Subgame-Perfect Punishment for Repeat Offenders

Winand Emons

Economic Inquiry, 2004, vol. 42, issue 3, 496-502

Abstract: First I show that for wealth-constrained agents who may commit an act twice the optimal sanctions are the offender's entire wealth for the first and zero for the second crime. Then I ask the question whether this decreasing sanction scheme is subgame perfect (time consistent), that is, 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. (JEL D82, K47, K42) Copyright 2004, Oxford University Press.

JEL-codes: D82 K42 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (24)

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Working Paper: Subgame Perfect Punishment for Repeat Offenders (2002)
Working Paper: Subgame Perfect Punishment for Repeat Offenders (2002)
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