A Dynamic Agent-based Model of Corruption
نویسنده
چکیده
The author builds an agent-based model wherein the societal corruption level is derived from individual corruption levels optimally chosen by heterogeneous agents with different risk aversion and human capital. The societal corruption level, in turn, affects the risk-return profile of corruption for the individual agents. Simulating a multi-generational economy with heterogeneous agents, the author shows that there are locally stable equilibrium corruption levels with certain socio-economic determinants. However, there are situations when corruption can rise until it stifles all economic activity.
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