Productive and Dynamic Inefficiencies of Moderate Regulatory Sanctions
7 Pages Posted: 19 Mar 2019 Last revised: 7 May 2019
Date Written: March 18, 2019
This article shows that moderate regulatory sanctions can generate subtle problems not apparent in simple enforcement models. Assuming that firms may ultimately face different noncompliance detection probabilities, we highlight that moderate sanctions may conflict with aspects of both static and dynamic efficiency.
Keywords: Regulation, Sanctions, Compliance, Technology
JEL Classification: K42, L51
Suggested Citation: Suggested Citation