Does a Rise in Maximal Fines Increase or Decrease the Optimal Level of Deterrence?

The economic literature on crime and law enforcement shows that the optimal level of deterrence increases when maximal fines rise. This paper shows that this view may be incorrect. In particular, if the gains from crime can be disgorged, as is usually the case in reality, then increasing the maximal...

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Bibliographic Details
Published inReview of law & economics Vol. 5; no. 3
Main Author Tabbach, Avraham D
Format Journal Article
LanguageEnglish
Published Berkeley Electronic Press 2009
SeriesReview of Law & Economics
Subjects
Crime
Deterrence
Disgorgement of Illegal Gains
Law Enforcement
Maximal Fines
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Summary:The economic literature on crime and law enforcement shows that the optimal level of deterrence increases when maximal fines rise. This paper shows that this view may be incorrect. In particular, if the gains from crime can be disgorged, as is usually the case in reality, then increasing the maximal fine may reduce the optimal level of deterrence. This may happen if offenders' wealth is less than the monetary value of the harm that offenders cause.
ISSN:1555-5879
1555-5879