Discussion Paper Details

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Title: Delinquent Networks

Author(s): Coralio Ballester, Antoni Calvó-Armengol and Yves Zenou

Publication Date: May 2009

Keyword(s): Crime policies, Delinquency decision, Key group, NP-hard problem and Social networks

Programme Area(s): Public Economics

Abstract: Delinquents are embedded in a network of relationships. Social ties among delinquents are modelled by means of a graph where delinquents compete for a booty and benefit from local interactions with their neighbors. Each delinquent decides in a non-cooperative way how much delinquency effort he will exert. Using the network model developed by Ballester et al. (2006), we characterize the Nash equilibrium and derive an optimal enforcement policy, called the key-player policy, which targets the delinquent who, once removed, leads to the highest aggregate delinquency reduction. We then extend our characterization of optimal single player network removal for delinquency reduction, the key player, to optimal group removal, the key group. We also characterize and derive a policy that targets links rather than players. Finally, we endogenize the network connecting delinquents by allowing players to join the labor market instead of committing delinquent offenses. The key-player policy turns out to be much more complex since it depends on wages and on the structure of the network.

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Bibliographic Reference

Ballester, C, Calvó-Armengol, A and Zenou, Y. 2009. 'Delinquent Networks'. London, Centre for Economic Policy Research.