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On Effective Fine Functions for Inspection—Corruption Games (Evolutionary Approach)

Author

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  • Vassili N. Kolokoltsov

    (Faculty of Computation Mathematics and Cybernetics, Moscow State University, 119991 Moscow, Russia
    Higher School of Economics, University in Moscow, 109028 Moscow, Russia)

  • Dmitri V. Vetchinnikov

    (Higher School of Economics, University in Moscow, 109028 Moscow, Russia)

Abstract

In previous papers of the authors, a generalized evolutionary approach was developed for the analysis of popular inspection and corruption games. Namely, a two-level hierarchy was studied, where a local inspector I of a pool of agents (that may break the law) can be corrupted and is further controlled by the higher authority A . Here, we extend this two-level modeling by answering the following questions: (i) what levels of illegal profit r of violators and what level of bribes α (fraction of illegal profit asked as a bribe from a violator) of an inspector are feasible, that is, realizable in stable equilibria of generalized replicator dynamics; and (ii) what α can be optimal for a corrupted inspector that aims at maximizing the total profit. Concrete settings that we have in mind are illegal logging, the sales of products with substandard quality, and tax evasion.

Suggested Citation

  • Vassili N. Kolokoltsov & Dmitri V. Vetchinnikov, 2023. "On Effective Fine Functions for Inspection—Corruption Games (Evolutionary Approach)," Mathematics, MDPI, vol. 11(15), pages 1-11, August.
    • Handle: RePEc:gam:jmathe:v:11:y:2023:i:15:p:3429-:d:1211908
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    References listed on IDEAS

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    1. Vassili Kolokoltsov, 2017. "The Evolutionary Game of Pressure (or Interference), Resistance and Collaboration," Mathematics of Operations Research, INFORMS, vol. 42(4), pages 915-944, November.
    2. Mishra, Ajit, 2006. "Persistence of corruption: some theoretical perspectives," World Development, Elsevier, vol. 34(2), pages 349-358, February.
    3. Leonid Hurwicz, 2008. "But Who Will Guard the Guardians?," American Economic Review, American Economic Association, vol. 98(3), pages 577-585, June.
    4. Arvind K. Jain, 2001. "Corruption: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 15(1), pages 71-121, February.
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