Strategic analysis of petty corruption with an intermediary

Ariane Lambert-Mogiliansky (), Mukul Majumdar and Roy Radner

PSE Working Papers from PSE (Ecole normale supérieure)

Abstract: 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.

New Economics Papers: this item is included in nep-cse, nep-ent and nep-ppm
Date: 2007
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Persistent link: http://EconPapers.repec.org/RePEc:pse:psecon:2007-38

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