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Optimal Leniency and the Organization Design of Group Delinquency

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Abstract

We study a simple law enforcement model in which the organizational structure of criminal organizations is endogenous and determined jointly with the amnesty granted to criminals who ip and blow the whistle (leniency program). We allow criminals to choose between a horizontal (partnership) and a vertical structure and study how this choice affects the optimal leniency chosen by a benevolent Legislator whose objective is to minimize crime. We show that when soldiers in vertical organizations have valuable information about the boss, the policy mainly targets vertical hierarchies, leaving horizontal structures proliferate in number. By contrast, when soldiers are poorly informed about their heads, the Legislator implements a policy that completely eradicates partnerships. When the two types of organization coexist, partnerships emerge only for intermediate levels of trust between criminals, while organizations take a vertical structure for low or high levels of trust among felons.

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  • Giovanni Immordino & Salvatore Piccolo & Paolo Roberti, 2018. "Optimal Leniency and the Organization Design of Group Delinquency," CSEF Working Papers 503, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:503
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    Cited by:

    1. Giovanni Immordino & Salvatore Piccolo & Paolo Roberti, 2018. "Criminal Networks, Market Externalities and Optimal Leniency," CSEF Working Papers 519, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    2. Immordino, Giovanni & Piccolo, Salvatore & Roberti, Paolo, 2020. "Optimal leniency and the organization design of group crime," Journal of Public Economics, Elsevier, vol. 191(C).

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    More about this item

    Keywords

    Criminal Organizations; Leniency; Organizational Structure; Partnerships; Vertical Hierarchies;
    All these keywords.

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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