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Radar Detectors, Fixed and Variable Costs of Crime

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  • Timothy Stanley

    (Stanford University)

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    Abstract

    Raising the sanction will always reduce the utility of the criminal. However, raising the sanction will not always lead to less crime, and may lead to more crime. If a criminal has the opportunity to commit multiple criminal acts and has fixed and variable costs of committing these acts, then an increase in the criminal sanction, over a certain range of sanctions, may actually lead the criminal to commit more crime. The reason is that as the sanction is increased, the criminal may increase his expenditures on fixed costs, which may decrease his variable costs of committing a criminal act. Once the criminal pays his fixed costs, they will be sunk costs, and thus they will no longer enter into the criminal's decision process of committing criminal acts. But the variable cost of crime will enter into the criminal's decision process. If raising the sanction leads to decreasing variable costs of crime then raising the sanction may actually lead to more crime. The example of the criminal's decision to purchase a radar detector and to speed is used to illustrate the point.

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    Bibliographic Info

    Paper provided by EconWPA in its series Law and Economics with number 9507002.

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    Date of creation: 07 Jul 1995
    Date of revision: 27 Dec 1995
    Handle: RePEc:wpa:wuwple:9507002

    Note: Postscript (.ps) / Acrobat (.pdf), Macintosh, PostScript,
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    Related research

    Keywords: Crime; Criminal Law;

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    1. Polinsky, A Mitchell & Shavell, Steven, 1991. "A Note on Optimal Fines When Wealth Varies among Individuals," American Economic Review, American Economic Association, vol. 81(3), pages 618-21, June.
    2. Polinsky, Mitchell & Shavell, Steven, 1979. "The Optimal Tradeoff between the Probability and Magnitude of Fines," American Economic Review, American Economic Association, vol. 69(5), pages 880-91, December.
    3. Arun S. Malik, 1990. "Avoidance, Screening and Optimum Enforcement," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 341-353, Autumn.
    4. Kaplow, Louis & Shavell, Steven, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 583-606, June.
    5. Mookherjee, Dilip & Png, I P L, 1994. "Marginal Deterrence in Enforcement of Law," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 1039-66, October.
    6. Malik Arun S., 1993. "Self-Reporting and the Design of Policies for Regulating Stochastic Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 24(3), pages 241-257, May.
    7. A. Mitchell Polinsky & Steven Shavell, 1999. "The Economic Theory of Public Enforcement of Law," NBER Working Papers 6993, National Bureau of Economic Research, Inc.
    8. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
    9. A. Mitchell Polinsky & Steven Shavell, 1993. "Should Liability be Based on the Harm to the Victim or the Gain to the Injurer?," NBER Working Papers 4586, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Joel Slemrod & Caroline Weber, 2012. "Evidence of the invisible: toward a credibility revolution in the empirical analysis of tax evasion and the informal economy," International Tax and Public Finance, Springer, vol. 19(1), pages 25-53, February.

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