Subgame Perfect Punishment for Repeat Offenders

Winand Emons

No 3667, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: First we show that for wealth-constrained agents who may commit an act twice, the optimal sanctions are the offender's entire wealth for the first crime, and zero for the second. Then we ask whether this decreasing sanction scheme is subgame perfect (time consistent), i.e., does a rent-seeking government stick to this sanction scheme after the first crime has occurred? If the benefit and/or the harm from the crime are not too large, this is indeed the case; otherwise, equal sanctions for both crimes are optimal.

Keywords: Crime and punishment; Repeat offenders; Subgame perfection (search for similar items in EconPapers)
JEL-codes: D82 K41 K42 (search for similar items in EconPapers)
Date: 2002-11
New Economics Papers: this item is included in nep-law
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Journal Article: Subgame-Perfect Punishment for Repeat Offenders (2004)
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