Petty Corruption A Game Theoretic Approach

Ariane Lambert-Mogiliansky (), Mukul Majumdar and Roy Radner
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Ariane Lambert-Mogiliansky: PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Mukul Majumdar: Cornell University [New York]

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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.

Keywords: Corruption; Repeated games; Hold up; Extortion; Capture (search for similar items in EconPapers)
Date: 2008-05
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Citations: View citations in EconPapers (10)

Published in International Journal of Economic Theory, 2008, 4 (2), pp.273-297. ⟨10.1111/j.1742-7363.2008.00078.x⟩

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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:hal:pseptp:halshs-00754288

DOI: 10.1111/j.1742-7363.2008.00078.x

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