Bargaining and the cost of corruption
FP4 — Training and Mobility of Researchers
- Duration
- 1996-09-02 → 1997-09-01
- EU contribution
- —
- Participants
- 2
- Scheme
- RGI
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Project objective
The illegal nature of corruption makes it often impossible to have a market for corrupt transactions witH public knowledge and leads therefore bribes to be the outcome of bargaining between two parties. The goal of the proposed research is to study how bribes are determined in equilibrium keeping into account that no enforceable contracts can be used in the bargaining process. Once reneging of a previous offer is allowed, the seller" (public official) might have incentives to renege on previous offer that were accepted by the "buyer" (private agent) as his acceptance might signal his willingness to pay for a higher bribe. The result expected is that sequential bargaining does not lead to information transmission and to an approximately efficient solution so that the basic intuition of the Coase Conjecture fails in this setting. Realistic situations will be studied, with the objective to provide normative suggestions to curb corruption and to minimize its economic consequences. "
Original text from CORDIS.
Participants
Links
Data: CORDIS, © European Union