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Deterrence Effects of Enforcement Schemes: An Experimental Study

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  • Marina Agranov

    (Department of Humanities and Social Sciences, California Institute of Technology, Pasadena, California 91125)

  • Anastasia Buyalskaya

    (Department of Humanities and Social Sciences, California Institute of Technology, Pasadena, California 91125)

Abstract

Private and public organizations are interested in finding effective ways to reduce crime and promote ethical behavior without investing heavy resources into monitoring and compliance. In this paper, we experimentally study how revealing different information about a fine distribution affects deterrence of an undesirable behavior. We use a novel incentive-compatible elicitation method to observe subjects lying (the undesirable behavior) and quantify the extent to which this behavior responds to information structures. We find that punishment schemes that communicate only partial information (the minimum fine in particular) are more effective than full information schemes at deterring lying. We explore the mechanism driving this result and link it to subjects’ beliefs about their own versus the average expected fine in treatments with partial information.

Suggested Citation

  • Marina Agranov & Anastasia Buyalskaya, 2022. "Deterrence Effects of Enforcement Schemes: An Experimental Study," Management Science, INFORMS, vol. 68(5), pages 3573-3589, May.
    • Handle: RePEc:inm:ormnsc:v:68:y:2022:i:5:p:3573-3589
    DOI: 10.1287/mnsc.2021.4036
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    References listed on IDEAS

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