Regulating harmless activity to fight crime |
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Authors: | Florian Baumann Tim Friehe |
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Institution: | 1. Düsseldorf Institute of Competition Economics, University of Düsseldorf, Universit?tsstr. 1, 40225, Düsseldorf, Germany 2. Center for Advanced Studies in Law and Economics, University of Bonn, Adenauerallee 24-42, 53113, Bonn, Germany 3. CESifo, Munich, Germany
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Abstract: | This paper establishes that regulating harmless activity can be an effective instrument of law enforcement when the harmless activity and the harmful activity are interdependent. This type of regulation is not without cost, as it distorts the individual choices made by both law-abiding and non-law-abiding individuals. However, it can be socially advantageous when the impact on welfare resulting from changes in the choices of offenders dominates the impact of changes in non-offenders’ decisions; in addition, increasing deterrence by other means (such as raising the probability of detection or the magnitude of sanctions) can incur much higher costs. |
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