The impact of fine size and uncertainty on punishment and deterrence: Theory and evidence from the laboratory

Eberhard Feess (), Hannah Schildberg-Hörisch, Markus Schramm and Ansgar Wohlschlegel
Authors registered in the RePEc Author Service: Hannah Schildberg-Hoerisch ()

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: We develop a theoretical model to identify and compare partial and equilibrium effects of uncertainty and the magnitude of fines on punishment and deterrence. Partial effects are effects on potential violators' and punishers' decisions when the other side's behavior is exogenously given. Equilibrium effects account for the interdependency of these decisions. This interdependency is important since, in the case of legal uncertainty, higher fines may reduce the willingness to punish, which in turn reduces the deterrence effect of high fines. Using a laboratory experiment, we identify these effects empirically by means of a strategy-method design in which potential violators can condition their behavior on the behavior of potential punishers and vice versa. All our experimental findings on both partial and equilibrium effects are in line with the hypotheses derived from the theory.

Keywords: Deterrence; Punishment; Uncertainty; Fines; Partial and Equilibrium Effects; Lab Experiment (search for similar items in EconPapers)
JEL-codes: C91 D64 K12 K42 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-exp and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://epub.ub.uni-muenchen.de/25397/1/526.pdf (application/pdf)

Related works:
Journal Article: The impact of fine size and uncertainty on punishment and deterrence: Theory and evidence from the laboratory (2018)
Working Paper: The Impact of Fine Size and Uncertainty on Punishment and Deterrence: Theory and Evidence from the Laboratory (2015)
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:trf:wpaper:526

Access Statistics for this paper

More papers in Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich Geschwister-Scholl-Platz 1, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Tamilla Benkelberg ().