We develop a model of intergenerational co-residence and transfers within the family in a setting of asymmetric information. Following an exchange motive, altruistic parents receive services from their children, who may make them financial gifts in return. However, parents do not know the...

The economic literature on enforcement is generally pessimistic concerning the use of legal aid. In this paper we show that legal aid can be a part of optimal law enforcement. The rationale behind our result is that with legal aid, in a system with legal or judicial error both guilty and...

There is a belief that imperfect information about the probability of punishment and severity of punishment weakens deterrence. The author assesses this belief concerning two specific implications: nonoptimal deterrence and severity of punishment. He concludes that it may well be the case that...