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

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  • Andrew Mell

Abstract

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.

Suggested Citation

  • Andrew Mell, 2011. "Are "Gangstas" Peacocks? The Handicap Principle and Illicit Markets," Economics Series Working Papers 558, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:558
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    File URL: http://www.economics.ox.ac.uk/materials/working_papers/paper558.pdf
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    References listed on IDEAS

    as
    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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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. An Economic Analysis of Gang Colors
      by Christopher Shea in Ideas Market on 2011-08-02 22:09:22
    2. The Economics of Gang Colors
      by Josh Wright in Truth on the Market on 2011-08-04 07:31:21

    More about this item

    Keywords

    Illegal behaviour and the enforcement of law; Information; Uncertainty;

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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