Penalty Structures and Deterrence in a Two-Stage Model: Experimental Evidence (original) (raw)
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Penalty Structures and Deterrance in a Two-Stage Model: Experimental Evidence
2015
Increasing penalty structures for repeat offenses are ubiquitous in penal codes, despite little empirical or theoretical support. Multi-period models of criminal enforcement based on the standard economic approach of Becker (1968) generally find that the optimal penalty structure is either flat or declining. We experimentally test a two-stage theoretical model that predicts decreasing penalty structures will yield greater deterrence than increasing penalty structures. We find that decreasing fine structures are more effective at reducing risky behavior. Additionally, our econometric analyses reveal a number of behavioral findings. Subjects are deterred by past convictions, even though the probability of detection is independent across decisions. Further, subjects appear to take the two-stage nature of the decision making task into account, suggesting that subjects consider both current and future penalties. Even controlling for the fine a subject faces for any given decision, being in a decreasing fine structure has a significant effect on deterrence.
Punishment, Deterrence, and Avoidance
2007
This paper explores the effects of public enforcement, in general, and punishment, in particular, on crime levels if offenders can engage in avoidance activities. Avoidance reduces the probability or magnitude of punishment. In general, offenders can reduce their expected punishment either by substituting legal for criminal activities (the deterrent effect) or by increasing avoidance activities. This paper shows that increasing the direct costs of crime – by either increasing punishment or enforcement efforts – does not necessarily deter criminal activity and may actually trigger increased crime, if avoidance is possible. Furthermore, this paper shows that increasing the opportunity costs of crime (e.g., by subsidizing legal alternatives or through education or vocational programs) reduces both crime and avoidance and in this respect is advantageous. The conditions for such outcomes are identified, the economic mechanisms explained, and an underlying intuitive approach for these res...
International Review of Law and Economics, 1994
*This research was supported by the Israeli Institute for Business Research, Faculty of Management, Tel Aviv University. We thank Eyal Sulganik for his comments. 'See, for example, the U.S. Supreme Court decision in Cm/tam II. .%a& t~f West Vzrginra 224 U.S. 616 (1912) at page 623: "The propriety of inflicting severer punishmrnt upon old offenders has long been recognized in this country and England. Statues providing for such increased punishment were enacted in Virginia and New York as early as 1796." *U.S. Sentencing Commission, Federal Sentencing Guidelines 2 (1990 ed.) p. 236. England, for example; see Wasik (1990) and Walker (1985).
On Punishment Institutions and Effective Deterrence of Illicit Behavior
Reducing criminal acts in society is a crucial duty of governments. Establishing punishment structures to attain this goal involves high costs. Typically, both theorists and practitioners resort to the adjustment of severity and/or certainty of punishment as effective deterrents of criminal behavior. One more cost-effective, but a scientifically understudied mechanism for effective deterrence is the swiftness of punishment. We carry out the first controlled economic experiment to study the effectiveness of swiftness of punishment along the following two dimensions: the timing of punishment and the timing of the resolution of uncertainty regarding punishment. Our results indicate an inverted u-shaped relation between the delay of punishment, the delay of uncertainty resolution regarding the detection of deviant behavior, and any resulting deterrence. In fact, institutions that either reveal detection and impose punishment immediately or maintain uncertainty about the state of detection and impose punishment sufficiently late deter individuals at equal rates. We conclude that the same institutional settings that are capable of reducing recidivism are also the ones deterring deviant behavior in the first place. Our results yield strong pol- icy implications for designing effective institutions in mitigating misconduct and reducing recidivism.
Deterrence Effects of Enforcement Schemes: An Experimental Study
Management Science, 2021
Private and public organizations are interested in finding effective ways to reduce crime and promote ethical behavior without investing heavy resources into monitoring and compliance. In this paper, we experimentally study how revealing different information about a fine distribution affects deterrence of an undesirable behavior. We use a novel incentive-compatible elicitation method to observe subjects lying (the undesirable behavior) and quantify the extent to which this behavior responds to information structures. We find that punishment schemes that communicate only partial information (the minimum fine in particular) are more effective than full information schemes at deterring lying. We explore the mechanism driving this result and link it to subjects’ beliefs about their own versus the average expected fine in treatments with partial information. This paper was accepted by Yan Chen, behavioral economics and decision analysis.
