Shoplifting, monitoring and price determination
AbstractShoplifting is a major crime problem costing American retailers more than $10 billion per year. Surprisingly, despite the evolvement of an extensive theoretical literature on the economics of some major economic crimes, shoplifting has failed to attract economists' attention. The present paper applies the economic toolbox to this problem, developing a principal-agent type model of shoplifting and shoplifting control. The model examines the customer's decision of whether to shoplift or not as well as the store's profit-maximizing price and monitoring intensity. The paper challenges the conventional wisdom that the observed rise in shoplifting calls for intensified monitoring and higher prices, showing that a rational response to increased shoplifting involves a reduction in both monitoring and prices.
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Bibliographic InfoArticle provided by Elsevier in its journal The Journal of Socio-Economics.
Volume (Year): 38 (2009)
Issue (Month): 4 (August)
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Web page: http://www.elsevier.com/locate/inca/620175
Shoplifting Monitoring Price determination Public shame;
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- Cox, Dena & Cox, Anthony D & Moschis, George P, 1990. " When Consumer Behavior Goes Bad: An Investigation of Adolescent Shoplifting," Journal of Consumer Research, University of Chicago Press, vol. 17(2), pages 149-59, September.
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