Theoretical and Game Modeling of Corrupt Behavior at the Customs

Abstract

Social norms arising in the process of human interaction are key in understanding a number of negative phenomena in the economy, and corruption being one of them. Using the example of interaction between an importer and a Customs officer the paper analyzes the corruption scheme arising between them, economically equivalent to a cartel collusion in highly concentrated industrial markets. The method of combatting the corruption, similar to the corporate policy “cooperation with the investigation”, is based on a price war, which the government arranges against a bribe-giver to destroy trust within the cartel. The analysis is based on the experimental design that develops the Abbink and Wu approaches which investigate the mechanism for the collusion destruction mechanism by a civil Customs officer which is one of the most effective anti-corruption measures.