Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/229994 
Year of Publication: 
2020
Series/Report no.: 
Discussion Papers of the Max Planck Institute for Research on Collective Goods No. 2020/8
Publisher: 
Max Planck Institute for Research on Collective Goods, Bonn
Abstract: 
This paper studies the differential effects of fines and damages on people's investment in accident prevention. We report results from a laboratory experiment in which monetary payoffs are maintained across the two policy instruments. While standard theory predicts no difference in behavior, we find that potential injurers invest substantially more money in accident prevention when they are subject to damages instead of a fine. We discuss possible behavioral channels that may explain our findings.
Subjects: 
Externality
Care
Liability
Damages
Fine
JEL: 
H62
K42
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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