Boston University, Department of Economics
Behavioral Economics of Crime Rates and Punishment Levels (with K. Leong)
Abstract:Empirical studies have shown, paradoxically, that increasing the probability of apprehension can correlate with an increase in the total number of criminal actions. To examine this phenomenon, this paper develops a theory of "personal rules" based on the tradeoff between one's self-image of criminal productivity and the temptation - salience of the present - of taking the easy way out by committing a crime. This theory analyzes transformation of lapses into precedents that undermine future self-restraint. The foundation for this transformation is imperfect recall of one's own criminal productivity within certain defined parameters, which leads people to draw inaccurate inferences from their past actions. Rationalization may lead to overestimation of the expected utility of committing a crime when the opportunity presents itself.