Business Organization Model in Highly Corrupted Economy (in Armenia)
This article presents a model of business organization in highly corrupted economy. In real life we always meet “big” firms who win the tender, and hire “little specialized firm” to realize the contract. Our model provides an explanation for puzzling fact why firms which win the government contract in auctions, need to hire someone else to realize the project. In our article Iwill try to show that a firm can use mixed strategy and the amount of bribe will decrease.
The Handbook of Business and Corruption provides an overview of corrupt business practices in general and, more particularly, in different industry sectors, considering such practices from an ethical perspective.
Usually in service systems with bids for proceeding in the queue interactions between players are ignored, and symmetric information is assumed. The aim of this paper is to explore the influence of communication between players on the total amount of bribes. Preliminary results show that under imperfect information interactions in groups and the properties of the utility function and key parameters are relevant for the equilibrium level of corruption in the system.