Efficient Institutions and Effective Deterrence: On Timing and Uncertainty of Punishment
37 Pages Posted: 31 Dec 2018 Last revised: 17 Aug 2019
Date Written: August 16, 2019
This paper presents the first controlled economic experiment to study celerity, i.e. the effectiveness of swiftness of punishment in reducing illicit behavior. We consider two dimensions: timing of punishment and timing of the resolution of uncertainty regarding the punishment. We find a surprising u-shaped relation between deterrence and the delays of punishment and uncertainty resolution. Institutions that either reveal detection and impose punishment immediately or maintain uncertainty about the state of detection and impose punishment sufficiently late are equally effective at deterring illicit behavior. Our results yield strong implications for the design of institutional policies to mitigate misconduct and reduce recidivism.
Keywords: Deterrence, Institutions, Punishment, Swiftness, Uncertainty
JEL Classification: C91, D02, D81, K42
Suggested Citation: Suggested Citation