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The Economics of Stigma: Why More Detection of Crime May Result in Less Stigmatization

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  • Alon Harel
  • Alon Klement

Abstract

This paper establishes that there may be an inverse relation between the rate of detection and the deterrent effects of stigma. The more people are detected and stigmatized, the less deterrence there may be. This conclusion is based on a search model in which the costs of searching for law-abiding partners increase with the rate of detection. The model distinguishes between willing stigmatizers, who refrain from business or social contacts with someone they believe has committed an offense (whether he is detected or not), and unwilling stigmatizers, whose main concern is not to be associated with the stigmatized yet are indifferent to whether that person has actually committed an offense. The inverse relation between the rate of detection and the deterrent effect of stigma is possible when the percentage of unwilling stigmatizers in the population is sufficiently high.

Suggested Citation

  • Alon Harel & Alon Klement, 2007. "The Economics of Stigma: Why More Detection of Crime May Result in Less Stigmatization," The Journal of Legal Studies, University of Chicago Press, vol. 36(2), pages 355-377, June.
  • Handle: RePEc:ucp:jlstud:v:36:y:2007:p:355-377
    DOI: 10.1086/511893
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    References listed on IDEAS

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    1. Alon Harel & Alon Klement, 2005. "The Economics of Shame: Why More Shaming may Deter Less," Discussion Paper Series dp401, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
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    3. Bar-Gill, Oren & Harel, Alon, 2001. "Crime Rates and Expected Sanctions: The Economics of Deterrence Revisited," The Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 485-501, Part I Ju.
    4. Rasmusen, Eric, 1996. "Stigma and Self-Fulfilling Expectations of Criminality," Journal of Law and Economics, University of Chicago Press, vol. 39(2), pages 519-543, October.
    5. Sen, Sankar & Gurhan-Canli, Zeynep & Morwitz, Vicki, 2001. " Withholding Consumption: A Social Dilemma Perspective on Consumer Boycotts," Journal of Consumer Research, Oxford University Press, vol. 28(3), pages 399-417, December.
    6. Kahan, Dan M & Posner, Eric A, 1999. "Shaming White-Collar Criminals: A Proposal for Reform of the Federal Sentencing Guidelines," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 365-391, April.
    7. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
    8. George Akerlof, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 599-617.
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    Cited by:

    1. Hussinger, Katrin & Pellens, Maikel, 2017. "Guilt by association: How scientific misconduct harms prior collaborators," ZEW Discussion Papers 17-051, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Fluet, Claude & Galbiati, Rpbertp, 2016. "Lois et normes : les enseignements de l'économie comportementale," L'Actualité Economique, Société Canadienne de Science Economique, vol. 92(1-2), pages 191-215, Mars-Juin.
    3. Edna Ullmann-Margalit, 2008. ""We the Big Brother" Or The Curious Incident of the Camera in the Kitchen," Discussion Paper Series dp480, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    4. Uri Weiss, 2015. "The Robber Wants To Be Punished," Discussion Paper Series dp685, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    5. Baumann, Florian & Friehe, Tim & Grechenig, Kristoffel, 2011. "A note on the optimality of (even more) incomplete strict liability," International Review of Law and Economics, Elsevier, vol. 31(2), pages 77-82, June.
    6. Mungan, Murat C., 2016. "A generalized model for reputational sanctions and the (ir)relevance of the interactions between legal and reputational sanctions," International Review of Law and Economics, Elsevier, vol. 46(C), pages 86-92.
    7. Bruno Deffains & Claude Fluet, 2013. "Legal Liability when Individuals Have Moral Concerns," Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(4), pages 930-955, August.
    8. Christoph Engel & Bernd Irlenbusch, 2010. "Turning the Lab into Jeremy Bentham’s Panopticon. The Effect of Punishment on Offenders and Non-Offenders," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2010_06, Max Planck Institute for Research on Collective Goods.
    9. Carbonara, Emanuela & Parisi, Francesco & von Wangenheim, Georg, 2012. "Unjust laws and illegal norms," International Review of Law and Economics, Elsevier, vol. 32(3), pages 285-299.
    10. Taylor P. Stevenson & Robert D. Tollison & Dennis Pearson, 2012. "Efficacy of shaming penalties: Evidence from SEC football," Economics Bulletin, AccessEcon, vol. 32(2), pages 1162-1170.
    11. Bruno Deffains & Claude Fluet, 2007. "Legal versus Normative Incentives under Judicial Error," Cahiers de recherche 0718, CIRPEE.

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