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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

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  • Celik, Gorkem
  • Sayan, Serdar

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.

Suggested Citation

  • Celik, Gorkem & Sayan, Serdar, 2005. "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," Microeconomics.ca working papers celik-05-08-03-12-50-26, Vancouver School of Economics, revised 06 Aug 2008.
  • Handle: RePEc:ubc:pmicro:celik-05-08-03-12-50-26
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    File URL: http://microeconomics.ca/gorkem_celik/otf0612.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Corruption; Law Enforcement;

    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 Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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