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Unpublished Paper
From Stick to Carrot: an Endowment Account of Expressive Law
(2012)
  • David E. DePianto, Arizona State University
Abstract

This paper extends the literature on expressive law by developing a model of compliance rooted in the endowment effect. The central premise of the model is that compliance with legal rules, while costly from an ex ante perspective, may also endow individuals with a stream of benefits whose ex post value will increase. Examples of compliance-related benefits would include reductions in risk to one’s own health and safety, enhanced reputation (as a law-abiding individual), and even tangible goods. Under this novel account, once an individual has complied with a law, received some associated benefits, and grown attached to such benefits via the endowment effect, violating the law might thereafter entail a net economic loss – even without the sanction that induced compliance in the first place. While the initial threat of sanction plays a key role in this story, the law’s capacity to change individual endowments through forced compliance, and in turn alter preferences, is the expressive engine of the endowment model. The upshot is not only that the compliance decision is about more than just costs, narrowly conceived; it is that the very act of compliance at one time might change the entire cost structure for future decisions about compliance. The paper distinguishes the endowment model from other expressive accounts and offers a series of anti-smoking examples as suggestive evidence of the model in action.

Keywords
  • expressive,
  • internalization,
  • compliance,
  • endowment
Publication Date
2012
Citation Information
David E. DePianto. "From Stick to Carrot: an Endowment Account of Expressive Law" (2012)
Available at: http://works.bepress.com/david_depianto/5/