Optimal Sanctions When Individuals are Imperfectly Informed About the Probability of Apprehension

Lucian Bebchuk () and Louis Kaplow

No 4079, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper considers optimal enforcement when individuals may be imperfectly informed about the probability of apprehension. When individuals are perfectly informed, optimal sanctions are maximal because, as Gary Becker (1968) suggested, society can economize on enforcement resources by reducing the probability of apprehension while increasing sanctions. But when individuals imperfectly observe the probability of apprehension, it may be optimal to apply lower sanctions while expending more enforcement resources.

Date: 1992-05
Note: LE
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Published as The Journal of Legal Studies, Vol. XXI, No. 2, pp. 365-370 (June 1992).

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