Does Punishment Matter? A Refinement of the Inspection Game

Pradiptyo, Rimawan

doi:10.2202/1555-5879.1099

Cited by 22 publications

(17 citation statements)

References 31 publications

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“…8 An extension of this framework to consider more general compliance tests, such as adhering to a specified standard for seed purity or a residue limit, would require embedding a hypothesis-testing framework akin to inspection games for material accountancy (e.g. 9 Pradiptyo (2007) notes that inspection games with mixed-strategy equilibria can have punishment costs being irrelevant for the inspectee's optimal strategy. 9 Pradiptyo (2007) notes that inspection games with mixed-strategy equilibria can have punishment costs being irrelevant for the inspectee's optimal strategy.…”

Section: One-shot Biosecurity Inspection Game (I) Game Descriptionmentioning

confidence: 99%

Designing Biosecurity Inspection Regimes to Account for Stakeholder Incentives: An Inspection Game Approach

Rossiter

Hester

2017

Economic Record

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We investigate the potential for biosecurity regulators to design inspection regimes that reduce intervention and encourage importers to decrease the likelihood of biosecurity risk material being present in consignments. The interaction between a biosecurity regulator and a vertically integrated importer is framed as an inspection game. Our principal focus is a dynamic version of the game, which we use to assess whether regimes based on past compliance can encourage behaviours consistent with the regulatory objective. Our results suggest appropriate candidates for compliance-based inspection regimes are goods where there is access to cost-effective 'fixed' abatement technologies, and those with high costs associated with being inspected or failing inspection.*The authors thank Simon Loertscher, Peter Bardsley and Gary Stoneham for their comments on earlier versions of this work and the assistance provided by Australian Government Department of Agriculture and Water Resources staff members, particularly Christina Aston and Jessica Sibley, with other parts of the broader project. Tom Wilkening and Simon Angus provided much appreciated advice on computational aspects associated with this paper. Discussions with Lana Friesen on alternative regulatory approaches using tournaments and Andrew Robinson on the continuous sampling plan algorithms are also appreciated.

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Section: One-shot Biosecurity Inspection Game (I) Game Descriptionmentioning

confidence: 99%

Designing Biosecurity Inspection Regimes to Account for Stakeholder Incentives: An Inspection Game Approach

Rossiter

Hester

2017

Economic Record

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“…Furthermore, divergences between results of the simplified model and reality can be explained by players' bounded rationality [6]. It is interesting to note that the situation where one centralised inspection agency inspects compliance of numerous agents fits Becker's model much better than Tsebelis' [15].…”

Section: Game Theory and Inspection Gamesmentioning

confidence: 99%

Inspecting compliance to many rules: An agent-based model

Smojver¹

2016

: Interdiscip. Descr. Complex Syst.

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Ever increasing scope and complexity of regulations and other rules that govern human society emphasise importance of the inspection of compliance to those rules. Often-used approaches to the inspection of compliance suffer from drawbacks such as overly idealistic assumptions and narrowness of application. Specifically, inspection models are frequently limited to situations where inspected entity has to comply with only one rule. Furthermore, inspection strategies regularly overlook some useful and available information such as varying costs of compliance to different rules.This article presents an agent-based model for inspection of compliance to many rules, which addresses abovementioned drawbacks. In the article, crime economic, game-theoretic and agent-based modelling approaches to inspection are briefly described, as well as their impact on the model. The model is described and simulation of a simplified version of the model is presented. The obtained results demonstrate that inspection strategies which take into account rules' compliance costs perform significantly better than random strategies and better than cycle-based strategies. Additionally, the results encourage further, wider testing and validation of the model.

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“…Interestingly, while based on the same fundamental mechanism as the inspection game, Graetz et al (1986) and Dionne et al (2009) have emerged in separate literatures, the former as part of the tax evasion literature and the latter as part of the insurance fraud literature. Recent contributions to the inspection game literature are Andreozzi (2004), Friehe (2008) and Pradiptyo (2007). Basu et al (1992), Besley and Mclaren (1993), Mookherjee and Png (1995) and Marjit and Shi (1998) develop corruption models, in which detection is endogenised, although not in the same way as in the inspection game.…”

Section: Related Researchmentioning

confidence: 99%

Endogenous Detection of Collaborative Crime: The Case of Corruption

Spengler

2014

Review of Law &Amp; Economics

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We construct a one-shot corruption game with three players, a briber who can decide to bribe or not, an official who can reciprocate or not and an inspector who can decide to inspect or not. We employ four penalties that can be distributed asymmetrically, making it possible to punish bribing and bribe-taking as well as reciprocating and receiving reciprocation to different degrees. Penalties apply if corruption is detected. The probability of detection is endogenised, as it depends on inspection. The model differs from other inspection games in that the offence (corruption) can only be completed through a joint effort of the two offending players. This leads to surprising results, especially in conjunction with asymmetric penalties. First, in contrast to Tsebelis' results, we find that, with endogenous detection, higher penalties do reduce the overall rate of offence. Second, this result holds only if the penalty for reciprocating on the official is raised. Surprisingly, and unlike other asymmetric penalty prescriptions in the corruption literature, higher penalties on the briber have the opposite effect. They may reduce the probability of bribery, but they also increase the probability of reciprocation to the extent that the overall probability of reciprocated bribery is increased.

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Does Punishment Matter? A Refinement of the Inspection Game

Cited by 22 publications

References 31 publications

Designing Biosecurity Inspection Regimes to Account for Stakeholder Incentives: An Inspection Game Approach

Designing Biosecurity Inspection Regimes to Account for Stakeholder Incentives: An Inspection Game Approach

Inspecting compliance to many rules: An agent-based model

Endogenous Detection of Collaborative Crime: The Case of Corruption

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