Part of a special issue on corporate misconduct. The writer relates the economic analysis of law and the study of social norms to punitive damages, which are described as the amounts awarded to plaintiffs in civil trials in order to punish the defendants. He discusses punitive damages in practice, why offenders should be punished, when they should be punished, and how much they should be punished. He contends that in jury trials, the court should instruct the jury on how to compute the minimum amount of punishment required to deter wrongdoing, and he uses a theory of rational self-monitoring to distinguish between intentional and unintentional wrongdoing.