An Economic Assessment of Criminal Behaviour

Cain Michael ()
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Cain Michael: School of Business, International University, Vietnam National University – HCMC, Linh Trung Ward, Thu Duc District, Ho Chi Minh City, Vietnam

Review of Law & Economics, 2016, vol. 12, issue 1, 77-94

Abstract: A utility maximising framework for criminal behaviour is developed and a number of precise functional forms considered for the utility function of a representative criminal. The Kahneman–Tversky form seems to fit current empirical evidence, expressed mainly as the ratio of certain elasticities, better than some other candidates but a more general Markowitz function, centred at current wealth, is another possibility. The criminal’s optimal level of crime is obtained and comparative statics derived to help suggest how crime might be controlled. The solution involves an upper limit on the odds against detection of the criminal. Further empirical work is encouraged to ascertain if crime is a favourable bet and to elicit the utility function of a representative criminal in this analytical framework.

Keywords: PsycINFO classification codes; 2240; 3236; 4270; crime; detection; punishment; utility; loss-aversion; PsycINFO classification codes; 2240; 3236; 4270 (search for similar items in EconPapers)
JEL-codes: D11 D80 K42 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1515/rle-2013-0045

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