Optimal magnitude and probability of fines

Nuno Garoupa

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: The economic literature on crime and punishment focuses on the trade-off between probability and severity of punishment, and suggests that detection probability and fines are substitutes. In this paper it is shown that, in presence of substantial underdeterrence caused by costly detection and punishment, these instruments may become complements. When offenders are poor, the deterrent value of monetary sanctions is low. Thus, the government does not invest a lot in detection. If offenders are rich, however, the deterrent value of monetary sanctions is high, so it is more profitable to prosecute them.

Keywords: Crime; probability and severity of sanctions; law enforcement (search for similar items in EconPapers)
JEL-codes: K4 (search for similar items in EconPapers)
Date: 2000-04
New Economics Papers: this item is included in nep-law
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Citations: View citations in EconPapers (4)

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Journal Article: Optimal magnitude and probability of fines (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:454

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