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Penalty and crime with lumpy choices: some further considerations

Author

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  • Laurent Franckx

    (K.U.Leuven, C.E.S., Energy, Transport and Environment
    Royal Military Academy)

Abstract

This paper clarifies an issue in the Hirshleifer and Rasmusen-Tsebelis controversy on the effects of penalties on crime: what is the effect of penalties if the transgression of law has a discrete nature and if the law enforcer cannot act as Stackelberg leader? We differentiate between technical (compliance costs) and institutional (penalties) parameters in the potential transgressor's payoff's functions. Depending on the penalty structure, we obtain equilibria either in pure or in mixed strategies. We confirm Hirshleifer and Rasmusen's results that small changes in the fine structure do not affect the equilibrium that is obtained, but that large changes do. In the equilibria with mixed strategies, we confirm Tsebelis's results that changes in the penalties do affect the potential's transgressor's strategies, but without affecting the probability that the individual chooses a particular element in the support of his strategies.

Suggested Citation

  • Laurent Franckx, 2002. "Penalty and crime with lumpy choices: some further considerations," Energy, Transport and Environment Working Papers Series ete0201, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    • Handle: RePEc:ete:etewps:ete0201
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    File URL: http://feb.kuleuven.be/drc/Economics/misc/ete_workingpapers/ete-wp02-01.pdf
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    More about this item

    Keywords

    decentralized law enforcement; economic analysis of crime;

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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