The Vagueness of Limits and the Desired Distribution of Conducts

Abstract:     
This article examines the choice between rules and standards as a choice between precision and vagueness of a limit. The distinctive feature of limits is that they influence the conduct only of those individuals who would violate the limit. Vague limits allow a gradual transition from undeterred conducts to fully deterred conducts and, thus, provide customized compliance. The vagueness of a limit does not so much matter for the deterrence of a single individual, who can be driven to the same conduct with a variety of limit, precision, and penalty combinations, but for the overall distribution of conducts in a society. Unless the law seeks to concentrate or correlate conducts, limits should be vague in order to preserve the distribution of individuals? preferences. This conclusion directly supports vagueness which, despite its frequency, has been considered undesirable.

In addition to misplaced limits, three phenomena are identified that frustrate the concentrating role of limits: Fixed penalties, whether partially or completely fixed; imprecisely enforced limits; and procedure (trials with multiple steps). Increased uncertainty mitigates the dispersing effects of these everyday phenomena providing further justification for the frequency of vagueness.

JEL Classification: K0, K4

Accepted Paper Series