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Black Sheep or Scapegoats? Implementable Monitoring Policies under Unobservable Levels of Misbehavior

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  • Berno Buechel
  • Gerd Muehlheusser

Abstract

An authority delegates a monitoring task to an agent. Thereby, it can observe the number of detected offenders but not the monitoring intensity chosen by the agent or the resulting level of misbehavior. We provide a necessary and sufficient condition for the implementability of monitoring policies. When several monitoring intensities lead to an observationally identical outcome, only the minimum of these is implementable, which can lead to underenforcement. A comparative-statics analysis reveals that increasing the punishment can undermine deterrence, since the maximal implementable monitoring intensity decreases. When the agent is strongly intrinsically motivated to curb crime, our results are mirrored, and only high monitoring intensities are implementable. Then, higher monetary rewards for detections lead to a lower monitoring intensity and to a higher level of misbehavior.

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  • Berno Buechel & Gerd Muehlheusser, 2016. "Black Sheep or Scapegoats? Implementable Monitoring Policies under Unobservable Levels of Misbehavior," The Journal of Legal Studies, University of Chicago Press, vol. 45(2), pages 331-366.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/688693
    DOI: 10.1086/688693
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    Cited by:

    1. Buechel, Berno & Feess, Eberhard & Muehlheusser, Gerd, 2020. "Optimal law enforcement with sophisticated and naïve offenders," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 836-857.

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    More about this item

    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

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