Commitment versus flexibility in enforcement games

Shmuel Leshem*, Avraham D. Tabbach

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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 languageEnglish
Article number18
JournalB.E. Journal of Theoretical Economics
Volume12
Issue number1
DOIs
StatePublished - 2012

Keywords

  • Enforcement
  • Stackelberg
  • inspection game
  • strategic complements
  • strategic substitutes

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