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Rewarding Policemen Increases Crime. Another Surprising Result from the Inspection Game

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Listed author(s):
  • Luciano Andreozzi

    ()

Abstract

Inspection games are 2x2 games in which one playermust decide whether to inspect the other player, who in turnmust decide whether to infringe a norm or a regulation.Inspection games have a single, mixed strategy Nashequilibrium, which has counter-intuitive comparative staticsproperties. This result has been used by Tsebelis (1989) andHoller (1992) to show that the economic approach to lawenforcement is not likely to generate clear-cut predictions.In this paper I discuss a variant of the inspection game inwhich the inspector can act as a Stackelberg leader. I willalso show that this version of the inspection game hascounter-intuitive comparative statics properties. Inparticular, increasing inspector’s incentives to enforce thelaw increases the frequency of law infractions. Copyright Kluwer Academic Publishers 2004

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File URL: http://hdl.handle.net/10.1007/s11127-004-6166-x
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Article provided by Springer in its journal Public Choice.

Volume (Year): 121 (2004)
Issue (Month): 1 (October)
Pages: 69-82

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Handle: RePEc:kap:pubcho:v:121:y:2004:i:1:p:69-82
DOI: 10.1007/s11127-004-6166-x
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Order Information: Web: http://www.springer.com/economics/public+finance/journal/11127/PS2

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  1. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
  2. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
  3. Cox, Gary W, 1994. "A Note on Crime and Punishment," Public Choice, Springer, vol. 78(1), pages 115-124, January.
  4. Wittman, Donald, 1985. "Counter-intuitive results in game theory," European Journal of Political Economy, Elsevier, vol. 1(1), pages 77-89.
  5. Cheng Leonard K. & Zhu Min, 1995. "Mixed-Strategy Nash Equilibrium Based upon Expected Utility and Quadratic Utility," Games and Economic Behavior, Elsevier, vol. 9(2), pages 139-150, May.
  6. Fudenberg, Drew & Levine, David K, 1989. "Reputation and Equilibrium Selection in Games with a Patient Player," Econometrica, Econometric Society, vol. 57(4), pages 759-778, July.
  7. Drew Fudenberg & David K. Levine, 1992. "Maintaining a Reputation when Strategies are Imperfectly Observed," Review of Economic Studies, Oxford University Press, vol. 59(3), pages 561-579.
  8. Garoupa, Nuno, 1997. " The Theory of Optimal Law Enforcement," Journal of Economic Surveys, Wiley Blackwell, vol. 11(3), pages 267-295, September.
  9. Wittman, Donald, 1993. "Nash equilibrium vs. maximin : A comparative game statics analysis," European Journal of Political Economy, Elsevier, vol. 9(4), pages 559-565, November.
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Cited by:

  1. Kirstein, Roland, 2005. "Bayesian Monitoring," CSLE Discussion Paper Series 2005-06, Saarland University, CSLE - Center for the Study of Law and Economics.
  2. Luciano Andreozzi, 2008. "Inspection games with long-run inspectors," Department of Economics Working Papers 0821, Department of Economics, University of Trento, Italia.
  3. Tim Friehe, 2008. "Correlated payoffs in the inspection game: some theory and an application to corruption," Public Choice, Springer, vol. 137(1), pages 127-143, October.
  4. Fandel, G. & Trockel, J., 2013. "Avoiding non-optimal management decisions by applying a three-person inspection game," European Journal of Operational Research, Elsevier, vol. 226(1), pages 85-93.
  5. Friehe, Tim, 2013. "Tempting righteous citizens? Counterintuitive effects of increasing sanctions in the realm of organized crime," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 37-40.
  6. Bruni, Camilla & Nuño, Juan Carlos & Primicerio, Mario, 2013. "What if criminals optimize their choice? Optimal strategies to defend public goods," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(4), pages 840-850.
  7. A. Antoci & S. Borghesi & G. Iannucci, 2016. "Green licenses and environmental corruption: a random matching model," Working Paper CRENoS 201615, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  8. Pradiptyo, Rimawan, 2011. "A Certain Uncertainty; Assessment of Court Decisions in Tackling Corruption in Indonesia," MPRA Paper 36382, University Library of Munich, Germany.
  9. Manfred J. Holler & Barbara Klose-Ullmann, 2008. "Wallenstein’s Power Problem and Its Consequences," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 2(3), pages 197-218, December.
  10. Daniel G. Arce & Walter Enders & Gary A. Hoover, 2008. "Plagiarism And Its Impact On The Economics Profession," Bulletin of Economic Research, Wiley Blackwell, vol. 60(3), pages 231-243, 07.
  11. Pradiptyo Rimawan, 2007. "Does Punishment Matter? A Refinement of the Inspection Game," Review of Law & Economics, De Gruyter, vol. 3(2), pages 197-219, August.
  12. Manfred J. Holler, 2013. "On Machiavelli’s conspiracy paradoxes," Chapters,in: Constitutional Economics and Public Institutions, chapter 7, pages 125-145 Edward Elgar Publishing.
  13. Arce, Daniel G., 2010. "Corporate virtue: Treatment of whistle blowers and the punishment of violators," European Journal of Political Economy, Elsevier, vol. 26(3), pages 363-371, September.
  14. Ehud Guttel & Barak Medina, 2007. "Less Crime, More (Vulnerable) Victims: Game Theory and the Distributional Effects of Criminal Sanctions," Discussion Paper Series dp472, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
  15. John Bone & Dominic Spengler, 2014. "Does Reporting Decrease Corruption?," Journal of Interdisciplinary Economics, , vol. 26(1-2), pages 161-186, January.
  16. Spengler Dominic, 2014. "Endogenous Detection of Collaborative Crime: The Case of Corruption," Review of Law & Economics, De Gruyter, vol. 10(2), pages 1-17, July.
  17. Dominic Spengler, 2012. "Endogenising Detection in an Asymmetric Penalties Corruption Game," Discussion Papers 12/20, Department of Economics, University of York.
  18. Ehud Guttel & Barak Medina, 2007. "Less Crime, More (Vulnerable) Victims: Game Theory and the Distributional Effects of Criminal Sanctions," Levine's Bibliography 122247000000001799, UCLA Department of Economics.
  19. Buechel, Berno & Emrich, Eike & Pohlkamp, Stefanie, 2013. "Nobody's innocent: the role of customers in the doping dilemma," MPRA Paper 44627, University Library of Munich, Germany.

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