Sticks, carrots, or a hybrid mechanism: The test case of refusal to divorce

Abstract

Abstract Various incentives may be used in order to cause a person to desist from creating negative externalities. Both carrots and sticks have advantages and disadvantages. Literature is familiar with various combinations between them. In most cases, the mechanism is “horizontal”: using carrots with respect to certain parts of the population, and sticks against others. The article presents a novel, vertical mechanism, in the form of a “game” played in two consecutive stages that trap the damager within the mechanism. At the center of the first stage of the mechanism stands a “carrot,” which is money offered for the damager in order for him/her to desist from the evil, combined with a type of a stick, which is a social sanction (shaming). At the center of the second stage, which is activated only if the first stage did not succeed, stands a “stick,” which is a civil action that can be brought against the damager if s/he does not take the carrot offered to him/her in the first stage. The objective: to incentivize a person to engage in fruitful negotiations to end harmful activity at the pre-mechanism stage. To illustrate this, the article draws on negative social behavior of one-sided refusal to give/accept the divorce bill (get) in the Jewish sector the world over. The mechanism will be built primarily on the basis of a few law and economics theories. A dialogue will thus be created with these theories in fields where they are rarely applied. The main argument is that the use of a vertical setup increases efficiency at a minimal additional cost, overcomes a moral problem, and optimally combines the resulting advantages by deploying sticks and carrots, and at the same time neutralizes most of the disadvantages of either of them.