Deterrence through word of mouth

Arbeitspapier

The deterrent effect of law enforcement rests on the link between the actual and the perceived detection risk. We study the role of word of mouth for this linkage. Our approach makes use of micro data on compliance with TV license fees allowing us to distinguish between households who have been subject to enforcement and those who have not. Exploiting local variation in field inspectors' efforts induced by snowfall, we find a striking response of households to increased enforcement in their vicinity, with compliance rising significantly among those who had no interaction with inspectors. As we can exclude other channels of information transmission, our finding establishes a substantial deterrent effect mediated by word of mouth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2549

Classification and Topics

• Classification: Wirtschaft ; Illegal Behavior and the Enforcement of Law ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Subject: Deterrence ; law enforcement ; word of mouth ; Normbefolgung ; Rechtsdurchsetzung ; Virales Marketing ; Rundfunkfinanzierung ; Österreich

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Rincke, Johannes ; Traxler, Christian
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/26594
• Last update: 10.03.2025, 11:43 AM CET