Stigma and Self-Fulfilling Expectations of Criminality
A convicted criminal suffers not only from public penalties, but from stigma, the reluctance of others to interact with him economically and socially. Conviction can convey useful information about a person, which makes stigmatization an important and legitimate function of the criminal justice system, quite apart from moral considerations. Whether stigma will operate in this way depends on expectations and the crime rate, however, which can lead to multiple, pareto-ranked equilibria with different amounts of crime and stigma.
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