Economic theory suggests that the deterrence of deviant behavior is driven by a combination of severity and certainty of punishment. This paper presents the first controlled experiment to study a third important factor that has been mainly overlooked: the swiftness of formal sanctions. We...

This paper presents a model of Rule of Law in which a continuum of agents plays against the State for the appropriation of the economic assets of a stylised economy. The model shows how each agent can either challenge the State or acquiesce, with the latter having the choice of either protecting...

Economic theory suggests that the deterrence of deviant behavior is driven by a combination of severity and certainty of punishment. This paper presents the first controlled experiment to study a third important factor that has been mainly overlooked: the swiftness of formal sanctions. We...

Compliance inspection is a detailed examination procedure for determining compliance of a particular person or organisation with the given set of provisions (in regulations, standards, business rules, etc.). The optimal selection of persons or organisations and provisions for inspection is one...

This paper provides a comprehensive analysis regarding strategic interaction under expectation-based loss-aversion. First, we develop a coherent framework for the analysis by extending the equilibrium concepts of Koszegi and Rabin (2006, 2007) to strategic interaction and demonstrate how to...

Betrayal aversion has been operationalized as the evidence that subjects demand a higher risk premium to take social risks compared to natural risks. This evidence has been first shown by Bohnet and Zeckhauser (2004) using an adaptation of the Becker-DeGroot-Marshak mechanism (BDM, Becker et al....

Beauchêne, Li, and Li (2019) show that ambiguous persuasion leads to new interim equilibria with higher ex ante value for the Sender compared to the standard Bayesian persuasion. However, in their equilibrium the strategy of the Receiver is in general not ex ante optimal. This note, defines...