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Cost minimizing sequential punishment policies for repeat offenders

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  • Evgenia Motchenkova

Abstract

This article discusses optimal sanctions for repeat offenders. We analysed a multi-period decision problem, where the regulator's main objectives are to block any violations of law and to minimize the costs of crime control. We conclude that, when offenders are identical and wealth constrained, the government is resource constrained, can perfectly observe illicit gains and commits to a certain policy throughout the whole planning horizon, forward-looking solution implies that cost minimizing deterrence is decreasing in the number of offenses. This analysis is relevant in case when imprisonment is not commonly used, only monetary sanctions are allowed and limited liability of offenders plays an important role. The examples are tax evasion, violations of environmental regulations and violations of competition law.

Suggested Citation

  • Evgenia Motchenkova, 2014. "Cost minimizing sequential punishment policies for repeat offenders," Applied Economics Letters, Taylor & Francis Journals, vol. 21(5), pages 360-365, March.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:5:p:360-365
    DOI: 10.1080/13504851.2013.861579
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    References listed on IDEAS

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    1. Malik Arun S., 1993. "Self-Reporting and the Design of Policies for Regulating Stochastic Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 24(3), pages 241-257, May.
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    3. Emons, Winand, 2003. "A note on the optimal punishment for repeat offenders," International Review of Law and Economics, Elsevier, vol. 23(3), pages 253-259, September.
    4. Burnovski, Moshe & Safra, Zvi, 1994. "Deterrence effects of sequential punishment policies: Should repeat offenders be more severely punished?," International Review of Law and Economics, Elsevier, vol. 14(3), pages 341-350, September.
    5. Leung, Siu Fai, 1991. "How to make the fine fit the corporate crime? : An analysis of static and dynamic optimal punishment theories," Journal of Public Economics, Elsevier, vol. 45(2), pages 243-256, July.
    6. repec:bla:jecsur:v:11:y:1997:i:3:p:267-95 is not listed on IDEAS
    7. Landsberger, Michael & Meilijson, Isaac, 1982. "Incentive generating state dependent penalty system : The case of income tax evasion," Journal of Public Economics, Elsevier, vol. 19(3), pages 333-352, December.
    8. Nuno Garoupa, 1997. "The Theory of Optimal Law Enforcement," Journal of Economic Surveys, Wiley Blackwell, vol. 11(3), pages 267-295, September.
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    Cited by:

    1. Lisa R. Anderson & Gregory DeAngelo & Winand Emons & Beth Freeborn & Hannes Lang, 2017. "Penalty Structures And Deterrence In A Two-Stage Model: Experimental Evidence," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1833-1867, October.
    2. Alfred Endres & Bianca Rundshagen, 2012. "Escalating penalties: a supergame approach," Economics of Governance, Springer, vol. 13(1), pages 29-49, March.
    3. Wolfgang Eggert & Steffen Minter & Maximilian Stephan & Handirk Ungern-Sternberg, 2017. "Sanctions for repeat offenders: a question of wealth?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(5), pages 467-482, November.
    4. Leshem, Shmuel & Tabbach, Avraham, 2023. "The option value of record-based sanctions," Games and Economic Behavior, Elsevier, vol. 137(C), pages 1-22.
    5. Endres Alfred & Rundshagen Bianca, 2016. "Optimal Penalties for Repeat Offenders – The Role of Offence History," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 545-578, June.
    6. Stan Miles & Derek Pyne, 2015. "Deterring repeat offenders with escalating penalty schedules: a Bayesian approach," Economics of Governance, Springer, vol. 16(3), pages 229-250, August.

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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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