Enforcement Costs and the Optimal Magnitude and Probability of Fines
AbstractSome of the costs of enforcing laws are fixed" - - in the sense that they do not depend on the number of individuals who commit harmful acts- -while other costs are "variable"- - they rise with the number of such individuals. This article analyzes the effects of fixed and variable enforcement costs on the optimal fine and the optimal probability of detection. It is shown that the optimal fine rises to reflect variable enforcement costs; that the optimal fine is not directly affected by fixed enforcement costs; and that the optimal probability depends on both types of enforcement costs.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Law & Economics.
Volume (Year): 35 (1992)
Issue (Month): 1 (April)
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Web page: http://www.journals.uchicago.edu/JLE/
Other versions of this item:
- A. Mitchell Polinsky & Steven Shavell, 1993. "Enforcement Costs and the Optimal Magnitude and Probability of Fines," NBER Working Papers 3429, National Bureau of Economic Research, Inc.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mitchell Polinsky, A. & Shavell, Steven, 1982.
"Pigouvian taxation with administrative costs,"
Journal of Public Economics,
Elsevier, vol. 19(3), pages 385-394, December.
- George J. Stigler, 1974.
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in: Essays in the Economics of Crime and Punishment, pages 55-67
National Bureau of Economic Research, Inc.
- Steven Shavell, 1989.
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NBER Working Papers
3062, National Bureau of Economic Research, Inc.
- Gary S. Becker, 1968.
"Crime and Punishment: An Economic Approach,"
Journal of Political Economy,
University of Chicago Press, vol. 76, pages 169.
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