Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/124898
Authors: 
Feess, Eberhard
Schildberg-Hörisch, Hannah
Schramm, Markus
Wohlschlegel, Ansgar
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9388
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.
Subjects: 
deterrence
punishment
legal uncertainty
fines
laboratory experiment
partial and equilibrium effects
JEL: 
K14
K42
C91
D64
Document Type: 
Working Paper

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