A DYNAMIC GAME OF OFFENDING AND LAW ENFORCEMENT

Thomas Fent, Gustav Feichtinger and Gernot Tragler ()
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Gernot Tragler: Institute for Econometrics, Operations Research and System Theory, Vienna University of Technology, Vienna, Austria

International Game Theory Review (IGTR), 2002, vol. 04, issue 01, 71-89

Abstract: In this paper, we analyse a differential game describing the interactions between a potential offender and the law enforcement agency. We assume that both players want to maximise their welfare expressed in monetary units, and compare the results obtained by applying the Nash equilibrium concept under symmetric with that under asymmetric information. The comparison reveals that under asymmetric information the offence rate is lower, due to the deterrence caused by the activities of the law enforcement agency. Both players' controls start at a steady state value and stick to it until close to the end of the planning horizon, when they leave the steady state to take into account the scrap value; this can be interpreted as a turnpike property of Nash equilibria. Furthermore, a sensitivity analysis is carried out. Among others, it turns out that a myopic offender tends to a higher offence level.

Keywords: Economics of Crime; Law Enforcement; Differential Game; Symmetric Information; Asymmetric Information (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2002
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DOI: 10.1142/S0219198902000550

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