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Cartels and Bribes
Working paper   Open access

Cartels and Bribes

Roberto Burguet, Elisabetta Iossa and Giancarlo Spagnolo
2023

Abstract

Bribes cartels free-riding whistle-blowing D44 D73 H57 L41 Corruption
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. 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.
url
http://dx.doi.org/10.2139/ssrn.4474335View
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