Psychic Punishment Costs and Deterrence

Bakó, Barna and Isztin, Péter (2016) Psychic Punishment Costs and Deterrence. Working Paper. Corvinus University of Budapest Faculty of Economics, Budapest.

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In this paper we analyze criminal deterrence in the presence of specific psychic costs of punishments. We consider a dynamic model with three players, analyzing the choices of a representative lawmaker, potential criminal and judge. In our setting the lawmaker decides whether to introduce a fixed punishment enhancement above a chosen threshold of crime level, depending on its popularity among the voters. In reaction, the judge, who is influenced by her own preferences as well as the opinion of her peer group, might change the probability of punishment, through affecting the standard of reasonable doubt. Our results suggest that large discontinuous and mandatory increases in punishment can have unintended effects that are contrary to the stated goal of such punishment enhancements. In equilibrium, when either the judge or her peer group is "anti-punishment" enough, the level of criminal activity might increase in response to the punishment enhancement. This perverse effect is less likely to occur if there is a higher number of peer groups within the "elite", so that a greater extent of self-selection by judges can occur. Our results have relevance for a number of areas outside the traditional criminal justice system as well, such as special courts (such as ecclesiastical or military courts), or the strictness and enforcement of regulations.

Item Type:Monograph (Working Paper)
Series Name:Corvinus Economics Working Papers - CEWP
Series Number / Identification Number:2016/10
Uncontrolled Keywords:crime, deterrence, punishment, peer effects
JEL classification:D81 - Information, Knowledge, and Uncertainty: Criteria for Decision-Making under Risk and Uncertainty
K12 - Contract Law
K42 - Illegal Behavior and the Enforcement of Law
Divisions:Faculty of Economics > Department of Microeconomics
Mathematics, Econometrics
Projects:MTA-BCE "Lendület" Strategic Interactions Research Group
ID Code:2437
Deposited By: Ádám Hoffmann
Deposited On:04 Aug 2016 15:24
Last Modified:04 Aug 2016 15:24

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