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On the interplay of public and private law enforcement with multiple victims

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  • Eberhard Feess

    (Frankfurt School of Finance and Management)

Abstract

We analyze the interplay of public and private law enforcement when an infringement affects multiple parties, and where detection by just one party is sufficient to avoid the harm. Detection causes a positive externality on other victims, so that private effort incentives are inefficiently low. The public agency has might reduce its own inspection frequency in order to increase the number of private inspections (Peltzman-effect). However, due to the private parties’ incentive compatibility constraints, the agency can only trigger inspection by one more private party compared to the number of inspections when itself inspects with full frequency. Inspecting with full frequency is more likely to be second-best when the number of private parties affected is high.

Suggested Citation

  • Eberhard Feess, 2015. "On the interplay of public and private law enforcement with multiple victims," European Journal of Law and Economics, Springer, vol. 39(1), pages 79-95, February.
    • Handle: RePEc:kap:ejlwec:v:39:y:2015:i:1:d:10.1007_s10657-014-9457-9
    DOI: 10.1007/s10657-014-9457-9
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    References listed on IDEAS

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    Cited by:

    1. Grajzl, Peter & Baniak, Andrzej, 2018. "Private enforcement, corruption, and antitrust design," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 284-307.

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    More about this item

    Keywords

    Public and private law enforcement; Peltzman-effect; Law enforcement and externalities;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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