An Evolutionary Model of For-profit Enforcement and Pervasive Law-violation

摘要

Pervasive law-violation, the committing of certain illegal behavior by most individuals, exists in many fields, such as the overloading of trucks, pollution-discharge of chemical companies, etc., in some societies especially developing economies. For-profit enforcement is considered to be one possible reason for this phenomenon. This causality is articulated using an evolutionary model. There are two types of agents in this model, the first type is civilians who are bounded rational, and decide on whether to abide a law by learning from each other in a short time horizon; the other type is the law enforcement agency, who has higher rationality, and will choose optimal inspection frequency and punishment strength to maximize their payoff in a long time horizon, with the knowledge of how the civilians update their strategies. It is revealed that, if the enforcement agency can obtain benefit from the fines collected in the enforcement, their optimal choice is not to enforce the law strictly, but to adopt a moderate inspection frequency and punishment strength, because this induces more civilians to violate the law and brings the agency higher income. However, this intended lenient enforcement leads to a pervasive law-violation in the society.