Corruption as an Alternative to Limit Pricing

Raluca Buia
2010 Social Science Research Network  
We explore to what extent bribery can be an alternative way of fighting rivals' entry on the market when there is uncertainty about the degree of corruption in the public sector. For high levels of corruption, "covert" fight through bribery is the optimal choice of an incumbent. For low degree of corruption, instead, the incumbent prefers to act strategically but overtly by playing a limit pricing game.
doi:10.2139/ssrn.1765763 fatcat:nmmdtp6v2jbyzh6yyijmq6jxna