IDEAS home Printed from https://ideas.repec.org/a/oup/jleorg/v30y2014i3p623-648..html
   My bibliography  Save this article

Encouraging Compliance: Bonuses Versus Fines in Inspection Games

Author

Listed:
  • Daniele Nosenzo
  • Theo Offerman
  • Martin Sefton
  • Ailko van der Veen

Abstract

In this article we examine the effectiveness of bonuses and fines in an "inspection game," where costly inspection allows an authority to detect whether or not an individual complies with some standard of behavior. Standard game theoretic analysis predicts that in the inspection game non-compliant behavior is deterred by fines targeted at non-compliant individuals, but encouraged by bonuses awarded to compliant individuals. In an experiment we find that fines are effective in deterring non-compliance. However, in agreement with recent behavioral theories, we find that the effect of bonuses on compliance is much weaker than predicted. (JEL C72, C92, K42).

Suggested Citation

  • Daniele Nosenzo & Theo Offerman & Martin Sefton & Ailko van der Veen, 2014. "Encouraging Compliance: Bonuses Versus Fines in Inspection Games," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(3), pages 623-648.
    • Handle: RePEc:oup:jleorg:v:30:y:2014:i:3:p:623-648.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/jleo/ewt001
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesc Dilmé & Daniel F Garrett, 2019. "Residual Deterrence," Journal of the European Economic Association, European Economic Association, vol. 17(5), pages 1654-1686.
    2. Ken Yahagi, 2023. "Sanctions and rewards with a motivated agent," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2057-2067, June.
    3. Michael Roos & Jessica Reale & Frederik Banning, 2021. "The effects of incentives, social norms, and employees' values on work performance," Papers 2107.01139, arXiv.org, revised Jul 2021.
    4. Despoina Alempaki & Gönül Doğan & Silvia Saccardo, 2019. "Deception and reciprocity," Experimental Economics, Springer;Economic Science Association, vol. 22(4), pages 980-1001, December.
    5. Roos, Michael W. M. & Reale, Jessica & Banning, Frederik, 2021. "The effects of incentives, social norms, and employees' values on work performance," Ruhr Economic Papers 917, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jleorg:v:30:y:2014:i:3:p:623-648.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/jleo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.