Policy Studies Journal, 2004
In the late 60s, Gary Becker incorporated into his formal model of deterrence theory an explicit statement that the theory´s components-certainty and severity of punishment-are more or less influential than one another depending on an individual´s preference for risk. The certainty of punishment is more influential than the severity of punishment in the decision of whether or not to commit crime if an individual is risk acceptant; if a criminal is risk averse, then the severity of punishment is more important than the certainty of punishment. Many aggregate deterrence studies arrive at estimates that reveal varying effects of the certainty and severity components of deterrence theory, with the certainty of punishment carrying the greater, and many times the only, weight. Leaning on Becker´s extension of deterrence theory, empiricists assume that criminals have a preference for risk. Assertions that arrests and convictions are greater deterrent tools imply important worldly consequences because they indicate to governmental authorities where resources should be invested to insure the best deterrent payoff. In this paper, I question both the need to take risk into consideration in aggregate level deterrence studies and the empirical evidence that has been offered in support of attaching greater weight to the certainty of punishment. I show, first, that deterrence theory, from an applied policy standpoint, is encumbered through the explicit consideration of risk preferences. Next, I work through the algebra of the statistical formulations of deterrence models and demonstrate that the greater weight associated with certainty could well be an artifact of the model specification. Finally, I reanalyze data that appear to be consistent with the greater weight for certainty than severity argument and show that the evidence does not support that inference. Potential criminals mentally combine the three deterrence components-regardless of whether they are risk neutral, averse, or acceptant. I conclude by considering what it means to a worldly application of criminal deterrence theory to place equal weight on the certainty and the severity of punishment. In the criminal deterrence literature, three elements, combined, produce an expected cost of punishment: the probability of arrest, the probability of conviction, and the severity of punishment. Either by raising the certainty that a criminal will be punished-through the increased probability of arrest and/or the probability of conviction of those arrested-or by raising the severity of punishment through extended time served in prison, a government should be able to reduce the crime rate in its jurisdiction. So says the theory. The theoretical logic of criminal deterrence is disarmingly simple and, perhaps for that reason, persuasive. It is supposed to reduce crime by setting the expected cost of committing a crime high enough to dissuade potential criminals from choosing to commit illegal acts. In theory, analysis, and practice, however, things are not so simple. Notes: 1) Estimates are based on a log-linear model transformation of the Decker and Kohfeld (1990) model, estimated using the Pogue (1983) data: ln (C rate/1-C rate) = β 0 + β 1 Clear +β 2 Conv|Off + β 3 Time+ β 2 Nonwhite + β 3 Unemploy + µ. 2.) The values in parentheses are the standard errors of the coefficients.
The Deterrent Effects of Prison: Evidence from a Natural Experiment
Journal of Political Economy, 2009
In this paper we test for the theory of deterrence. We exploit the natural experiment provided by the Collective Clemency Bill passed by the Italian Parliament in July 2006. As a consequence of the provisions of the bill, expected punishment to former inmates recommitting a crime can be considered as good as randomly assigned. Based on a unique data set on post-release behaviour of former inmates, we find that an additional month in expected sentence reduces the propensity to recommit a crime by 1.24 percent: this corroborates the general deterrence hypothesis. However, this effect depends on the time previously served in prison: the behavioural response to an additional month of expected sentence decreases with the length of the prison spell. This second result can be hardly reconciled with the specific deterrence hypothesis according to which a stronger past experience of punishment should increase the sensitivity to future expected sanctions.
Marginal Deterrence, Escalating Penalties and Enforcement Inconsistency
The Law and Economics literature on public law enforcement has generally treated separately the issue of marginal deterrence from that of punishing repeated offenders though escalating penalties. We extend the model provided by Emons (2003) to show how pursuing both policies may generate an inconsistent enforcement design.
Crime and Punishment: an Experimental Study
2020
In this paper, we study experimentally how revealing different information about a punishment distribution affects crime deterrence. In our laboratory experiments, we hold the expected value of punishment equal across treatments while changing the framing of the same punishment scheme. We use an incentive-compatible elicitation method to observe crime behavior across subjects and quantify the extent to which this behavior responds to information structures. We find that ambiguous punishment schemes, such as providing a minimum or a maximum fine, are more effective at deterring undesirable behavior compared to schemes which specify the exact distribution of fines. Further, we document that the ‘minimum’ frame outperforms the ‘maximum’ one and identify the mechanism driving this results.