Optimal Magnitude and Probability of Fines when Courts Dislike Punishment
Fecha: julio 2019
Nuno Garoupa
Cumplimiento de la ley, Delitos, Sanciones
Law and economics. A productive relationship
The economic literature on crime and punishment has focused on the trade-off between probability and severity of punishment for many decades. It suggests that detection probability and fines are substitutes. However, the literature assumes implicitly that courts are willing to enforce maximal fines. In this article, it is shown that, in presence of courts who dislike punishment, the optimal policy involves lower sanctions. The effect on the probability varies with the parameters of the model. In particular, when substantial underdeterrence caused by costly detection and punishment prevails, the probability might also go down. Policy implications are discussed.