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.
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I wish to thank Tarik Kara, Hakan Ercan, İsmail Sağlam and an anonymous referee for their very helpful comments and suggestions.
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Bayar, G. The role of intermediaries in corruption. Public Choice 122, 277–298 (2005). https://doi.org/10.1007/s11127-005-5916-8
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DOI: https://doi.org/10.1007/s11127-005-5916-8