Payment Evasion - Alexandria

Item Type	Journal paper
Abstract	This paper shows that a firm can use the purchase price and the fine imposed on detected payment evaders to discriminate between unobservable consumer types. Assuming that consumers self-select into regular buyers and payment evaders, we show that the firm typically engages in second-degree price discrimination in which the purchase price exceeds the expected fine. In addition, we find that higher fines do not necessarily reduce payment evasion. We illustrate with data from fare dodging on public transportation.
Authors	Bühler, Stefan; Halbheer, Daniel & Lechner, Michael
Journal or Publication Title	The journal of industrial economics
Language	English
Keywords	Payment Evasion; Pricing; Fine; Self-Selection
Subjects	economics
HSG Classification	contribution to scientific community
HSG Profile Area	SEPS - Economic Policy
Refereed	Yes
Date	18 December 2017
Publisher	Wiley-Blackwell
Place of Publication	Oxford
Series Name	Economics Working Paper Series from University of St. Gallen, School of Economics and Political Science
Volume	65
Number	4
Page Range	804-832
Number of Pages	29
ISSN	0022-1821
ISSN-Digital	1467-6451
Publisher DOI	https://doi.org/10.1111/joie.12144
Official URL	http://onlinelibrary.wiley.com/doi/10.1111/joie.12...
Depositing User	Prof. Dr. Stefan Bühler
Date Deposited	24 Nov 2014 14:38
Last Modified	20 Jul 2022 17:23
URI:	https://www.alexandria.unisg.ch/publications/237130