Fines, Appeals and Liability in Public Enforcement with Stochastic Damage and Asymmetric Information

Datos Bibliográficos

ID9727287
AutoresRobert Innes (0000-0002-0805-4113, University of Arizona, autor de correspondencia)
Año2004
Volumen71
Número283
Páginas391-416
Fecha de publicación2004-08-01
Open AccessSí
TipoARTICLE
RevistaEconomica (JOURNAL)
Identificadores de la revistaISSN: 0013-0427 • E-ISSN: 1468-0335
EditorialWiley (PUBLISHER • GB)
DOI10.1111/j.0013-0427.2004.00377.x
OpenAlexW2002361967
IdiomaEN
Citas recibidas1
Referencias citadas28

This paper studies an enforcement game between a regulator and firms that can cause harmful accidents. The distribution of potential accident damage is private information to the firms, and realized damage can be observed only at the cost of going to court. Under conditions described in the paper, an optimal policy involves the separate assessment of regulatory/settlement fines and court liability. In this optimum, injurers self‐select by appealing (or not) to the court process; liability takes a ‘threshold’ form, assessing maximal liability when damages are high and zero liability otherwise; and, vis‐à‐vis a first‐best, some firms are over‐deterred—and others under‐deterred—from having accidents

Actuarial science · Business · Closing (real estate) · Computer security · Damages · Enforcement · Liability · Payment · Political science · Private information retrieval · Settlement (finance) · Strict liability · Computer Science · Finance · Law · Law, Economics, and Judicial Systems · Legal and Constitutional Studies · Regulation and Compliance Studies

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