We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Pre-emptive Corruption, Hold-up and Repeated Interactions.
- Authors
Dechenaux, Emmanuel; Samuel, Andrew
- Abstract
This paper analyses repeated interactions between a firm and an inspector who monitors regulatory compliance. The firm may offer a bribe to pre-empt the inspection. Corruption is unfeasible in the one-shot game because of inspector hold-up. In an infinitely repeated game, we characterize the set of bribes that can be sustained as equilibrium paths using the trigger strategy. In this model, the most likely bribe-givers are not the firms that benefit the most from the illegal behaviour. Furthermore, strengthening anti-corruption policies has ambiguous welfare effects because it improves compliance only among a subset of firms, and increases monitoring effort.
- Subjects
CORRUPTION; REGULATORY compliance; BRIBERY; COMMERCIAL policy; GAME theory
- Publication
Economica, 2012, Vol 79, Issue 314, p258
- ISSN
0013-0427
- Publication type
Article
- DOI
10.1111/j.1468-0335.2011.00898.x