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Are "Gangstas" Peacocks? The Handicap Principle and Illicit Markets

  • Andrew Mell
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    Criminals who wear gang colors are acting in a surprisingly brazen way which must increase the probability of being caught and punished by the police.� In our model this brazen behavior is a solution to an enforcement problem.� The central idea is that less able criminals see lower gains from continued participation in crime because they will be caught and punished more often.� Lower future gains imply that reputational concerns will be less effective at enforcing honesty.� Only dealing with brazen criminals will become a good way to avoid dealing with incompetent criminals, because they cannot afford to mimic the brazen behavior.� The principle is similar to the selection for a handicap in evolutionary biology.

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    Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 558.

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    Date of creation: 01 Jul 2011
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    Handle: RePEc:oxf:wpaper:558
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    1. Okuno-Fujiwara Masahiro & Postlewaite Andrew, 1995. "Social Norms and Random Matching Games," Games and Economic Behavior, Elsevier, vol. 9(1), pages 79-109, April.
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