Avoidance, screening and optimum enforcement

Malik, A. S. (1990) Avoidance, screening and optimum enforcement. The RAND Journal of Economics, 21 (3). pp. 341-353.

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A standard assumption in the economic literature on crime and punishment is that fines are costless transfers. Given this assumption, several economists have argued that it is optimal to set the fine for engaging in a proscribed activity as high as possible.' The argument is a simple one. Raising the probability of a fine is costly, since it requires devoting more resources to monitoring and apprehending individuals. In contrast, raising the magnitude of a fine is costless. Therefore, the least costly way to achieve a given expected fine is to set the fine as high as possible, presumably equal to the offender's wealth, and adjust its probability so that the desired expected fine is obtained.

Item Type: Article
Uncontrolled Keywords: Fines,
Author Affiliation: University of Maryland
Subjects: Social Sciences
Divisions: General
Depositing User: Mr Siva Shankar
Date Deposited: 24 Jul 2012 08:57
Last Modified: 24 Jul 2012 08:58
Official URL: http://www.jstor.org/stable/2555613
URI: http://eprints.icrisat.ac.in/id/eprint/6968

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