期刊名称：Dresden Discussion Paper Series in Economics / Dresden University of Technology, Faculty of Business Management and Economics
印刷版ISSN：0945-4829
出版年度：2003
卷号：1
出版社：Dresden
摘要：This paper provides a simple model of repeated extortion. In particular, we ask whether corrupt government officials’
ex post opportunism to demand more once entrepreneurs have made sunk investments entails further distortion in
resource allocations. We show that the inability of government officials to commit to future demands does not distort
entry decisions any further if technology is not a choice variable for the entrepreneurs. The government official can
properly discount the initial demand in order to induce the appropriate amount of entry. If, however, the choice of
technology is left to the entrepreneurs, the dynamic path of demand schedules will induce entrepreneurs to pursue a
"fly-by-night" strategy by adopting a technology with an inefficiently low sunk cost component. In this case, we show
that the unique equilibrium is characterized by a mixed strategy of the government official in future demand. Our model
thus explains why arbitrariness is such a central feature of extortion. We also investigate implications of the stability of
the corrupt regime for dynamic extortion and discuss how our framework can be applied to other investment contexts
involving the risk of expropriation.
关键词：corruption, repeated extortion, ex post opportunism, dynamic consistency, dynamic cream skimming.
