Garoupa, NunoUniversitat Pompeu Fabra. Departament d'Economia i Empresa2017-07-262017-07-262000-04-01European Economic Review, 45, 9, (2001) pp. 1765-1771http://hdl.handle.net/10230/691The economic literature on crime and punishment focuses on the trade-off between probability and severity of punishment, and suggests that detection probability and fines are substitutes. In this paper it is shown that, in presence of substantial underdeterrence caused by costly detection and punishment, these instruments may become complements. When offenders are poor, the deterrent value of monetary sanctions is low. Thus, the government does not invest a lot in detection. If offenders are rich, however, the deterrent value of monetary sanctions is high, so it is more profitable to prosecute them.application/pdfengL'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commonsinfo:eu-repo/semantics/workingPapercrimeprobability and severity of sanctionslaw enforcementBusiness Economics and Industrial Organizationinfo:eu-repo/semantics/openAccess