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A note on the non-maximality of the optimal fines when the apprehension probability depends on the offense rate

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  • Jeong-Yoo Kim

Abstract

This paper reconsiders the problem of optimal law enforcement when the apprehension probability depends on the offense rate as well as policing expenditures. A natural consequence of such an apprehension probability is the possible multiplicity of the equilibrium due to strategic complementarity, and the actual offense rate is realized by the self-fulfilling nature of the offense rate. If people believe that lowering the fine will lead to a lower offense rate, each individual will be less inclined to commit an illegal activity due to their expectation of a higher apprehension probability. Thus, the maximal fine is not socially optimal in this case. Copyright Springer Science+Business Media, LLC 2013

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  • Jeong-Yoo Kim, 2013. "A note on the non-maximality of the optimal fines when the apprehension probability depends on the offense rate," European Journal of Law and Economics, Springer, vol. 36(1), pages 131-138, August.
    • Handle: RePEc:kap:ejlwec:v:36:y:2013:i:1:p:131-138
    DOI: 10.1007/s10657-012-9341-4
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    References listed on IDEAS

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    Cited by:

    1. Yahagi Ken, 2019. "The Effects of Hate Groups on Hate Crimes," Review of Law & Economics, De Gruyter, vol. 15(3), pages 1-14, November.
    2. Nathan Berg & Jeong-Yoo Kim, 2015. "Quantity Restrictions with Imperfect Enforcement in an Overused Commons: Permissive Regulation to Reduce Overuse?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(2), pages 308-329, June.
    3. Berg Nathan & Kim Jeong-Yoo, 2019. "Economics of the Broken Window Theory," Asian Journal of Law and Economics, De Gruyter, vol. 10(3), pages 1-9, December.

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    More about this item

    Keywords

    Apprehension probability; Law enforcement; Self-fulfilling offense rate; Strategic complementarity; K42;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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