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Criminal network, leniency, and market externalities

Author

Listed:
  • Giovanni Immordino
  • Salvatore Piccolo
  • Paolo Roberti

Abstract

We analyze the self‐reporting incentives fostered by a leniency program within a criminal network formed by a supplier of an illegal good and his dealers who compete against each other in the product market. We show that when it is viable, a first‐informant rule always performs better than an all‐informant rule—that is, it induces a lower level of crime. Nevertheless, the viability of a first‐informant rule may be compromised if the baseline probability of conviction is sufficiently low, thereby placing disproportionate reliance on leniency over other investigative efforts for securing convictions.

Suggested Citation

  • Giovanni Immordino & Salvatore Piccolo & Paolo Roberti, 2024. "Criminal network, leniency, and market externalities," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 26(4), August.
  • Handle: RePEc:bla:jpbect:v:26:y:2024:i:4:n:e12709
    DOI: 10.1111/jpet.12709
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    References listed on IDEAS

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