Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159077
Authors: 
Franzoni, Luigi Alberto
Year of Publication: 
1995
Series/Report no.: 
Quaderni - Working Paper DSE 234
Abstract: 
This paper develops a model of law enforcement in which the indicted and the enforcer can negotiate the level of the penalty by means of a settlement. The emphasis of the analysis is on the credibility of the settlement other: the enforcer cannot threaten an incredibly large conviction rate if the negotiation fails. The introduction of the negotiation stage brings about several novel features of the optimal enforcement policy, one of which is the possibility that a ¯nite penalty is optimal (globally or locally). We show that the skimming process associated with the negotiation stage reduces the incentives for the enforcer to carry out thorough investigations and increases the rate of noncompliance.
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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