Cartels and bribes

Arbeitspapier

We study the relationship between collusion and corruption in a stylized model of repeated procurement where the cost of reporting corrupt bureaucrats gives rise to a free riding problem. As in Dixit (2015, 2016), cooperation among honest suppliers alleviates free-riding in reporting. However, it also facilitates collusion in bidding by increasing the value of the collusive rent. In turn, bidding collusion facilitates cooperation in reporting by increasing the value of having honest bureaucrats, generating a trade-off. When the likelihood of corruption is high and competition is weak, collusion may be a price worth paying to curb corruption.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper Series ; No. 16

Classification and Topics

• Classification: Wirtschaft ; Auctions ; Bureaucracy; Administrative Processes in Public Organizations; Corruption ; National Government Expenditures and Related Policies: Procurement ; Monopolization; Horizontal Anticompetitive Practices
• Subject: Bribes ; cartels ; collusion ; corruption ; free-riding

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Burguet, Roberto ; Iossa, Elisabetta ; Spagnolo, Giancarlo
• Event: Veröffentlichung
• (who): Bocconi University, Centre for Research on Geography, Resources, Environment, Energy and Networks (GREEN)
• (where): Milan
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/269886
• Last update: 10.03.2025, 11:44 AM CET