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A Dynamic Game Of Offending And Law Enforcement

Author

Listed:
  • THOMAS FENT

    (Institute for Demography, Austrian Academy of Sciences, Hintere Zollamtsstraße 2b, A-1033 Vienna, Austria)

  • GUSTAV FEICHTINGER

    (Institute for Econometrics, Operations Research and System Theory, Vienna University of Technology, Vienna, Austria)

  • GERNOT TRAGLER

    (Institute for Econometrics, Operations Research and System Theory, Vienna University of Technology, Vienna, Austria)

Abstract

In this paper, we analyse a differential game describing the interactions between a potential offender and the law enforcement agency. We assume that both players want to maximise their welfare expressed in monetary units, and compare the results obtained by applying the Nash equilibrium concept under symmetric with that under asymmetric information. The comparison reveals that under asymmetric information the offence rate is lower, due to the deterrence caused by the activities of the law enforcement agency. Both players' controls start at a steady state value and stick to it until close to the end of the planning horizon, when they leave the steady state to take into account the scrap value; this can be interpreted as a turnpike property of Nash equilibria. Furthermore, a sensitivity analysis is carried out. Among others, it turns out that a myopic offender tends to a higher offence level.

Suggested Citation

  • Thomas Fent & Gustav Feichtinger & Gernot Tragler, 2002. "A Dynamic Game Of Offending And Law Enforcement," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 71-89.
    • Handle: RePEc:wsi:igtrxx:v:04:y:2002:i:01:n:s0219198902000550
    DOI: 10.1142/S0219198902000550
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    Citations

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    Cited by:

    1. Motchenkova, Evgenia, 2008. "Determination of optimal penalties for antitrust violations in a dynamic setting," European Journal of Operational Research, Elsevier, vol. 189(1), pages 269-291, August.
    2. BRYAN C. McCANNON, 2009. "Differentiating Between First And Repeat Offenses," Contemporary Economic Policy, Western Economic Association International, vol. 27(1), pages 76-85, January.
    3. Herbert Dawid & Engelbert Dockner & Richard Hartl & Josef Haunschmied & Ulrike Leopold-Wildburger & Mikulas Luptacik & Alexander Mehlmann & Alexia Prskawetz & Marion Rauner & Gerhard Sorger & Gernot T, 2010. "Gustav Feichtinger celebrates his 70th birthday," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 18(4), pages 437-451, December.

    More about this item

    Keywords

    Economics of Crime; Law Enforcement; Differential Game; Symmetric Information; Asymmetric Information;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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