A Note on Optimal Public Enforcement with Settlements and Litigation Costs

This note reexamines the theory of optimal public enforcement when litigation costs are incurred if the defendant is prosecuted at trial, and when an out-of-court settlement is possible. Using a numerical example, it is shown that settlements and litigation costs can substantially alter the optimal system of public enforcement. It is also shown that failing to take these considerations into account can significantly lower the achievable level of social welfare.

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Year of publication:	1986-12
Authors:	Polinsky, A. Mitchell ; Rubinfeld, Daniel L.
Institutions:	National Bureau of Economic Research (NBER)

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Extent:	application/pdf
Series:	NBER Working Papers.
Type of publication:	Book / Working Paper
Notes:	LE published as Research in Law and Economics, vol. 12, pp. 1-8, 1989. Number 2114
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005714279