Abstract

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.

Submitted: December 12, 2007 · Accepted: May 14, 2008 · Published: March 5, 2009

Recommended Citation

Tabbach, Avraham D. (2009) "Does a Rise in Maximal Fines Increase or Decrease the Optimal Level of Deterrence?," Review of Law & Economics: Vol. 5 : Iss. 1, Article 3.
DOI: 10.2202/1555-5879.1245
Available at: http://www.bepress.com/rle/vol5/iss1/art3