DP4131 Escalating Penalties for Repeat Offenders

Author(s): Winand Emons
Publication Date: December 2003
Keyword(s): crime and punishment, repeat offenders
JEL(s): D82, K41, K42
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=4131

Agents may commit a crime twice. The act is inefficient so that the agents are to be deterred. Even if an agent is law abiding, they may still commit the act accidentally. The agents are wealth constrained. The government seeks to minimize the probability of apprehension. If the benefit from the crime is small, the optimal sanction scheme is decreasing in the number of offenses. In contrast, if the benefit is large, sanctions are increasing in the number of offenses. Increasing sanctions do not make the criminal track less attractive; they make honesty more attractive.