Becker Stigler (1974) - Law Enforcement Malfeasance And The Compensation Of Enforcers
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|Has article title||Law Enforcement Malfeasance And The Compensation Of Enforcers|
|Has author||Becker Stigler|
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Becker, G. and G. Stigler (1974), Law Enforcement, Malfeasance, and the Compensation of Enforcers, Journal of Legal Studies 3, 1-19. pdf
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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.