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How corruptible are you? Bribery under uncertainty

Author

Listed:
  • Dmitry Ryvkin

    (Department of Economics, Florida State University)

  • Danila Serra

    (Department of Economics, Florida State University)

Abstract

We model corruption in a society as a result of bargaining for bribes between private citizens and public officials. We investigate the role that incomplete information with respect to the intrinsic moral cost of one's potential corruption partner plays out in his or her propensity to engage in bribery, and, consequently, the equilibrium level of corruption in the society. We assume that the cost of engaging in corruption is subject to strategic complementarities, which may lead to multiple corruption equilibria. We find that corruption is lowest when potential bribers and potential bribees are uncertain regarding each other's "corruptibility" and have asymmetric bargaining powers. Our uncertainty result provides theoretical support in favor of anti-corruption strategies, such as staff rotation in public offices, aimed at decreasing the social closeness of bribers and bribees. Our bargaining power result suggests that, under uncertainty, monopolistic public good provision has the same corruption-reducing effect as competitive public good provision.

Suggested Citation

  • Dmitry Ryvkin & Danila Serra, 2010. "How corruptible are you? Bribery under uncertainty," Working Papers wp2010_09_01, Department of Economics, Florida State University.
    • Handle: RePEc:fsu:wpaper:wp2010_09_01
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    bribery; moral cost; bargaining model; incomplete information; multiple equilibria;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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