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Optimal sanctions and endogeneity of differences in detection probabilities

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  • Friehe, Tim

Abstract

Offenders differ with respect to their detection probability in reality. Bebchuk and Kaplow [Bebchuk, L. A., & Kaplow, L. (1993). Optimal sanctions and differences in individuals' likelihood of avoiding detection. International Review of Law and Economics, 13, 217-224] conclude that optimal sanctions should increase with the ability to avoid detection. We endogenize differences in detection probabilities by letting individuals choose education. The optimal sanction schedule may be reversed if individuals do not account for all benefits of education. This paper thereby demonstrates how incentives for seemingly remote decisions can be manipulated through sanction structures.

Suggested Citation

  • Friehe, Tim, 2008. "Optimal sanctions and endogeneity of differences in detection probabilities," International Review of Law and Economics, Elsevier, vol. 28(2), pages 150-155, June.
  • Handle: RePEc:eee:irlaec:v:28:y:2008:i:2:p:150-155
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    References listed on IDEAS

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    Cited by:

    1. Ian Smith, 2012. "Reinterpreting the economics of extramarital affairs," Review of Economics of the Household, Springer, vol. 10(3), pages 319-343, September.
    2. Jacques Pelletan, 2013. "Knowledge society and crime: an ambiguous relation," Economics Bulletin, AccessEcon, vol. 33(3), pages 1852-1862.

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