Suchergebnisse

Abstract
We study the optimal use of imprisonment when enforcement efforts are general (i.e. when the probability of detection is common for a range of acts). In contrast to the conventional wisdom that optimal imprisonment rises with the act's harmfulness and is equal to the maximum level only for the most harmful acts, we show that – when the distribution of criminal benefits exhibits a standard monotone hazard rate – optimal imprisonment can only be zero or maximal. Thus, having general as opposed to specific enforcement effort does not alter the fact that only extreme sanction levels should optimally be employed.

AbstractThis paper analyzes liability rules when consumers and third parties/the environment incur harm. Expected harm is convex in the level of output and modeled as a power function. We show that the social ranking of liability rules previously established for the case in which only consumers suffer harm (Strict Liability dominates No Liability and Negligence) may be reversed if harm to third parties or the environment is sufficiently important.