Multiple Equilibria and Equilibrium Selection in the Crime Commission Game

Matthew Baker and Miceli Thomas J. ()
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Miceli Thomas J.: Department of Economics, University of Connecticut, Storrs, CT, USA

Review of Law & Economics, 2024, vol. 20, issue 3, 403-412

Abstract: The deterrence function of criminal punishment relies on the credibility of enforcers to carry out threatened sanctions. That credibility may be suspect when enforcers face budgetary constraints, especially if the realized crime rate is high. This leads to the potential for multiple equilibria in the “crime commission game” – one involving a low crime rate, and one involving a high crime rate. The latter potentially arises because a high rate of crimes may overwhelm the ability of enforcers to apprehend offenders, thus leading to a self-fulfilling outcome. When multiple equilibria are possible, the question of which one is “selected” has practical as well as theoretical relevance. The paper assesses the implications of various selection criteria, including payoff dominance, risk dominance, and the global games approach. The conclusions highlight the role of the credibility of punishment in deterring crime, and also shed light on the interpretation of data on crime and punishment.

Keywords: crime and punishment; multiple equilibria; equilibrium selection (search for similar items in EconPapers)
JEL-codes: C72 K14 K42 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1515/rle-2024-0113

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