Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/184653
Authors: 
Buchen, Clemens
Deffains, Bruno
Palermo, Alberto
Year of Publication: 
2018
Series/Report no.: 
IAAEU Discussion Paper Series in Economics 11/2018
Abstract: 
In the theory of public enforcement of law the choice of the liability rules is between strict liability and fault-based liability. In this paper, we study the determinants of compliance when in addition to standard economic incentives wrongdoers take into account stigmatization costs. In this context, this cost is not simply a transfer of resources. We show that a non-guiltiness standard - the fault standard equal to the deterrence level - is never optimal. In this scenario, we show how the optimal policy choice depends on the interplay between the magnitude of the harm and the stigmatization cost.
Subjects: 
Stigmatization
Regulatory Offenses
Law Enforcement
Strict Liability
Negligence
Legal Standard
Compliance
Deterrence
JEL: 
K13
K42
Document Type: 
Working Paper
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