Are public and private enforcement complements or substitutes? Evidence from high frequency data

Abstract

A substantial theoretical literature identifies two general approaches to deterring non-norm conforming behavior: public law enforcement to monitor and punish proscribed behavior, and private (community) enforcement to discourage both illegal and legal norm defying activities. Recent papers highlight the importance of both enforcement approaches but empirical identification of their relative effects has been challenging. Utilizing a novel, event-level database from the National Hockey League, we examine the separate and interactive effects of law enforcement (referees) and community, vigilante justice (fighting) on non-conforming behavior. We find that the timing of events is crucial in determining the effectiveness of the different types of enforcement. Community enforcement is effective only when law enforcement is lacking. Conversely, law enforcement actions are effective both independently and in conjunction with community enforcement.