Niels Johannesen, Tim Stolper, 02 July 2017

Whistleblowing should improve immoral behaviour beyond the perpetrators exposed, according to standard economic theories of crime, but this has not always been the case. This column uses the example of offshore banking to examine whether whistleblowing successfully deters future immoral or criminal behaviour. Based on the evidence of the first whistleblowing event relating to tax evasion in 2008, an increase in the perceived probability of a leak should be expected to deter the demand and supply of criminal offshore banking services and reduce the earnings of offshore banks.

Yiqun Chen, Frank Sloan, 15 December 2014

Driving while intoxicated is a serious problem in the US. What policymakers disagree about is how best to discourage drunk driving. This column argues that the perceived risk for detection has a deterrent effect on drunk driving. Harsher sanctions do not convey the desired effect if the perceived risk for detection is low. The best policy thus should increase the probability of detection or manipulate peoples’ beliefs for such a risk.

Tomaso Duso, Klaus Gugler, Florian Szücs, 26 January 2014

In 2004, European merger law was substantially revised, with the aim of achieving a ‘more economic approach’ to merger policy. This column discusses a recent empirical assessment of European merger cases before and after the reform. Post-reform, the outcomes of merger cases became more predictable, and the Commission prohibited fewer pro-competitive mergers. While there remains room for improvement in several aspects, the reform seems to have been successful in bringing European competition law closer to economic principles.

Francesco Drago, Roberto Galbiati, Pietro Vertova, 30 July 2007

Among the many factors that influence the decision to commit a crime, public law and sanctioning activity play a crucial role. The authors of CEPR DP6401 find that among their dataset in Italy an additional month of expected punishment reduces the propensity to recommit a crime by 1.24%.

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