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Effects of third party errors

Author

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  • Šastitko, Andrej E.

Abstract

Type-I and type-II errors effects do matter both from the rules enforcement perspective and vertically upward to rules enactment. The paper support conventional idea about detrimental influence on deterrence of both types of errors. At the same time special role of type-I errors is demonstrated based on strategic interaction between economic exchange participants supported by third-party enforcement with opportunities to discriminate players. The paper highlights the issue that errors in enforcement is not whole story: the simple classification of cases is suggested from the perspective of type-I and type-II errors in rules enforcement and rules enactment.

Suggested Citation

  • Šastitko, Andrej E., 2013. "Effects of third party errors," EconStor Preprints 121747, ZBW - Leibniz Information Centre for Economics.
  • Handle: RePEc:zbw:esprep:121747
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    File URL: https://www.econstor.eu/bitstream/10419/121747/1/SSRN-id2529026.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    types-I&II errors; institutions; rules enforcement; rules enactment; discrimination; Nash equilibrium;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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