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Stigmatization, Liability and Public Enforcement of Law

Author

Listed:
  • Alberto Palermo

    (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University)

  • Clemens Buchen

    (EBS University, Wiesbaden)

  • Bruno Deffains

    (University Paris 2 and Institut Universitaire de France)

Abstract

In the theory of public enforcement of law the choice of the liability rules is between strict liability and fault-based liability. In this paper, we study the determinants of compliance when in addition to standard economic incentives wrongdoers take into account stigmatization costs. In this context, this cost is not simply a transfer of resources. We show that a non-guiltiness standard — the fault standard equal to the deterrence level — is never optimal. In this scenario, we show how the optimal policy choice depends on the interplay between the magnitude of the harm and the stigmatization cost.

Suggested Citation

  • Alberto Palermo & Clemens Buchen & Bruno Deffains, 2018. "Stigmatization, Liability and Public Enforcement of Law," IAAEU Discussion Papers 201811, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    • Handle: RePEc:iaa:dpaper:201811
    as

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    References listed on IDEAS

    as
    1. Marco de Pinto & Laszlo Goerke, 2020. "Welfare‐enhancing Trade Unions in an Oligopoly with Excessive Entry," Manchester School, University of Manchester, vol. 88(1), pages 60-90, January.
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    5. Chadi, Adrian, 2021. "Identification of attrition bias using different types of panel refreshments," Economics Letters, Elsevier, vol. 201(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Stigmatization; Regulatory Offenses; Law Enforcement; Strict Liability; Negligence; Legal Standard; Compliance; Deterrence;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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