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Becker Stigler (1974) - Law Enforcement Malfeasance And The Compensation Of Enforcers (view source)
Revision as of 17:37, 12 June 2011
, 17:37, 12 June 2011→Topic and Basic ideas
A government is designing a wage scheme to deter corruption in a two period game. The government can choose a period 1 and period 2 wage. The benefit of bribing is <math>b</math> and the probability of being caught is <math>p</math>.
Authors solve for optimal wages to deter bribing. Note that this can be costly, but recouped by using entrance fees.
