NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Optimal Sanctions When Individuals are Imperfectly Informed About the Probability of Apprehension

Lucian Arye Bebchuk, Louis Kaplow

NBER Working Paper No. 4079 (Also Reprint No. r1754)
Issued in May 1992
NBER Program(s):   LE

This paper considers optimal enforcement when individuals may be imperfectly informed about the probability of apprehension. When individuals are perfectly informed, optimal sanctions are maximal because, as Gary Becker (1968) suggested, society can economize on enforcement resources by reducing the probability of apprehension while increasing sanctions. But when individuals imperfectly observe the probability of apprehension, it may be optimal to apply lower sanctions while expending more enforcement resources.

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Document Object Identifier (DOI): 10.3386/w4079

Published: The Journal of Legal Studies, Vol. XXI, No. 2, pp. 365-370 (June 1992).

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