Counter-Cyclical Enforcement of Corporate Law.

Research output: Contribution to journalArticle

Abstract

Corporate and securities laws are seen as mitigating corporate fraud by manipulating the incentives of agents: presenting corporate agents with a probability of being caught and punished if they commit fraud. This Article suggests that the same laws also affect corporate fraud in a significant but unappreciated manner, by manipulating the perceptions of the principals: affecting the principals' efforts in monitoring the agents by making them perceive the risk of fraud as more or less likely.
Original languageEnglish (US)
Pages (from-to)1-33
Number of pages33
JournalYale journal on regulation
Volume25
Issue number1
StatePublished - Feb 1 2008

Keywords

  • optimal deterrence
  • optimal enforcement
  • cognitive bias
  • behavioral law & economics
  • corporate fraud
  • Monetary policy
  • central bank

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