On the Dynamics and Effects of Corruption on Environmental Protection

Elvio Accinelli, Laura Policardo and Edgar J. Sánchez Carrera ()
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Edgar J. Sánchez Carrera: Facultad de Economía, Universidad Autónoma de San Luis Potosí. México; Department of Economics, University of Siena, Italy.

No 1312, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: This paper studies the joint dynamics of corruption and pollution in a model of evolutionary game theory, where firms face a given pollution standard and the government must check the compliance to this standard by means of public officials who can be honest or not. A novelty of our paper is that officials decide to be honest or not by imitation, while firms are assumed to be inter-temporal profit maximizers. One of the main findings of the paper is that one possible “ bad” outcome characterised by a whole society of polluting firms and corrupt officers can be sustained by rational agents who learn by imitation, despite the existence of multiplicity of equilibria of a perfectly honest population and a more realistic simultaneous presence of honest and dishonest agents. Furthermore, we show that the firm’s discount rate is an important decision factor that influences the environmental pollution.

Keywords: Bribes and corruption; Environmental quality restrictions; Games and Economics; Imitation and evolutionary dynamics. (search for similar items in EconPapers)
JEL-codes: C70 C72 D21 K42 L21 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2012-09
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ude:wpaper:1312

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