The Hyperbolic Punishment Function
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Ali M. al-Nowaihi
Abstract
All models in Law and Economics use punishment functions (hereafter, PF) that incorporate a trade-off between probability of detection, p, and punishment, F. Suppose society wishes to minimize the total costs of enforcement and damages from crime, T( p,F). For a given p, an optimal punishment function (OPF) determines an F that minimizes T( p,F). A popular and tractable PF is the hyperbolic punishment function (HPF). We show that the HPF is an OPF for a large class of total cost functions. Furthermore, the HPF is an upper (lower ) bound for an even larger class of punishment functions. If the HPF cannot (can) deter crime, then none (all ) of the PF’s for which the HPF is an upper (lower ) bound can deter crime. Thus, if one can demonstrate that a particular policy is ineffective (effective) under the HPF, there is no need to even compute the OPF. Our results should underpin an even greater use of the HPF. We give illustrations from mainstream and behavioral economics.
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Artikel in diesem Heft
- Article
- Are Academics Messy? Testing the Broken Windows Theory with a Field Experiment in the Work Environment
- The Role of Prosecutor's Incentives in Creating Congestion in Criminal Courts
- Political Beliefs and Tort Awards: Evidence of Rationally Political Jurors from Two Data Sets
- Mitigating Judgment Proofness: Information Acquisition vs. Extended Liability
- Decoupled Liability and Efficiency: An Impossibility Theorem
- Natural Resource Production under Divided Ownership: Evidence from Coalbed Methane
- The Hyperbolic Punishment Function
- Patent Litigation and the Role of Enforcement Insurance
- Contractual Democracy
