Effects of Monetary Sanctions on Behavior: evidence from library fines

Matheus A Albergaria

Abstract


Discussions comparing fines and imprisonment suggest that, under certain conditions, the former might be preferred over the latter, especially in terms of economic efficiency. The present paper contributes to this debate by studying the behavioral responses to monetary sanctions in a unique field setting: a university library. I study the behavior of library users during a ten-year period (2005-2015), covering more than 800,000 daily transactions. In doing so, I want to answer the following question: how does the introduction of a monetary sanction affect observed behavior in this specific setting? By exploiting variation in the introduction of a monetary sanction (fine) in the library, I find that such an introduction reduced users’ delays, as predicted by standard models of law enforcement. However, when analyzing the dynamic effects of such an introduction, I find that the fine lost efficacy over time, since its nominal value remained the same after its instauration. These results not only have important implications for the design of sanctioning systems, but they also shed light on related issues, such as incentives, social norms, and corruption in real-world settings.


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DOI: http://dx.doi.org/10.31501/ealr.v10i3.9661

Economic Analysis of Law Review  -  ISSN 2178-0587

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