Abstract
This paper analyzes the impact of corruption in a stylized timber industry representative of many South-East Asian nations, where corruption is common and market driven logging is the leading contributor to deforestation. Corruption is analyzed using a three-player open-loop difference game consisting of a commercial logging contractor, a central government, and a regional government intermediary responsible for enforcing the government’s forest property rights. The intermediary, however, is assumed to either cooperate fully with the contract logger or the central government. The game is piecewise non-linear in both the control and state variables making analytical solutions hard to derive. A genetic algorithm approach is therefore used to solve the model numerically. The results indicate that corruption may negatively impact on an economy due to mis-management of forest resources.
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McAllister, R., Bulmer, M. (2002). A Game of Corruption in a Stylized South-East Asian Timber Industry. In: Kozan, E., Ohuchi, A. (eds) Operations Research/Management Science at Work. International Series in Operations Research & Management Science, vol 43. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-0819-9_6
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DOI: https://doi.org/10.1007/978-1-4615-0819-9_6
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