IDEAS home Printed from https://ideas.repec.org/p/jen/jenasw/2006-06.html
   My bibliography  Save this paper

Bribery and Public Procurement - An Experimental Study

Author

Listed:
  • Susanne Büchner

    (Max-Planck-Institute for Economics)

  • Andreas Freytag

    (University of Jena, Faculty of Economics)

  • Luis G. Gonzalez
  • Werner Güth

    (Max-Planck-Institute for Economics)

Abstract

A procurement contract is granted by a bureaucrat (the auctioneer) who is interested in a low price and a bribe from the provider. The optimal bids and bribes are derived based on an iid private cost assumption. In the experiment, bribes are negatively framed (betweensubjects treatment) to capture that society is better off if bribes are rare or low. Although bids are lower than predicted, behavior is qualitatively in line with the linear equilibrium prediction. When bribes generate a negative externality, there is a significant increase in the variability of the data.

Suggested Citation

  • Susanne Büchner & Andreas Freytag & Luis G. Gonzalez & Werner Güth, 2006. "Bribery and Public Procurement - An Experimental Study," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 06/2006, Friedrich Schiller University of Jena, School of of Economics and Business Administration.
    • Handle: RePEc:jen:jenasw:2006-06
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lengwiler, Yvan & Wolfstetter, Elmar, 2000. "Auctions and corruption," SFB 373 Discussion Papers 2000,40, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    2. Roberto Burguet & Yeon-Koo Che, 2004. "Competitive Procurement with Corruption," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 50-68, Spring.
    3. Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
    4. Klaus Abbink, 2006. "Laboratory Experiments on Corruption," Chapters, in: Susan Rose-Ackerman (ed.), International Handbook on the Economics of Corruption, chapter 14, Edward Elgar Publishing.
    5. Mark Duggan & Steven D. Levitt, 2002. "Winning Isn't Everything: Corruption in Sumo Wrestling," American Economic Review, American Economic Association, vol. 92(5), pages 1594-1605, December.
    6. Beck, Paul J. & Maher, Michael W., 1986. "A comparison of bribery and bidding in thin markets," Economics Letters, Elsevier, vol. 20(1), pages 1-5.
    7. Unknown, 1986. "Letters," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 1(4), pages 1-9.
    8. Celentani, Marco & Ganuza, Juan-Jose, 2002. "Corruption and competition in procurement," European Economic Review, Elsevier, vol. 46(7), pages 1273-1303, July.
    9. Gökhan R. Karahan & Laura Razzolini & William F. Shughart II, 2002. "Centralized versus decentralized decision-making in a county government setting," Economics of Governance, Springer, vol. 3(2), pages 101-115, July.
    10. Lien, Da-Hsiang Donald, 1986. "A note on competitive bribery games," Economics Letters, Elsevier, vol. 22(4), pages 337-341.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amadou Amadou Boly & Kole Keita & Assi Okara & Guei Guei C. Okou, 2021. "Effect of corruption on educational quantity and quality : theory and evidence," CERDI Working papers hal-03194726, HAL.
    2. Celentani, Marco & Ganuza, Juan-Jose, 2002. "Corruption and competition in procurement," European Economic Review, Elsevier, vol. 46(7), pages 1273-1303, July.
    3. Menezes, Flavio M. & Monteiro, Paulo Klinger, 2006. "Corruption and auctions," Journal of Mathematical Economics, Elsevier, vol. 42(1), pages 97-108, February.
    4. Roberto Burguet & Juan-José Ganuza & José García-Montalvo, 2016. "The Microeconomics of Corruption. A Review of Thirty Years of Research," Working Papers 908, Barcelona School of Economics.
    5. Arjona Trujillo, Ana María, 2002. "La corrupción política: una revisión de la literatura," DE - Documentos de Trabajo. Economía. DE de021404, Universidad Carlos III de Madrid. Departamento de Economía.
    6. Wolfgang Maennig, 2004. "Korruption im internationalen Sport: ökonomische Analyse und Lösungsansätze," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 73(2), pages 263-291.
    7. Peng Hao & Jun-Peng Guo & Eoghan O’Neill & Yong-Heng Shi, 2023. "When Will First-Price Work Well? The Impact of Anti-Corruption Rules on Photovoltaic Power Generation Procurement Auctions," Sustainability, MDPI, vol. 15(4), pages 1-24, February.
    8. Björn Frank, 2004. "Zehn Jahre empirische Korruptionsforschung," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 73(2), pages 184-199.
    9. Matthew Terry RIVI & Ishmael OGBORU & Dooshima Jennifer RIVI, 2020. "An Analysis of the Long-Run Relationship Between Corruption and Debt Sustainability in Nigeria," RAIS Journal for Social Sciences, Research Association for Interdisciplinary Studies, vol. 4(2), pages 71-88, November.
    10. Ariane Lambert-Mogiliansky, 2011. "Corruption and Collusion: Strategic Complements in Procurement," Chapters, in: Susan Rose-Ackerman & Tina Søreide (ed.), International Handbook on the Economics of Corruption, Volume Two, chapter 4, Edward Elgar Publishing.
    11. Shinya Horie, 2017. "Procurement Auctions with Uncertainty in Corruption," Discussion Papers 1710, Graduate School of Economics, Kobe University.
    12. Chandel, Shivangi & Sarkar, Shubhro, 2023. "Corruption in multidimensional procurement auctions under asymmetry," Economic Modelling, Elsevier, vol. 120(C).
    13. Maurizio Lisciandra & Emanuele Millemaci, 2017. "The economic effect of corruption in Italy: a regional panel analysis," Regional Studies, Taylor & Francis Journals, vol. 51(9), pages 1387-1398, September.
    14. Méon, Pierre-Guillaume & Weill, Laurent, 2010. "Is Corruption an Efficient Grease?," World Development, Elsevier, vol. 38(3), pages 244-259, March.
    15. Arozamena, Leandro & Weinschelbaum, Federico, 2009. "The effect of corruption on bidding behavior in first-price auctions," European Economic Review, Elsevier, vol. 53(6), pages 645-657, August.
    16. Qing Liu & Ruosi Lu & Xiangjun Ma, 2015. "Corruption, Financial Resources and Exports," Review of International Economics, Wiley Blackwell, vol. 23(5), pages 1023-1043, November.
    17. Þevket Alper Koç, 2008. "Effects Of Asymmetry On Ex Ante Corruption At Auctions," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 22(1+2), pages 17-33.
    18. Gauthier, Bernard & Goyette, Jonathan & Kouamé, Wilfried A.K., 2021. "Why do firms pay bribes? Evidence on the demand and supply sides of corruption in developing countries," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 463-479.
    19. Zhe Chen, 2021. "The bid orchestration and competitions in scoring procurement auctions," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(7), pages 1718-1729, October.
    20. Chen, Yunling & Liu, Ming & Su, Jun, 2013. "Greasing the wheels of bank lending: Evidence from private firms in China," Journal of Banking & Finance, Elsevier, vol. 37(7), pages 2533-2545.

    More about this item

    Keywords

    Corruption; Procurement Auctions;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jen:jenasw:2006-06. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Markus Pasche (email available below). General contact details of provider: https://www.wiwi.uni-jena.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.