Corruption and intermediaries - A game theoretical approach

Bayar, Güzin
The aim of the article is to examine a bribee-initiated corrupt transaction and the role of intermediaries in such a transaction, using a game theoretical model. Corrupt officers, who want to obtain a bribe from the public services they offer, use their power to increase red tape to enforce clients to pay a bribe. However, if the officer demands a bribe directly from the clients, they face the risk of demanding a bribe from a "whistleblower" client, who has high ethical values and complains to the law enforcement authority about every bribe demand from her. Thus, public officers may prefer using intermediaries to decrease the risk of being complained about and suffering penalties. I examine cases with and without intermediaries in such a scenario and then compare the results of the two. In the case where there is no intermediary, in some situations the risks involved may be so large that the officer may prefer not to demand a bribe. On the other hand, in the cases with intermediaries, the detection risk is reduced, so taking a bribe is nearly always more profitable for the officer. Based on the model’s results, policy suggestions for corruption prevention are made.


The role of intermediaries in corruption
Bayar, G (Springer Science and Business Media LLC, 2005-03-01)
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.
Exchange transactions revisited: on the universal applicability of homo economicus
Dixon, John (Emerald, 2017-01-01)
Purpose - The purpose of this paper is to provide a comprehensive classification of quid pro quo exchange transactions, so as to distinguish the different ways that desired exchange outcomes can be determined and that transactional processes can be conducted. This permits reflection on the generality of the theory of the individual embedded in neoclassical (orthodox) economics. Design/methodology/approach - The approach adopted is to draw upon the contending dichotomies in epistemology (naturalism or herme...
Socioeconophysics: Opinion dynamics for number of transactions and price, a trader based model
Tuncay, Çağlar (World Scientific Pub Co Pte Lt, 2006-10-01)
Involving effects of media, opinion leader and other agents on the opinion of individuals of market society, a trader based model is developed and utilized to simulate price via supply and demand. Pronounced effects are considered with several weights and some personal differences between traders axe taken into account. Resulting time series and probabilty distribution function involving a power law for price come out similar to the real ones.
Bank asset and liability management under uncertainty
Oguzsoy, CB; Güven, Sibel (Elsevier BV, 1997-11-01)
This study presents a multiperiod stochastic linear simple recourse model for asset and liability management in banking. The model determines the portfolio of assets and liabilities over the planning horizon given a set of deterministic rates of returns of investments and costs of borrowings, and a set of random outstanding deposit levels, liquidity and total reserve requirements with a given discrete probability distribution. The intention is to develop an optimization tool to assure sustained profitabilit...
Ünal, Umut (Wroclaw University of Economics and Business, 2018-01-01)
This paper develops a dynamic stochastic general equilibrium (DSGE) model for analyzing the impact of various capital income tax policies in a small open economy populated by households possessing endogenous time preferences. We contribute to the literature by studying the impacts of: i) anticipated tax shocks under stochastically growing output, ii) stochastic tax shocks under deterministic output, on our dynamic general equilibrium framework. With our model's specifications, this is the first attempt to i...
Citation Formats
G. Bayar, “Corruption and intermediaries - A game theoretical approach,” ODTÜ Gelişme Dergisi, vol. 36, no. 1, pp. 25–49, 2009, Accessed: 00, 2020. [Online]. Available: