It is a widely accepted conclusion of the economic literature on deterrence that nonmonetary sanctions should be introduced only when monetary fines have been used up to their maximum extent. However, this conclusion is at odds with what is commonly observed e.g. in the case of deterrence of...

It is a widely accepted conclusion of the economic literature on optimal law enforcement that nonmonetary sanctions should be introduced only when fines have been used up to their maximum extent. In this paper it is shown that when the sanctioning policy conveys information about the harmfulness...