We develop a theoretical model to identify and compare partial and equilibrium effects of uncertainty and the magnitude of fines on punishment and deterrence. Partial effects are effects on potential violators' and punishers' decisions when the other side's behavior is exogenously given....

Based on a simple theoretical model, we use a laboratory experiment to test the impacts of uncertainty, the magnitude of fines and aversion against making type-I and type-II errors on legal decision making. Measuring uncertainty as the noise of a signal on the defendant's guilt observed by legal...

In case of a conflict of interest between principals and agents, laboratory experiments have demonstrated the existence of a "control premium", i.e. a willingness to accept lower expected payoffs for keeping control. We analyze delegation decisions in a pure moral hazard setting without...

In 2003, Germany switched from a fee-for-service (FFS) system to a fixed-fee prospective payment system (PPS) in reimbursement schemes for hospitals. In close cooperation with two hospitals in Germany we have compiled a data set to analyze the impacts of the new system on the length of stay in...

We analyze the impact of mandatory deferral of bankers' compensation in a dynamic model with heterogenous banks. Shareholders are protected by limited liability, and hence implement excessive risk-taking of bank mangers by offering high powered incentive schemes. Deferral of payments reduces...