Welfare enhancing regulation exemptions |
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Authors: | Murat C Mungan |
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Institution: | Florida State University, College of Law, 425 W. Jefferson Street, Tallahassee, FL 32306-1601, United States |
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Abstract: | Sanctions for regulation violations are used to deter conduct which could potentially result in great social harms. This practice over-deters low-risk entities and under-deters high-risk entities, which leads to social losses. This paper analyzes whether and how such social losses can be mitigated. I show that this can be achieved by allowing regulatees to purchase passes exempting them from regulations at appropriate prices, although they remain liable for any harm they cause. |
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Keywords: | Exemptions Regulations Optimal deterrence |
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