Heterogeneity and Optimal Self-Reporting

Authors: Feess, Eberhard; Walzl, Markus

Source: Journal of Institutional and Theoretical Economics JITE, Volume 162, Number 2, June 2006 , pp. 277-290(14)

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Abstract:

We consider a model of optimal law enforcement according to which self-reporting may be considered in mitigation. After committing a crime, individuals get a private update of their probability of apprehension. Hence, self-enforcing has an option value of self-reporting, since criminals can decide whether or not to come forward after they have learned their types. We show that the optimal fine reduction is decreasing in the heterogeneity of the criminals' types if types are uniformly distributed. For general distribution functions, however, there are countervailing effects, which are discussed in a concluding section.

Document Type: Research article

DOI: http://dx.doi.org/10.1628/093245606777583558

Publication date: 2006-06-01

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Founded as Zeitschrift f�r die gesamte Staatswissenschaft in 1844.

As one of the oldest journals in the field of political economy, the Journal of Institutional and Theoretical Economics (JITE) deals traditionally with the problems of economics, social policy, and their legal framework. JITE is listed in the Journal of Economic Literature, the Social Science Citation Index, the International Bibliography of the Social Sciences, and COREJ.
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