Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70435
Authors: 
Lambert-Mogiliansky, Ariane
Majumdar, Mukul
Radner, Roy
Year of Publication: 
2008
Series/Report no.: 
CAE Working Paper 08-09
Abstract: 
The paper explores a game-theoreticmodel 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 commonknowledge. 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.
Subjects: 
corruption
repeated games
hold up
extortion
capture
JEL: 
C73
D61
D73
O12
O17
Document Type: 
Working Paper

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