Abstract
This paper studies the role of commitment in the design of enforcement mechanisms when enforcement can remedy harm from non-compliance. We consider a game between an enforcement authority ("enforcer") and an offender in which either the enforcer or the offender may act as a Stackelberg leader. The enforcer must choose whether to move first by committing to an enforcement strategy - thereby directly affecting the level of non-compliance; or rather let the offender make the first move - thereby calibrating the level of enforcement to the actual level of non-compliance. We show that the value of commitment to the enforcer depends on each player's responsiveness to a change in the other player's strategy choice. Commitment to an enforcement strategy is thus not always in the enforcer's interest.
Original language | English |
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Article number | 18 |
Journal | B.E. Journal of Theoretical Economics |
Volume | 12 |
Issue number | 1 |
DOIs | |
State | Published - 2012 |
Keywords
- Enforcement
- Stackelberg
- inspection game
- strategic complements
- strategic substitutes