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Regulatory Compliance with Nonlinear Penalties

Sherrill Shaffer

Journal of Regulatory Economics, 1990, vol. 2, issue 1, 99-103

Abstract: Previous work has shown that, when firms choose only partial compliance with a regulatory standard, tightening the standard may drive firms' behavior in the wrong direction. This note explores the potential of nonlinear penalty functions to move behavior in the socially desired direction when standards are tightened without raising the total penalty. Copyright 1990 by Kluwer Academic Publishers

Date: 1990
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