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This paper provides a simple model of repeated extortion. In particular, we ask whether corrupt government officials' ex post opportunism to demand more once entrepreneurs have made sunk investments entails further distortion in resource allocations. We show that the inability of government...
Persistent link: https://www.econbiz.de/10010507749
Social interactions provide a set of incentives for regulating individual behavior. Chief among these is stigma, the status loss and discrimination that results from the display of stigmatized attributes or behaviors. The stigmatization of behavior is the enforcement mechanism behind social...
Persistent link: https://www.econbiz.de/10009725488
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This work is an entry for the second edition of Sage's Encyclopedia of Business Ethics and Society. It explains the nature of the problems of corruption and, more specifically, extortion and their ethical implications. The entry also compares and contrasts extortion and bribery, the two main...
Persistent link: https://www.econbiz.de/10012965304
I model the connection between the equilibrium bribe amount and the fines imposed on both bribe-taker and bribe-payer. I show that Basu’s (2011) proposal to lower the fines imposed on bribe-payers in order to induce more whistleblowing and increase the probability of penalizing corrupt...
Persistent link: https://www.econbiz.de/10011758979
This paper provides a simple model of repeated extortion. In particular, we ask whether corrupt government officials' ex post opportunism to demand more once entrepreneurs have made sunk investments entails further distortion in resource allocations. We show that the inability of government...
Persistent link: https://www.econbiz.de/10014204976
Research in criminology has shown that the perceived risk of apprehension often differs substantially from the true level. To account for this insight, we extend the standard economic model of law enforcement (Becker, 1968) by considering two types of offenders, sophisticates and naïves. The...
Persistent link: https://www.econbiz.de/10011864423
Economic theory asserts that, in general, the only cases going to trial should be cases with unpredictable outcomes … cases before trial. I test this theory using a dataset of decisions from the U.S. Courts of Appeals over a six-year period …
Persistent link: https://www.econbiz.de/10014176763
First we show that for wealth-constrained agents who may commit an act twice the optimal sanctions are the offender's entire wealth for the first and zero for the second crime. Then we ask the question whether this decreasing sanction scheme is subgame perfect (time consistent), i.e., does a...
Persistent link: https://www.econbiz.de/10014104293