To Give In or Not To Give In To Bribery? Setting the Optimal Fines for Violations of Rules when the Enforcers are Likely to Ask for Bribes

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To Give In or Not To Give In To Bribery? Setting the Optimal Fines for Violations of Rules when the Enforcers are Likely to Ask for Bribes

Author Info

Celik, Gorkem
Sayan, Serdar

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Abstract

In this paper, we develop a model of law enforcement with the possibility of corruption between enforcers and potential offenders. We study how the violation rate changes with the level of the fine imposed on violations. We find, in contrast to the conventional wisdom, that the fine level that minimizes violations can be intermediate rather than large. Finally, we study conditions under which different fine levels would be optimal.

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Publisher Info
Paper provided by Microeconomics.ca Website in its series Micro Theory Working Papers with number celik-05-08-03-12-50-26.

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Length: 24 pages
Date of creation: 03 Aug 2005
Date of revision: 06 Aug 2008
Handle: RePEc:ubc:pmicro:celik-05-08-03-12-50-26

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Find related papers by JEL classification:
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information

This paper has been announced in the following NEP Reports:

NEP-ALL-2005-08-13 (All new papers)
NEP-LAW-2005-08-13 (Law & Economics)
NEP-REG-2005-08-13 (Regulation)

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