41 Pages Posted: 13 Jun 2011 Last revised: 16 Sep 2013
Date Written: June 8, 2011
This article offers a new mechanism of law enforcement, combining sanctions and rewards into a scheme of “reversible rewards.” A law enforcer sets up a pre-committed fund and offers it as reward to another party to refrain from violation. If the violator turns down the reward, the enforcer can use the money in the fund for one purpose only - to pay for punishment of the violator. The article shows that this scheme doubles the effect of funds invested in enforcement, and allows enforcers to stop violations that would otherwise be too costly to deter. It argues that reversible rewards could be used to bolster enforcement in selective areas of private and public law, and could also be applied strategically in litigation.
Suggested Citation: Suggested Citation
Ben-Shahar, Omri and Bradford, Anu, Reversible Rewards (June 8, 2011). University of Chicago Law & Economics, Olin Working Paper No. 557. Available at SSRN: https://ssrn.com/abstract=1864043 or http://dx.doi.org/10.2139/ssrn.1864043