Scandinavian Working Papers in Economics

Umeå Economic Studies,
Umeå University, Department of Economics

No 1007: Corruption and Adverse Selection

Leonidas Koustougeras (), Manuel Santos () and Fei Xu ()
Additional contact information
Leonidas Koustougeras: University of Manchester, School of Social Sciences
Manuel Santos: University of Miami, School of Business Administration
Fei Xu: Department of Economics, Umeå University, Postal: Department of Economics, Umeå University, S 901 87 Umeå, Sweden

Abstract: It is well known that in the presence of asymmetric information, adverse selection has detrimental effects on possible exchanges. We go a step further, and present a game-theoretic setup in which under such adverse selection effects there are uncertain benefits for bribing unknown players’ types (e.g., individuals, committees, or companies). A policy maker may then want to design indirect anti-corruption policies based on triggering failures for bribery attempts. In our stylized framework, we get a complete unraveling of bribes. This result can be extended to more complex environments under fairly mild conditions on players’ payoff functions.

Keywords: Corruption; bribe; adverse selection

JEL-codes: D71; D80; D82; D86

Language: English

20 pages, August 30, 2022

Full text files 

ues1007.pdf PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to David Skog ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:umnees:1007This page generated on 2024-09-13 22:17:26.