Evolutionary Inspection and Corruption Games

Stamatios Katsikas, Vassili Kolokoltsov and Wei Yang
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Stamatios Katsikas: Centre for Complexity Science, University of Warwick, Coventry CV4 7AL, UK
Vassili Kolokoltsov: Department of Statistics, University of Warwick, Coventry CV4 7AL, UK
Wei Yang: Risk Methodology, Santander UK plc, London NW1 3AN, UK

Games, 2016, vol. 7, issue 4, 1-25

Abstract: We extend a standard two-person, non-cooperative, non-zero sum, imperfect inspection game, considering a large population of interacting inspectees and a single inspector. Each inspectee adopts one strategy, within a finite/infinite bounded set of strategies returning increasingly illegal profits, including compliance. The inspectees may periodically update their strategies after randomly inter-comparing the obtained payoffs, setting their collective behaviour subject to evolutionary pressure. The inspector decides, at each update period, the optimum fraction of his/her renewable budget to invest on his/her interference with the inspectees’ collective effect. To deter the inspectees from violating, he/she assigns a fine to each illegal strategy. We formulate the game mathematically, study its dynamics and predict its evolution subject to two key controls, the inspection budget and the punishment fine. Introducing a simple linguistic twist, we also capture the corresponding version of a corruption game.

Keywords: inspection game; corruption game; evolutionary game; non-cooperative game; dynamic game; multiple inspectees; multiple violation levels; inspection budget; punishment fine (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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