To Penalize or Immunize: What to Do with the Bribe Giver?

24 Pages Posted: 16 May 2013

See all articles by Thiagu Ranganathan

Thiagu Ranganathan

Shailesh J Mehta School of Management, IIT Bombay

Debabrata Das

Shailesh J Mehta School of Management, IIT Bombay

Date Written: May 15, 2013

Abstract

This paper uses game theoretic approach to analyse whether a bribe giver in case of ‘harassment’ bribes needs to be penalized or immunized by law. Various complexities in this issue are addressed by considering three different scenarios: a scenario in which bribe taking official is assumed to surely perform the concerned work for which bribe is paid, a scenario where bribe taker does or does not do the work and a scenario in which the government or anti-corruption unit is considered as the third player in the game. This paper introduces the relevance of transaction costs and enforcement mechanisms while analysing legal issues related to combating corruption. This framework could be used to introduce issues related to corruption in intermediate courses on microeconomics, game theory, and economic development.

Keywords: bribe, game theory, bribe giver, bribe taker

JEL Classification: A2, C70, D73, O10

Suggested Citation

Ranganathan, Thiagu and Das, Debabrata, To Penalize or Immunize: What to Do with the Bribe Giver? (May 15, 2013). Available at SSRN: https://ssrn.com/abstract=2265179 or http://dx.doi.org/10.2139/ssrn.2265179

Thiagu Ranganathan (Contact Author)

Shailesh J Mehta School of Management, IIT Bombay ( email )

Powai
Mumbai, Maharashtra 400076
India
912225764785 (Phone)

Debabrata Das

Shailesh J Mehta School of Management, IIT Bombay ( email )

Powai
Mumbai, Maharashtra 400076
India

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