Journal of Economics

, Volume 113, Issue 1, pp 79–95 | Cite as

Regulating harmless activity to fight crime

  • Florian BaumannEmail author
  • Tim Friehe


This paper establishes that regulating harmless activity can be an effective instrument of law enforcement when the harmless activity and the harmful activity are interdependent. This type of regulation is not without cost, as it distorts the individual choices made by both law-abiding and non-law-abiding individuals. However, it can be socially advantageous when the impact on welfare resulting from changes in the choices of offenders dominates the impact of changes in non-offenders’ decisions; in addition, increasing deterrence by other means (such as raising the probability of detection or the magnitude of sanctions) can incur much higher costs.


Optimal law enforcement Legal activity Substitutes Complements 

JEL Classification

K42 H23 



We are grateful for the very helpful suggestions provided by two anonymous reviewers.


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Copyright information

© Springer-Verlag Wien 2013

Authors and Affiliations

  1. 1.Düsseldorf Institute of Competition EconomicsUniversity of DüsseldorfDüsseldorfGermany
  2. 2.Center for Advanced Studies in Law and EconomicsUniversity of BonnBonnGermany
  3. 3.CESifoMunichGermany

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