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Regulatory Enforcement with Discretionary Fining and Litigation

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  • Rodriguez-Ibeas, Roberto

Abstract

In this paper, we focus on the determination of the optimal fine set by a regulator when a firm can litigate to avoid paying the fine and the monitoring agency has discretionary power to negotiate with the firm the size of the fine. The regulator needs to balance the positive effect of the fine's size on the degree of non-compliance and the possibility of litigation if the fine is too high. We find that the optimal fine is not necessarily set at its maximum level. Copyright 2002 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

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  • Rodriguez-Ibeas, Roberto, 2002. "Regulatory Enforcement with Discretionary Fining and Litigation," Bulletin of Economic Research, Wiley Blackwell, vol. 54(2), pages 105-118, April.
    • Handle: RePEc:bla:buecrs:v:54:y:2002:i:2:p:105-18
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    Cited by:

    1. Elizabeth Robinson, 2004. "Wanted dead and alive: Are hunting and protection of endangered species compatible?," Development and Comp Systems 0409066, University Library of Munich, Germany.
    2. Robinson, Elizabeth J.Z. & Kumar, Ajay Mahaputra & Albers, Heidi J., 2009. "Optimal Enforcement and Practical Issues of Resource Protection in Developing Countries," RFF Working Paper Series dp-09-08-efd, Resources for the Future.

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