Does a Rise in Maximal Fines Increase or Decrease the Optimal Level of Deterrence?

Tabbach Avraham D
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Tabbach Avraham D: Tel-Aviv University

Review of Law & Economics, 2009, vol. 5, issue 1, 53-73

Abstract: The economic literature on crime and law enforcement shows that the optimal level of deterrence increases when maximal fines rise. This paper shows that this view may be incorrect. In particular, if the gains from crime can be disgorged, as is usually the case in reality, then increasing the maximal fine may reduce the optimal level of deterrence. This may happen if offenders' wealth is less than the monetary value of the harm that offenders cause.

Date: 2009
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DOI: 10.2202/1555-5879.1245

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