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Penalty and crime with lumpy choices: some further considerations

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Author Info
Laurent Franckx () (K.U.Leuven, C.E.S., Energy, Transport and Environment, Royal Military Academy)

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Abstract

This paper clarifies an issue in the Hirshleifer and Rasmusen-Tsebelis controversy on the effects of penalties on crime: what is the effect of penalties if the transgression of law has a discrete nature and if the law enforcer cannot act as Stackelberg leader? We differentiate between technical (compliance costs) and institutional (penalties) parameters in the potential transgressor's payoff's functions. Depending on the penalty structure, we obtain equilibria either in pure or in mixed strategies. We confirm Hirshleifer and Rasmusen's results that small changes in the fine structure do not affect the equilibrium that is obtained, but that large changes do. In the equilibria with mixed strategies, we confirm Tsebelis's results that changes in the penalties do affect the potential's transgressor's strategies, but without affecting the probability that the individual chooses a particular element in the support of his strategies.

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Publisher Info
Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment in its series Energy, Transport and Environment Working Papers Series with number ete0201.

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Length: 14 pages
Date of creation: Mar 2002
Date of revision:
Handle: RePEc:ete:etewps:ete0201

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Web page: http://www.econ.kuleuven.be/ew/academic/energmil
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Related research
Keywords: decentralized law enforcement; economic analysis of crime;

Find related papers by JEL classification:
K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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