The John M. Olin Center

Paper Abstract

682. Steven Shavell, When Is It Socially Desirable For An Individual To Comply With The Law?, 11/10.

Abstract: When would an individual expect that adherence to the law would advance the social good? This time-honored question is not only of theoretical interest; it also holds practical importance to the degree that individuals wish to further social well-being. In the stylized model on which I focus, an individual’s knowledge of factors relevant to social welfare is inferior to that of lawmakers in some respects and is superior in others. Thus, in assessing whether obeying a legal rule would promote social welfare, an individual must take into rational account not only that the rule will impound certain superior information of lawmakers, but also that the rule will often fail to reflect his or her private information. A second issue that an individual must consider in deciding whether following the law would be socially desirable is a compliance externality: the potential influence of the witnessing of his or her compliance behavior on the compliance behavior of observers. The conclusions from the model of socially desirable conformance to the law are interpreted, including their implications for the moral obligation to obey the law.


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