Dynamic Amnesty Programs

Sam Kapon

American Economic Review, 2022, vol. 112, issue 12, 4041-75

Abstract: A regulator faces a stream of agents engaged in crimes with stochastic returns. The regulator designs an amnesty program, committing to a time path of punishments for criminals who report their crimes. In an optimal program, time variation in the returns from crime can generate time variation in the generosity of amnesty. I construct an optimal time path and show that it exhibits amnesty cycles. Amnesty becomes increasingly generous over time until it hits a bound, after which the cycle resets. Agents engaged in high return crime report at the end of each cycle, while agents engaged in low return crime report always.

JEL-codes: D82 D86 K42 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1257/aer.20211428

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