We study financial risk taking via standard and sophisticated financial investments. Using survey data on 2,047 individuals, we find that standard investments are strongly associated with both actual and perceived financial literacy for men, but only with actual literacy for women. Sophisticated...

Assuming that the willingness to find a potentially innocent defendant guilty is decreasing in punishments, we derive two results: Deterrence is decreasing when punishments are too high, and deterrence maximizing punishments tend to increase in the quality of legal systems.