imposed on detected payment evaders. For a given price and fine, the consumers purchase, evade payment, or choose the outside …This paper models payment evasion as a source of profit by letting the firm choose the purchase price and the fine … exceeds the expected fine faced by payment evaders. We also show that higher fines do not necessarily reduce payment evasion …

standard theory predicts no difference in behavior, we find that potential injurers invest substantially more money in accident … prevention when they are subject to damages instead of a fine. We discuss possible behavioral channels that may explain our …