Payment Evasion

Stefan Buehler, Daniel Halbheer and Michael Lechner

No 5342, CESifo Working Paper Series from CESifo

Abstract: This paper models payment evasion as a source of profit by letting the firm choose the purchase price and the fine imposed on detected payment evaders. For a given price and fine, the consumers purchase, evade payment, or choose the outside option. We show that payment evasion leads to a form of second-degree price discrimination in which the purchase price exceeds the expected fine faced by payment evaders. We also show that higher fines do not necessarily reduce payment evasion. Using data on fare dodging on public transportation, we quantify expected fines and payment evasion.

Keywords: pricing; fine; price discrimination; deterrence (search for similar items in EconPapers)
JEL-codes: L12 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp5342.pdf (application/pdf)

Related works:
Journal Article: Payment Evasion (2017)
Working Paper: Payment Evasion (2015)
Working Paper: Payment Evasion (2014)
Working Paper: Payment Evasion (2014)
Working Paper: Payment Evasion (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_5342

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().