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The Interaction of Legal and Social Norm Enforcement

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  • Sebastian Kube
  • Christian Traxler

Abstract

Although legal sanctions are often non-deterrent, we frequently observe compliance with ‘mild laws’. A possible explanation is that the incentives to comply are shaped not only by legal, but also by social sanctions. This paper employs a novel experimental approach to study the link between legal and social norm enforcement. We analyze whether the two institutions are complements or substitutes. Our results show that legal sanctions partially crowd out social norm enforcement. The welfare effect from mild laws is positive, however, as a higher level of compliance is achieved at lower enforcement costs.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-06/cesifo1_wp3091.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3091.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3091

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Keywords: social sanctions; legal sanctions; norm enforcement; mild laws; laboratory experiment; VCM; public goods;

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References

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  1. Cooter, Robert, 1998. "Expressive Law and Economics," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 585-608, June.
  2. Jordi Brandts & Gary Charness, 2000. "Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games," Experimental Economics, Springer, vol. 2(3), pages 227-238, March.
  3. Astrid Hopfensitz & Ernesto Reuben, 2005. "The Importance of Emotions for the Effectiveness of Social Punishment," Discussion Papers 06-09, University of Copenhagen. Department of Economics, revised Mar 2006.
  4. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2005. "Driving Forces Behind Informal Sanctions," IZA Discussion Papers 1635, Institute for the Study of Labor (IZA).
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  7. Urs Fischbacher & Simon Gaechter & Ernst Fehr, . "Are People Conditionally Cooperative? Evidence from a Public Goods Experiment," IEW - Working Papers 016, Institute for Empirical Research in Economics - University of Zurich.
  8. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
  9. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  10. Jeffrey Carpenter, 2002. "The Demand for Punishment," Middlebury College Working Paper Series 0243, Middlebury College, Department of Economics.
  11. Hörisch, Hannah & Strassmair, Christina, 2008. "An experimental test of the deterrence hypothesis," Discussion Papers in Economics 2139, University of Munich, Department of Economics.
  12. Ellickson, Robert C, 1998. "Law and Economics Discovers Social Norms," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 537-52, June.
  13. Jean-Robert Tyran & Lars P. Feld, 2006. "Achieving Compliance when Legal Sanctions are Non-deterrent," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 135-156, 03.
  14. Ronald Bosman & Frans van Winden, 2002. "Emotional Hazard in a Power-to-take Experiment," Economic Journal, Royal Economic Society, vol. 112(476), pages 147-169, January.
  15. Mari Rege, 2004. "Social Norms and Private Provision of Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(1), pages 65-77, 02.
  16. Cooter, Robert, 1998. "Expressive Law and Economics," Berkeley Olin Program in Law & Economics, Working Paper Series qt3w34j60j, Berkeley Olin Program in Law & Economics.
  17. Charness, Gary B & Brandts, Jordi, 1998. "Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games," University of California at Santa Barbara, Economics Working Paper Series qt4kx7d5pv, Department of Economics, UC Santa Barbara.
  18. Trautmann, Stefan T., 2009. "A tractable model of process fairness under risk," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 803-813, October.
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Citations

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Cited by:
  1. Kenju Kamei & Louis Putterman & Jean-Robert Tyran, 2011. "State or Nature? Formal vs. Informal Sanctioning in the Voluntary Provision of Public Goods," Working Papers 2011-3, Brown University, Department of Economics.
  2. Michael Funke & Yu-Fu Chen, 2010. "Global warming and extreme events: Rethinking the timing and intensity of environment policy," Quantitative Macroeconomics Working Papers 21007b, Hamburg University, Department of Economics.
  3. Filippin, Antonio & Fiorio, Carlo V. & Viviano, Eliana, 2013. "The effect of tax enforcement on tax morale," European Journal of Political Economy, Elsevier, vol. 32(C), pages 320-331.
  4. Jean-Robert Tyran & Thomas Markussen & Louis Putterman, 2011. "Self-Organization for Collective Action: An Experimental Study of Voting on Formal, Informal, and No Sanction Regimes," Vienna Economics Papers 1103, University of Vienna, Department of Economics.
  5. Hokamp, Sascha, 2014. "Dynamics of tax evasion with back auditing, social norm updating, and public goods provision – An agent-based simulation," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 187-199.
  6. Christoph Engel & Sebastian Kube & Michael Kurschilgen, 2011. "Can we manage first impressions in cooperation problems? An experimental study on “Broken (and Fixed) Windows”," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2011_05, Max Planck Institute for Research on Collective Goods.
  7. Douhou, Salima & Magnus, Jan R. & van Soest, Arthur, 2011. "The perception of small crime," European Journal of Political Economy, Elsevier, vol. 27(4), pages 749-763.
  8. Christian Traxler & Joachim Winter, 2009. "Survey Evidence on Conditional Norm Enforcement," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2009_03, Max Planck Institute for Research on Collective Goods.
  9. Bernasconi, Michele & Corazzini, Luca & Marenzi, Anna, 2013. "‘Expressive’ obligations in public good games: Crowding-in and crowding-out effects," Research in Economics, Elsevier, vol. 67(1), pages 13-24.
  10. Andreoni, James & Gee, Laura K., 2012. "Gun for hire: Delegated enforcement and peer punishment in public goods provision," Journal of Public Economics, Elsevier, vol. 96(11), pages 1036-1046.
  11. Sven Fischer & Kristoffel Grechenig & Nicolas Meier, 2013. "Cooperation under punishment: Imperfect information destroys it and centralizing punishment does not help," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2013_06, Max Planck Institute for Research on Collective Goods.

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