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Detection avoidance and deterrence: some paradoxical arithmetics

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Author Info
Eric Langlais

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Abstract

This paper extends Malik's (1990) analysis to the case where criminals' avoidance efforts and public expenditures in the detection of criminals are strategic complements in the aggregate technology of control of illegal behaviours. In this set up, we show that whenever criminals' avoidance efforts are more sensitive to the frequency than to the severity of sanctions, it is always socially efficient to set the fine at the maximal possible level. However, several paradoxical consequences occur: there may exist overdeterrence at optimum; more repressive policies lead to less arrestations of offenders while more crimes may be committed; at the same time, the society may be closer to the first best number of crimes.

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Paper provided by Bureau d'Economie Théorique et Appliquée, ULP, Strasbourg in its series Working Papers of BETA with number 2007-06.

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Date of creation: 2007
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Handle: RePEc:ulp:sbbeta:2007-06

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Related research
Keywords: deterrence; avoidance activities; optimal enforcement of law.;

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Find related papers by JEL classification:
D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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  1. Garoupa, Nuno, 2001. "Optimal magnitude and probability of fines," European Economic Review, Elsevier, vol. 45(9), pages 1765-1771, October. [Downloadable!] (restricted)
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  2. A. Mitchell Polinsky & Steven Shavell, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March. [Downloadable!] (restricted)
    Other versions:
  3. Bebchuk, Lucian Arye & Kaplow, Louis, 1993. "Optimal sanctions and differences in individuals' likelihood of avoiding detection," International Review of Law and Economics, Elsevier, vol. 13(2), pages 217-224, June. [Downloadable!] (restricted)
  4. Lewin, Jeff L. & Trumbull, William N., 1990. "The social value of crime?," International Review of Law and Economics, Elsevier, vol. 10(3), pages 271-284, December. [Downloadable!] (restricted)
  5. Grogger, Jeffrey, 1991. "Certainty vs. Severity of Punishment," Economic Inquiry, Oxford University Press, vol. 29(2), pages 297-309, April.
  6. Nalebuff, Barry & Scharfstein, David, 1987. "Testing in Models of Asymmetric Information," Review of Economic Studies, Blackwell Publishing, vol. 54(2), pages 265-77, April. [Downloadable!] (restricted)
  7. Neilson, William S. & Winter, Harold, 1997. "On criminals' risk attitudes," Economics Letters, Elsevier, vol. 55(1), pages 97-102, August. [Downloadable!] (restricted)
  8. Garoupa, Nuno, 1997. " The Theory of Optimal Law Enforcement," Journal of Economic Surveys, Blackwell Publishing, vol. 11(3), pages 267-95, September. [Downloadable!] (restricted)
  9. Neilson, William S, 1998. "Optimal Punishment Schemes with State-Dependent Preferences," Economic Inquiry, Oxford University Press, vol. 36(2), pages 266-71, April.
  10. Arun S. Malik, 1990. "Avoidance, Screening and Optimum Enforcement," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 341-353, Autumn. [Downloadable!] (restricted)
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