Petty Corruption: A Game-Theoretic Approach

Ariane Lambert-Mogiliansky, Mukul Majudar and Roy Radner
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Mukul Majudar: Cornell University

Working Papers from Cornell University, Center for Analytic Economics

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.

JEL-codes: C73 D61 D73 O12 O17 (search for similar items in EconPapers)
Date: 2008-12
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Petty corruption: A game‐theoretic approach (2008)
Working Paper: Petty Corruption A Game Theoretic Approach (2008)
Working Paper: Petty Corruption A Game Theoretic Approach (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:corcae:08-09

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