Inspection Game
Discussion Paper No. 2010‐21
Daniele Nosenzo, Theo Offerman, Martin Sefton and Ailko van der Veen December 2010
Inducing Good Behavior: Bonuses versus Fines in Inspection Games
CeDEx Discussion Paper Series
ISSN 1749 ‐ 3293
The Centre for Decision Research and Experimental Economics was founded in 2000, and is based in the School of Economics at the University of Nottingham. The focus for the Centre is research into individual and strategic decision‐making using a combination of theoretical and experimental methods. On the theory side, members of the Centre investigate individual choice under uncertainty, cooperative and non‐cooperative game theory, as well as theories of psychology, bounded rationality and evolutionary game theory. Members of the Centre have applied experimental methods in the fields of public economics, individual choice under risk and uncertainty, strategic interaction, and the performance of auctions, markets and other economic institutions. Much of the Centre's research involves collaborative projects with researchers from other departments in the UK and overseas. Please visit http://www.nottingham.ac.uk/economics/cedex/ for more information about the Centre or contact Sue Berry Centre for Decision Research and Experimental Economics School of Economics University of Nottingham University Park Nottingham NG7 2RD Tel: +44 (0)115 95 15469 Fax: +44 (0) 115 95 14159 sue.berry@nottingham.ac.uk The full list of CeDEx Discussion Papers is available at http://www.nottingham.ac.uk/economics/cedex/papers/index.html
Inducing Good Behavior: Bonuses versus Fines in Inspection Games by Daniele Nosenzo * , Theo Offerman ** , Martin Sefton* and Ailko van der Veen** 10 December 2010
Abstract We examine the effectiveness of bonuses and fines in an ‘inspection game’ where an employer can
Daniele Nosenzo, Theo Offerman, Martin Sefton and Ailko van der Veen December 2010
Inducing Good Behavior: Bonuses versus Fines in Inspection Games
CeDEx Discussion Paper Series
ISSN 1749 ‐ 3293
The Centre for Decision Research and Experimental Economics was founded in 2000, and is based in the School of Economics at the University of Nottingham. The focus for the Centre is research into individual and strategic decision‐making using a combination of theoretical and experimental methods. On the theory side, members of the Centre investigate individual choice under uncertainty, cooperative and non‐cooperative game theory, as well as theories of psychology, bounded rationality and evolutionary game theory. Members of the Centre have applied experimental methods in the fields of public economics, individual choice under risk and uncertainty, strategic interaction, and the performance of auctions, markets and other economic institutions. Much of the Centre's research involves collaborative projects with researchers from other departments in the UK and overseas. Please visit http://www.nottingham.ac.uk/economics/cedex/ for more information about the Centre or contact Sue Berry Centre for Decision Research and Experimental Economics School of Economics University of Nottingham University Park Nottingham NG7 2RD Tel: +44 (0)115 95 15469 Fax: +44 (0) 115 95 14159 sue.berry@nottingham.ac.uk The full list of CeDEx Discussion Papers is available at http://www.nottingham.ac.uk/economics/cedex/papers/index.html
Inducing Good Behavior: Bonuses versus Fines in Inspection Games by Daniele Nosenzo * , Theo Offerman ** , Martin Sefton* and Ailko van der Veen** 10 December 2010
Abstract We examine the effectiveness of bonuses and fines in an ‘inspection game’ where an employer can