Efficient Institutions and Effective Deterrence: On Timing and Uncertainty of Formal Sanctions
38 Pages Posted: 31 Dec 2018 Last revised: 13 Feb 2021
Date Written: February 13, 2021
Economic theory suggests that the deterrence of deviant behavior is driven by a combination of severity and certainty of punishment. This paper presents the first controlled experiment to study a third important factor that has been mainly overlooked: the swiftness of formal sanctions. We consider two dimensions: the timing at which the uncertainty about whether one will be punished is dissolved and the timing at which the punishment is actually imposed, as well as the combination thereof. By varying these dimensions of delay systematically, we find a surprising non-monotonic relation with deterrence: either no delay (immediate resolution and immediate punishment) or maximum delay (both resolution and punishment as much as possible delayed) emerge as most effective at deterring deviant behavior and recidivism. Our results yield implications for the design of institutional policies aimed at mitigating misconduct and reducing recidivism.
Keywords: Deterrence, Institutions, Punishment, Swiftness, Uncertainty
JEL Classification: C91, D02, D81, K42
Suggested Citation: Suggested Citation