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Erscheinungsjahr: 
2015
Schriftenreihe/Nr.: 
CESifo Working Paper No. 5342
Verlag: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Zusammenfassung: 
This paper models payment evasion as a source of profit by letting the firm choose the purchase price and the fine imposed on detected payment evaders. For a given price and fine, the consumers purchase, evade payment, or choose the outside option. We show that payment evasion leads to a form of second-degree price discrimination in which the purchase price exceeds the expected fine faced by payment evaders. We also show that higher fines do not necessarily reduce payment evasion. Using data on fare dodging on public transportation, we quantify expected fines and payment evasion.
Schlagwörter: 
pricing
fine
price discrimination
deterrence
JEL: 
L12
Dokumentart: 
Working Paper
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