View source for Cadot, O. (1987), Corruption as a Gamble

{{Article
|Has page=Cadot, O. (1987), Corruption as a Gamble
|Has bibtex key=
|Has article title=Corruption as a Gamble
|Has author=Cadot, O.
|Has year=1987
|In journal=
|In volume=
|In number=
|Has pages=
|Has publisher=
}}
Return to [[BPP Field Exam Papers 2012]]]

===Model===
*Firm has to request operational permit from official
*Official asks bribe, b, from firm
*Firm pays bribe if b<v, if not reports official who is fired
*infinite period game

===Comparative Statics===
*If wages raised optimal bribe requested is smaller, but because its smaller, it is paid more often
*So paying higher wages in public sector could lead to more but petty corruption
*When discount factor is bigger the size of the bribe is smaller, because official cares more about the future.