tadeo, 2015. "“Political connections, corruption, and privatization of public services: Evidence from contracting out water services in Spain”," IREA Working Papers 201515, University of Barcelona, Research Institute of Applied Economics, revised Jun 2015.
    23. Mikael Priks, 2012. "Competition among officials and the abuse of power," Public Choice, Springer, vol. 150(3), pages 425-438, March.
    24. repec:eee:jeborg:v:142:y:2017:i:c:p:494-508 is not listed on IDEAS
    25. Huang, He & Li, Zhipeng, 2015. "Procurement auctions with ex-ante endogenous bribery," Economic Modelling, Elsevier, vol. 47(C), pages 111-117.

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    Keywords

    Corruption; Procurement Auctions;

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