A corrupt transaction is often the result of bargaining between the parties involved. This paper models bribery as a double auction where a private citizen and a public official strategically interact as the potential buyer and the potential seller of a corrupt service. Individuals differ in the...

We examine how institutions that enforce contracts between two parties, producers and consumers, interact in a competitive market with one-sided symmetric information and productivity shocks. We compare an informal enforcement mechanism, reputation, the efficacy of which is enhanced by consumers...