Optimal prevention when informal penalties matters: The case of medical errors

2007/5: Author: Grepperud S, Institute of Health Management and Health Economics University of Oslo, and the HERO programme. (PDF)

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Individuals often respond with strong emotions to being penalised. Such responses suggest that informal penalties are important and play a role in creating deterrence. In this paper informal penalties are analysed in the context of medical errors. The introduction of informal penalties, if dependent upon formal ones, implies that: (i) the optimal enforcement regime becomes more lenient, and in some cases the lack of formal punishment is preferred, (ii) the first-best solution becomes unattainable, (iii) liability rates and formal penalty level are no longer perfect deterrence substitutes. In addition, powers of informal penalties provide a rationale for administrative sanctions (informal criticism, reprimands and warnings).

ISSN 1890-1735
ISBN 82-7756-177-6

Publisert 25. mai 2011 16:21 - Sist endret 3. okt. 2011 13:14