A Game Theoretic Model of Struggle with Corruption in Auctions: Computer Simulation

Kirill Kozlov and Guennady Ougolnitsky ()
Additional contact information
Kirill Kozlov: I.I. Vorovich Institute for Mathematics, Mechanics and Computer Science, Southern Federal University, 344000 Rostov-on-Don, Russia
Guennady Ougolnitsky: I.I. Vorovich Institute for Mathematics, Mechanics and Computer Science, Southern Federal University, 344000 Rostov-on-Don, Russia

Mathematics, 2022, vol. 10, issue 19, 1-11

Abstract: There is a great deal of literature devoted to mathematical models of corruption, including corruption in auctions. However, the relationship between the seller and the auctioneer is not studied sufficiently. The research aim is to analyze such relations in a game theoretic setup. We built a difference game theoretic model in normal form that describes possible collusion between an auctioneer and participants of an auction. The auctioneer acts on behalf of a seller. The seller can control possible collusions by administrative and economic mechanisms. The probability of detection depends on audit cost. We consider four cases of absence/presence of the collusion and those of the audit. The model is investigated numerically by simulation modeling using an original method of qualitatively representative scenarios. Several conclusions are made: factors of corruption are low probability of detection, small penalty, and big corruption gain of the auctioneer.

Keywords: auctions; corruption; game theory; games in normal form; simulation modeling (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7390/10/19/3653/pdf (application/pdf)
https://www.mdpi.com/2227-7390/10/19/3653/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jmathe:v:10:y:2022:i:19:p:3653-:d:934314

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().