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Welfare effects of forming a criminal organization

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  • Ken Yahagi

    (Waseda University)

Abstract

This paper develops a simple model to examine the economic consequences of two different criminal market structures in the private protection and extortion industry: (1) horizontal (decentralized) governance and market structure and (2) hierarchical (centralized) governance and market structure with a criminal organization. Forming a criminal organization produces positive or negative effects on its members and social efficiency. These results depend on the potential competitiveness among criminals and the ability of a criminal organization’s boss to target more valuable extortion victims.

Suggested Citation

  • Ken Yahagi, 2018. "Welfare effects of forming a criminal organization," European Journal of Law and Economics, Springer, vol. 46(3), pages 359-375, December.
    • Handle: RePEc:kap:ejlwec:v:46:y:2018:i:3:d:10.1007_s10657-018-9600-0
    DOI: 10.1007/s10657-018-9600-0
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    Cited by:

    1. Giovanni B. Ramello & Alain Marciano, 2018. "Cesare Beccaria: back to the future of law and economics," European Journal of Law and Economics, Springer, vol. 46(3), pages 271-274, December.
    2. Ken Yahagi & Susumu Cato, 2023. "Strategic crackdown on organized crime by local governments," Economics of Governance, Springer, vol. 24(2), pages 237-257, June.
    3. Ken Yahagi, 2019. "Law enforcement with criminal organizations and endogenous collaboration," European Journal of Law and Economics, Springer, vol. 48(3), pages 351-363, December.
    4. Dr. Fauzia Mohamed* & Mussa Ali Mussa, 2019. "Emergence of Youth Criminal Groups Popularly Known as Panya Road and Ubaya Ubaya in Tanzania: The Case of Dar es Salaam City and Zanzibar Town," Research Journal of Education, Academic Research Publishing Group, vol. 5(7), pages 119-127, 07-2019.
    5. Ken Yahagi, 2022. "Regulation on coexisting legal and illegal markets with quality differentiation," European Journal of Law and Economics, Springer, vol. 53(2), pages 235-259, April.

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    More about this item

    Keywords

    Conflict; Organized crime; Rent-seeking; Crime; Extortion;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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