Criminals often engage in costly avoidance to lower their probability of being detected and sanctioned. Such avoidance, in turn, affects the optimal enforcement policy. This paper studies the impact of avoidance on a specific type of enforcement policy - the standard of proof. We show that when...

This paper examines optimal fines in a regulatory framework where the regulator can choose either surprise or announced inspections to monitor a firm for compliance. The firm can invest in detection avoidance, but it receives a fine if the regulator discovers that it is non-compliant. In the...