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The Desirability of forgiveness in regulatory enforcement
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The Desirability of forgiveness in regulatory enforcement
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Journal Article
The Desirability of forgiveness in regulatory enforcement
2014
Overview
I present a model that explains two common features of regulatory enforcement: selective forgiveness of noncompliance, and the collection of information on a firm’s compliance activities and not just its compliance status. I show that forgiving noncompliance is optimal if the information on a firm’s compliance activities constitutes sufficiently strong evidence of the firm having exerted a high level of compliance effort. The key benefit of forgiving noncompliance is a reduction in the probability with which the firm needs to be monitored.
Publisher
Springer US,Springer Nature B.V
Subject
/ Studies
