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A Note on Productive and Dynamic Inefficiencies of Intermediate Regulatory Sanctions

Author

Listed:
  • Friehe Tim

    (University of Marburg, Am Plan 2, Marburg35037, Germany)

  • Mungan Murat C.

    (George Mason University, 3301 Fairfax Dr., Arlington, VA 22201, USA)

Abstract

This article shows that regulatory sanctions that fall into an intermediate range can generate subtle problems not apparent in simple enforcement models. Assuming that firms may ultimately face different noncompliance detection probabilities, we highlight that intermediate sanctions may conflict with aspects of both static and dynamic efficiency.

Suggested Citation

  • Friehe Tim & Mungan Murat C., 2020. "A Note on Productive and Dynamic Inefficiencies of Intermediate Regulatory Sanctions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-8, January.
    • Handle: RePEc:bpj:bejeap:v:20:y:2020:i:1:p:8:n:10
    DOI: 10.1515/bejeap-2019-0122
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    References listed on IDEAS

    as
    1. Nuno Garoupa (ed.), 2009. "Criminal Law and Economics," Books, Edward Elgar Publishing, number 12729.
    2. Leshem Shmuel & Tabbach Avraham D., 2012. "Commitment versus Flexibility in Enforcement Games," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-42, May.
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    4. A. Mitchell Polinsky & Steven Shavell (ed.), 2007. "Handbook of Law and Economics," Handbook of Law and Economics, Elsevier, edition 1, volume 2, number 2.
    5. Florian Baumann & Tim Friehe, 2017. "Design standards and technology adoption: welfare effects of increasing environmental fines when the number of firms is endogenous," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(2), pages 427-450, April.
    6. Polinsky, A. Mitchell & Shavell, Steven, 2007. "The Theory of Public Enforcement of Law," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 1, chapter 6, pages 403-454, Elsevier.
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    10. John Kambhu, 1989. "Regulatory standards, noncompliance and enforcement," Research Paper 8902, Federal Reserve Bank of New York.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    regulation; sanctions; compliance; technology;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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