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The role of intermediaries in corruption

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  • Güzin Bayar

Abstract

The aim of the article is to examine a briber initiated corrupt transaction and the role of intermediaries in such a transaction, using a game theoretical model. Clients applying the intermediaries do so to be able to get rid of high red tape applied by the officers. They prefer using intermediary instead of offering a bribe to the officers directly since they do not know which officers are corrupt (accepts a bribe offer) and how much bribe should be given to the corrupt officers. In our model, the client wants to offer a bribe to get rid of red tape, however, she hesitates due to the possibility of offering a bribe to an honest public officer and as a result getting a penalty. Client also hesitates due to the possibility of offering an amount of bribe lower than the reservation price of the corrupt officer; thus being rejected. Intermediaries, knowing which officers are corrupt and the reservation prices of those corrupt officers, decrease the risk of offering a bribe. Two cases; one with intermediary, the other without, in such a scenario is examined and the results of the two are compared. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Güzin Bayar, 2005. "The role of intermediaries in corruption," Public Choice, Springer, vol. 122(3), pages 277-298, March.
    • Handle: RePEc:kap:pubcho:v:122:y:2005:i:3:p:277-298
    DOI: 10.1007/s11127-005-5916-8
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    References listed on IDEAS

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    Cited by:

    1. Ariane Lambert-Mogiliansky & Mukul Majumdar & Roy Radner, 2009. "Strategic analysis of petty corruption with an intermediary," Review of Economic Design, Springer;Society for Economic Design, vol. 13(1), pages 45-57, April.
    2. Celik, Gorkem & Sayan, Serdar, 2005. "To Give In or Not To Give In To Bribery? Setting the Optimal Fines for Violations of Rules when the Enforcers are Likely to Ask for Bribes," Microeconomics.ca working papers celik-05-08-03-12-50-26, Vancouver School of Economics, revised 06 Aug 2008.
    3. Gorkem Celik & Serdar Sayan, 2008. "On the optimality of nonmaximal fines in the presence of corruptible law enforcers," Review of Economic Design, Springer;Society for Economic Design, vol. 12(3), pages 209-227, September.
    4. Malay Biswas, 2017. "Are They Efficient in the Middle? Using Propensity Score Estimation for Modeling Middlemen in Indian Corporate Corruption," Journal of Business Ethics, Springer, vol. 141(3), pages 563-586, March.
    5. Hasker, Kevin & Okten, Cagla, 2008. "Intermediaries and corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 103-115, July.
    6. Hu, Lin & Oak, Mandar, 2023. "Intermediated corruption under asymmetric punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 215(C), pages 490-499.
    7. Oana Borcan & Nikita Grabher-Meyer & Stephanie Heger & Amrish Patel, 2023. "Right in the Middle: A Field Experiment On The Role Of Integrity Training And Norms In Combating Corruption," University of East Anglia School of Economics Working Paper Series 2023-05, School of Economics, University of East Anglia, Norwich, UK..
    8. Ajit Mishra & Andrew Samuel, 2013. "Corruption and Hold-Up: The Role of Intermediaries," Department of Economics Working Papers 12/13, University of Bath, Department of Economics.

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