I did check the other thread. In response to my question, “What transaction costs?” you said:

It’s not easy to get friends to reduce their smoking or form implicit contracts with them. You have to use up social capital to do it, which is costly to you. Mentioning to them that you don’t like their habit is unlikely to be enough to achieve efficiency.

Is that not fairly summarised as, “if transactions costs are important enough to prevent friends sharing opinions on smoking…”?

The police aren’t completely off the hook because it is going to be followed up by a private civil action. this will mean the police will have to pay some compensation to the victim, its practically an open and shut case, but the officer won’t be left unemployable.

Sounds like a fair enough outcome to me and covers the moral hazard problem.

But I don’t see why police officers need to fear private prosecutions, as suggested in this story. The judge let this police officer go without any conviction, despite finding her guilty of assault. When police officers are not punished for breaking the law. Then it doesn’t make sense for them to fear breaking that law.

On the matter of transaction costs here:

1) Few would suggest that the costs of prosecution always outweigh the societal benefit, so you must be talking about the particular case and its minor offending. Prosecution of minor offences is always at the discretion of the prosecutor and the prosecutor bears the cost of filing the action. That is no different in private than in public prosecutions so I see no reason for a different rule.

2) The very small number of private prosecutions taken suggests that they are hardly overburdening the judicial system.