Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81361
Authors: 
Bigoni, Maria
Fridolfsson, Sven-Olof
Le Coq, Chloe
Spagnolo, Giancarlo
Year of Publication: 
2011
Series/Report no.: 
IFN Working Paper 859
Abstract: 
We present results from a laboratory experiment identifying the main channels through which different law enforcement strategies deter organized economic crime. The absolute level of a fine has a strong deterrence effect, even when the exogenous probability of apprehension is zero. This effect appears to be driven by distrust or fear of betrayal, as it increases significantly when the incentives to betray partners are strengthened by policies offering amnesty to “turncoat whistleblowers”. We also document a strong deterrence effect of the sum of fines paid in the past, which suggests a significant role for salience or availability heuristic in law enforcement.
Subjects: 
Betrayal
Collusion
Corruption
Distrust
Fraud
Organized Crime
Whistleblowers
JEL: 
C92
D03
D80
K21
K42
L41
Document Type: 
Working Paper

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