Volume 11, Issue 3 -

Offering defendants a sanction reduction if they agree to plead guilty at an early stage in criminal proceedings represents one form of “plea bargaining”. As with the better known form, where a defendant agrees to plead guilty to a lesser charge in exchange for the dropping of a more serious charge, it is motivated by a wish to reduce expenditure on the criminal justice system. In England and Wales sentencing discounts have been used as part of an effort to reduce the high proportion of criminal cases that end in a “cracked trial” where a defendant who had originally pleaded not guilty changes their plea to guilty “at the courtroom door”. The paper presents a model of sentencing discounts and looks also at the closely-related issue of attorney compensation and the associated agency issues. Using data on “cracked trials” from England and Wales and evidence from the US on the relationship between plea bargaining and attorney compensation we argue that sentencing discounts alone may not be a very effective way of economising on legal resources unless they are supported by an appropriate structure of payments to defence lawyers.

This paper studies marginal deterrence in the presence of a basic and an aggravated harm when the occurrence of the latter may be reduced by criminals exerting costly precaution. We determine the optimal probability of fines when the enforcement authority provides incentives such that, if criminals commit offenses, they exert precaution. We show that marginal deterrence is fully optimal, even for severe basic harms. That is, the fine associated with the basic harm is not equal to the maximal sanction, the criminal’s wealth. Moreover, implementing marginal deterrence leads to the use of fines and the probability of being caught and sanctioned in a different way compared to Becker’s well-known result.

This paper presents a game-theoretic model of crime and self-defense with gun use. The main purpose is to evaluate gun control policy effectiveness on crime reduction. The effects of assumption regarding the type of information agent’s possess and some extensions such as criminals’ skills advantage and different costs in gun carrying are studied. The results show that policies that increase gun availability make criminals always carry guns, even if they have a fighting advantage over the victims. The main conclusions are that gun control under complete information assumption leads to a decrease of gun crimes and that such policies are more effective to reduce crime when they affect both criminal’s and victim’s costs. Under incomplete information gun control generates multiple equilibria where criminals alternate between crimes with and without guns. In this case the effects of gun policy on crime depend on the share of population type.

The main purpose of this paper is to show that the set of efficient rules which apportion liability between the victim and the tortfeasor is much larger than is generally believed to be the case. A larger set of efficient rules in general would have the implication of a less sharp conflict between economic efficiency on the one hand and non-efficiency normative criteria on the other. The condition of negligence liability which characterizes efficiency in the context of liability rules has an all-or-none character. Negligence liability requires that if one party is negligent and the other is not then the liability for the entire accident loss must fall on the negligent party. Thus within the framework of standard liability rules efficiency requirements preclude any non-efficiency considerations in situations where one party is negligent and the other is not. In this paper it is shown that accident loss can be decomposed into two parts such that while the apportionment of one part between the parties has bearing on efficiency, the apportionment of the other part has no efficiency implications. The part of accident loss which plays no role in providing appropriate incentives to the parties for taking due care can therefore be apportioned on non-efficiency considerations without in any way compromising the social goal of efficiency. For a systematic analysis of the requirements for efficiency, in this paper a notion more general than that of a liability rule, namely that of a decomposed liability rule, is introduced. A complete characterization of efficient decomposed liability rules is provided in the paper. The most important implication of the theorems of this paper is that by decomposing accident loss into two parts, the scope for non-efficiency considerations can be significantly broadened without sacrificing economic efficiency.

Fines are an efficient method of sanctioning since the burden on the taxpayer for enforcing it is low and the offender is transferring wealth to society. However, using law-and-economics analysis, this paper suggests that the day-fine is a superior model to other forms of fines. This pecuniary measure takes into account the income of the offender and the severity of the offense. Consequently, criminals with different socioeconomic status committing the same crime would pay the same portion of their wealth but not the same absolute amount of money. Using this structure, the day-fine has a potential to deter equally both the rich and the poor and to avoid the costly sanction of imprisonment.

This article aims to clarify the relationship between the law and social norms and examine how they interact – whether the law completely replaces, or coexists with, the pre-existing social norms. We model a close-knit society consisting of injurers and victims, assuming that both the law and social norms maximize social welfare and that the costs of enforcing legal penalties are greater than those of enforcing social norms. We find that social norms completely replace the law, even in a non-cooperative Nash equilibrium; we then develop exceptions to this result. In particular, when community sanctions for violating social norms are calibrated without consideration of its marginal social benefit due to a reduction in law enforcement cost, our model can have multiple equilibria, including cases in which legal sanctions persist even in the long run, in spite of their inefficiently high enforcement costs. However, we also show that this possibility of an inefficient non-cooperative equilibrium can be eliminated if the government behaves as a Stackelberg leader for the formation of social norms.

This study theoretically analyzes the effect of decoupling punitive damages under the adversarial system. Decoupling means taking punitive award windfalls away from plaintiffs and placing them into state-administered funds. In particular, it aims to reveal the incentive structure of decoupling and examine how this affects human behaviors. Although some commentators argue that decoupling punitive damages effectively disgorges plaintiffs of any potential windfall without diminishing the deterrent effect of punitive damages, we demonstrate that decoupling actually reduces the deterrence effect under the adversarial system.