Chapter

Do People Want Optimal Deterrence?

Cass R. Sunstein, David A. Schkade and Daniel Kahneman

in Punitive Damages

Published by University of Chicago Press

Published in print April 2002 | ISBN: 9780226780146
Published online March 2013 | e-ISBN: 9780226780160 | DOI: http://dx.doi.org/10.7208/chicago/9780226780160.003.0012
Do People Want Optimal Deterrence?

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This chapter explores whether people seek optimal deterrence, as this idea is understood in the economic analysis of law. The basic finding is that they do not. People appear to reject the view, widespread within economic analysis, that punishment should be increased beyond compensation where the probability of detection is low, and that compensation is adequate where the probability of detection is 100%. The central finding of this study should be of interest both to those who accept and to those who reject the economic approach to punishment. The first and principal study focuses on people's attention on the probability that an objectionable action will be detected and punished, and examined whether they used this information in determining punitive damages. The second study asks the optimal deterrence question more directly. Respondents are presented with the question of whether it is proper for a judge to refuse to allow punitive damages when the defendant is certain to be caught and required to pay compensation (i.e., the probability of detection is 100%).

Keywords: optimal deterrence; economic analysis; punishment; compensation; probability of detection; punitive damages

Chapter.  3717 words. 

Subjects: Company and Commercial Law

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