Working Paper: NBER ID: w3822
Authors: Louis Kaplow; Steven Shavell
Abstract: Self-reporting -- the reporting by parties of their own behavior to an enforcement authority -- is a commonly observed aspect of law enforcement, as in the context of environmental and safety regulation. We add self-reporting to the model of the control of harmful externalities through probabilistic law enforcement. Optimal self-reporting schemes are characterized and are shown to offer two advantages over schemes without self-reporting: enforcement resources are saved because individuals who are led to report harmful acts need not be identified; risk is reduced because individuals bear certain sanctions when they report their behavior, rather than face uncertain sanctions.
Keywords: self-reporting; law enforcement; harmful externalities; probabilistic enforcement
JEL Codes: K42; H11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Self-reporting (C80) | reduced enforcement costs (K40) |
| Self-reporting (C80) | risk reduction for individuals (G52) |
| Self-reporting (C80) | behavioral outcomes (same as non-self-reporting schemes) (D91) |