Hide or show? Endogenous observability of private precautions against crime when property value is private information

Florian Baumann, Philipp Denter and Tim Friehe

No 115, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: This paper analyzes a contest in which defenders move first, have private information about the value of the objects they are trying to protect, and determine the observability of their defense efforts. The equilibrium consistent with the intuitive criterion depends on the distribution of defender types, the magnitude of the difference between defender types, and the asymmetry between defender and aggressor regarding the valuation of the objects at stake in the contest. Our setting captures key characteristics of the interaction between households and thieves, focusing on the classic distinction between observable and unobservable private precautions against crime. An analysis of welfare implications determines that a setting in which information about the value of the protected objects is private results in a better outcome than a complete-information scenario.

Keywords: Contest; Private Information; Timing; Crime; Private Precaution Against Crime (search for similar items in EconPapers)
JEL-codes: D62 D82 K42 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cta, nep-dem and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:115

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