In order to analyze the severity of sentencing, and to show how the probabilistic interpretation of strategic behavior can be tricky, this paper uses the crime strategic model (inspection game) proposed by Tsebelis. This model shows that any attempts to increase the severity of punishment will...

Why does the government not defect from the constitution? This article focuses on the dynamic restraints the government faces under the rule of law: violations against unconstitutional laws are not punished under the constitution. If a violating government cannot commit itself never to reinstall...

Why do rulers play by the rules? We show that the legality requirement under the rule of law implements an endogenous enforcement mechanism supporting constitutionality. Agents which do not obey unconstitutional legal norms are not sanctioned under constitutional rule. A principal who defects...

Laws express rules of conduct ('obligations') enforced by the means of penalties and rewards ('incentives'). The role of incentives in shaping individual behaviour has been largely analysed in the traditional economic literature. On the contrary, very little is known about the specific role of...

The purpose of this study is to experimentally investigate an analytical model of tax compliance, assuming a game-theoretic situation between a taxpayer and a tax auditor. Specifically, we focus on the following three research questions. First, would the taxpayer's behavior change if the tax...

We present a simple model to analyze the efficacy of endogenous crackdowns, i.e., sudden and dramatic increases of audit probability triggered by a low level of compliance. We test this model experimentally. Our results show that: (a) compliance reacts quickly to the occurrence of crackdowns;...