SOPHISTICATED ENFORCEMENT AND ADAPTIVE OFFENDERS

Bryan McCannon

International Game Theory Review (IGTR), 2011, vol. 13, issue 02, 235-246

Abstract: The interaction between a sophisticated player and a fictitious player is analyzed and applied to the problem of optimal enforcement. An adaptive potential offender myopically responds to the history of past enforcement. How can a sophisticated enforcement official take advantage of this behavior? Will compliance with the law be attained? Conditions under which full compliance arises is derived and the optimal cycle of enforcing and not enforcing the law is presented. Welfare is shown to be greater than if the offender was sophisticated as well.

Keywords: Adaptive play; bounded rationality; deterrence; fictitious play; optimal enforcement; K42; D83 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:igtrxx:v:13:y:2011:i:02:n:s0219198911002976

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DOI: 10.1142/S0219198911002976

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