Petty Corruption A Game Theoretic Approach

Abstract : The paper explores a game-theoretic model of petty corruption involving a sequence of entrepreneurs and a track of bureaucrats. Each entrepreneur's project is approved if and only if it is cleared by each bureaucrat. The project value is stochastic; its value is observed only by the entrepreneur, but its distribution is common knowledge. Each bureaucrat clears the project only if a bribe is paid. The bribe for qualified projects ("extortion") and unqualified projects ("capture") may differ. We identify the nature and welfare implications of different types of equilibria under appropriate technical assumptions on the structure of the game.
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Submitted on : Tuesday, November 20, 2012 - 8:53:10 AM
Last modification on : Wednesday, August 14, 2019 - 10:46:03 AM

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Ariane Lambert-Mogiliansky, Mukul Majumdar, Roy Radner. Petty Corruption A Game Theoretic Approach. International Journal of Economic Theory, Wiley, 2008, 4 (2), pp.273-297. ⟨10.1111/j.1742-7363.2008.00078.x⟩. ⟨halshs-00754288⟩

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