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Discounting and Criminals’ Implied Risk Preferences

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Listed:
  • Mungan Murat C.
  • Klick Jonathan

    (Law School, University of Pennsylvania, Philadelphia, PA, USA)

Abstract

Conventional wisdom holds that potential offenders are more responsive to increases in the certainty than increases in the severity of punishment. In standard law enforcement models, this assumption implies that criminals are risk seeking. We add to the existing literature by showing that offenders who discount future monetary benefits can be more responsive to the certainty rather than the severity of punishment, even when they are risk averse, and even when their disutility from imprisonment rises proportionally (or more than proportionally) with the length of the sentence.

Suggested Citation

  • Mungan Murat C. & Klick Jonathan, 2015. "Discounting and Criminals’ Implied Risk Preferences," Review of Law & Economics, De Gruyter, vol. 11(1), pages 19-23, March.
    • Handle: RePEc:bpj:rlecon:v:11:y:2015:i:1:p:19-23:n:3
    DOI: 10.1515/rle-2014-0048
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    References listed on IDEAS

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    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Pyne, Derek, 2012. "Deterrence: Increased enforcement versus harsher penalties," Economics Letters, Elsevier, vol. 117(3), pages 561-562.
    3. Polinsky, A Mitchell & Shavell, Steven, 1999. "On the Disutility and Discounting of Imprisonment and the Theory of Deterrence," The Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 1-16, January.
    4. Neilson, William S. & Winter, Harold, 1997. "On criminals' risk attitudes," Economics Letters, Elsevier, vol. 55(1), pages 97-102, August.
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