Optimal law enforcement with sophisticated and naïve offenders

Berno Buechel, Eberhard Feess () and Gerd Muehlheusser
Authors registered in the RePEc Author Service: Berno Büchel

Journal of Economic Behavior & Organization, 2020, vol. 177, issue C, 836-857

Abstract: Research in criminology has shown that the perceived risk of apprehension often differs substantially from the true level. To incorporate this insight, we extend the standard economic model of law enforcement (Becker, 1968) by considering two types of offenders, sophisticates and naïves. Sophisticates always fully take the actual enforcement effort into account, while naïves do so only when the effort is revealed by the authority. Otherwise, naïves rely on their fixed perceptions. When the share of naïves is high, a welfare-maximizing authority chooses a low enforcement effort, which is over-estimated by the naïves. Otherwise, it chooses a high effort, which is then revealed to all potential offenders. In three empirically relevant extensions, we allow for lower efficacy of the effort due to avoidance activities, endogenous fines, and heterogeneity with respect to naïves’ perceptions.

Keywords: Optimal law enforcement; Deterrence; Behavioral law & economics; Shrouding; Underinference; Salience (search for similar items in EconPapers)
JEL-codes: D73 K42 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Optimal Law Enforcement with Sophisticated and Naive Offenders (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:177:y:2020:i:c:p:836-857

DOI: 10.1016/j.jebo.2020.07.004

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