Bribery versus extortion: allowing the lesser of two evils

A-Tier
Journal: RAND Journal of Economics
Year: 2010
Volume: 41
Issue: 1
Pages: 179-198

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Both bribery and extortion weaken the power of incentives, but there is a trade‐off in fighting the two because rewards to prevent supervisors from accepting bribes create incentives for extortion. Which is the worse evil? A fear of inducing extortion may make it optimal to tolerate bribery, but extortion is never allowed. Extortion discourages “good behavior” because the agent suffers from it even though he has done the right thing, whereas a bribe acts as a penalty for “bad behavior.” Our analysis provides lessons to fight corruption and explanations why developed countries may have an advantage in dealing with extortion.

Technical Details

RePEc Handle
repec:bla:randje:v:41:y:2010:i:1:p:179-198
Journal Field
Industrial Organization
Author Count
3
Added to Database
2026-01-25