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Internal Economic Department Seminars – Fei Xu

Time Friday 9 April, 2021 at 14:00 - 15:00
Place Zoom

Title: on, The Ability to Pay, and the Cost of Breaking the Law

Co-authored with  L. Koutsougeras (U Manchester) and M. Santos (U of Miami).

We approach   corruption using a game-theoretic framework with  a government and a donor bribing  an officer.  We  perform  various comparative statics exercises motivated by policy considerations. Under  a taxonomy of corruption based upon the “ability-to-pay"  and  the officer's cost of breaking the law, the model makes  some  definite predictions about the structure  of  the anti-corruption measure and the bribe,  and offers  further insights into  the empirics of corruption. An increase  in the officer's wage  will be counterbalanced by a compensatory bribe, and hence pay will not be an effective tool   to combat corruption. An increase in the efficiency  of crime detection and enforcement will encourage further investment in the anti-corruption measure and will lower the value  of the bribe..

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Event type: Seminar
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Fei Xu
Postdoctoral position
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Gauthier Lanot
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