Abstract
In many areas such as consumer law or competition law, legislators can opt between two alternative forms of sanctions to remedy wrongdoing: they can impose an infringer to pay either a fine or a compensation. There is a major research gap regarding the infringers’ reactions to the different forms of sanctions. This paper reports an experiment that investigated infringers’ willingness to pay compensation versus fines. Results show that regardless of victim characteristics (whether the victim is a company or an NGO), infringers are willing to pay higher amounts in compensation than in fines, view compensation as more fair and believe compensation is better able to restore their reputation. Compensation and fines did not differ in the extent to which they stimulated infringers’ willingness to take precautionary measures. Participants who inflicted harm to a company rather than an NGO, surprisingly viewed their sanction as more fair, irrespective of the type of sanction in place. Our findings highlight some important strengths of compensation from a infringer’s point of view that are to be weighed in the policy debate.
| Original language | English |
|---|---|
| Pages (from-to) | 63-80 |
| Number of pages | 18 |
| Journal | European Journal of Law and Economics |
| Volume | 53 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Feb 2022 |
Bibliographical note
Funding Information:The authors received funding from Kompetenzzentrum Nachhaltige Universität (KNU), University of Hamburg.
Funding Information:
We thank Kompetenzzentrum Nachhaltige Universität (KNU), University of Hamburg, for the financial support we received to carry out this experiment. We wish to thank Chris Reinders Folmer for helpful comments. The data is available via this link: https://osf.io/jh2ku/?view_only=2faea9422ba9488393282a2fddcc3202
Publisher Copyright:
© 2021, The Author(s).
Research programs
- SAI 2008-06 BACT