Compte, O.; Lambert-Mogiliansky, A.; Verdier, T. - In: RAND Journal of Economics 36 (2005) 1, pp. 1-15
We investigate the effect of corruption on competition in procurement. Our assumption is that the bureaucrat (i.e., the agent that administers the market), if corrupt, may provide an opportunity for bid readjusments in exchange for a bribe. As firms expect to be paying a bribe, a mechanical...