We model a simple justice system in which a jury is mandated by society to assess the guilt and the punishment of an accused. Jurors are assumed to be almost perfect representatives of society, but they ignore the cost to society of implementing the sentence. As a result the jury is shown to condemn more often and to higher penalties than society would find it optimal. We show that imposing upper and lower limits to penalties helps to align the jury's objective with society's.
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Find related papers by JEL classification: K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
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