Optimal Law Enforcement with Ordered Leniency

Claudia Landeo and Kathryn E. Spier

Journal of Law and Economics, 2020, vol. 63, issue 1, 71 - 111

Abstract: This paper studies the design of optimal enforcement policies with ordered leniency to detect and deter harmful short-term activities committed by groups of injurers. With ordered leniency, the degree of leniency granted to an injurer who self-reports depends on his or her position in the self-reporting queue. We show that the ordered-leniency policy that induces maximal deterrence gives successively larger discounts to injurers who secure higher positions in the reporting queue. This creates a so-called race to the courthouse in which all injurers self-report promptly and, as a result, social harm is reduced. We show that the expected fine increases with the size of the group, which thus discourages the formation of large illegal enterprises. The first-best outcome is obtained with ordered leniency when the externalities associated with the harmful activities are not too great. Our findings complement Kaplow and Shavell’s results for single-injurer environments.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://dx.doi.org/10.1086/705829 (application/pdf)
http://dx.doi.org/10.1086/705829 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: Optimal Law Enforcement with Ordered Leniency (2018)
Working Paper: Optimal Law Enforcement with Ordered Leniency (2018)
Working Paper: Optimal Law Enforcement with Ordered Leniency (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/705829

Access Statistics for this article

More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().