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Tempting righteous citizens? Counterintuitive effects of increasing sanctions in the realm of organized crime

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  • Friehe, Tim

Abstract

This paper demonstrates that increasing the expected sanction for a crime may increase this crime's prevalence, using a principal–agent model with different kinds of crime that is typical of organized crime. The intuition for the finding is that the policy change may increase the principal's expected payoff from crime by decreasing the information rent required by the agent.

Suggested Citation

  • Friehe, Tim, 2013. "Tempting righteous citizens? Counterintuitive effects of increasing sanctions in the realm of organized crime," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 37-40.
    • Handle: RePEc:eee:soceco:v:44:y:2013:i:c:p:37-40
    DOI: 10.1016/j.socec.2013.02.016
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    References listed on IDEAS

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    1. Tim Friehe, 2008. "Correlated payoffs in the inspection game: some theory and an application to corruption," Public Choice, Springer, vol. 137(1), pages 127-143, October.
    2. Steven D. Levitt & Sudhir Alladi Venkatesh, 2000. "An Economic Analysis of a Drug-Selling Gang's Finances," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 755-789.
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    6. Stergios Skaperdas, 2001. "The political economy of organized crime: providing protection when the state does not," Economics of Governance, Springer, vol. 2(3), pages 173-202, November.
    7. Richard B. Freeman, 1996. "Why Do So Many Young American Men Commit Crimes and What Might We Do about It?," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 25-42, Winter.
    8. Nuno Garoupa (ed.), 2009. "Criminal Law and Economics," Books, Edward Elgar Publishing, number 12729.
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    20. Antony W. Dnes & Nuno Garoupa, 2010. "Behavior, Human Capital and the Formation of Gangs," Kyklos, Wiley Blackwell, vol. 63(4), pages 517-529, November.
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    Cited by:

    1. Faria João Ricardo & Mixon Franklin G. & Upadhyaya Ashish & Upadhyaya Kamal P., 2019. "Gang Rivalry and Crime: A Differential Game Approach," Review of Law & Economics, De Gruyter, vol. 15(2), pages 1-30, July.
    2. Miles Stan & Pyne Derek, 2017. "The Economics of Scams," Review of Law & Economics, De Gruyter, vol. 13(1), pages 1-18, March.

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    More about this item

    Keywords

    Crime; Principal–agent relation; Information rent;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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