Punishment and Symbolic Social Exchange: The Unnecessary Victims of Criminal Justice

This article explores the essence of criminal punishment as an element of symbolic social exchange based on social exchange theory, cultural psychology, and the economics of crime using the example of the death penalty and imprisonment. The study concludes that the choice of punishment for a crime depends entirely on the cultural characteristics of society. The commodity in this exchange is the lifetime of a person, the value of which depends on standard of living and the welfare of society. That is why capital punishment and imprisonment are more often used in countries with lower standards of living. For the same reason, imprisonment rate correlates with homicide rate. The higher the homicide rate, the lower the value of a person’s life in a particular country, and the more often imprisonment is used. Raising standards of living increases the marginal harmfulness of criminal punishment, which stimulates its reduction. At the same time, the deflation of criminal punishment for violent crimes is slowing due to decreased tolerance for violence in modern society

Economics of the Broken Window Theory

In this paper, we argue that there is strategic complementarity in criminal behavior. Strategic complementarity arises because the apprehension probability that affects the crime rate depends on the crime rate itself. The natural consequence is the possible multiplicity of the equilibrium crime rate. The actual crime rate is realized by the self-fulfilling nature of the crime rate. Our analysis provides an economic rationalization of the broken window theory as the result of strategic complementarity and self-fulfilling crime rates. Regardless of how effective polices prescribed by the broken window theory are (e.g. removing graffiti, reducing trash in the street, and repairing broken windows), our model demonstrates the theory’s important contribution of introducing to the economics of crime the idea of belief-based deterrence. We also show that the equilibrium crime rate is stable whenever the broken window policy targets the lowest among multiple equilibrium crime rates.

Can personality traits explain compliance behaviour? - A study of compliance with water-protection rules in German agriculture

Going beyond the rational choice approach used in conventional economics of crime, the question arises whether psychological personality traits analysis can contribute to a better understanding of non-compliance and, eventually, to the prevention of illicit behaviours. This study investigated how personality traits are related to compliance with environmental regulation in agriculture. The object of study was a water-protection rule that required farmers using fertilising to keep it a minimum distance away from nearby water bodies. Self-interested infringements can cause serious environmental damage to waters (negative externalities) through nitrogen runoff. In a survey among German farmers, we employed a 10-item version of the Big Five Inventory to measure the traits that are used as predictor variables in a regression analysis. The outcome variable was the farmers’ compliance behaviour in a business management game where rule-breaking was more profitable than rule-abidance. Some noteworthy findings were observed in the surveyed sample. (i) Neuroticism was positively related to ‘overall compliance’, measured as a binary yes/no variable; that is, more anxious farmers were less prone to rule-breaking. Surprisingly, however, a positive relationship between neuroticism and compliance was not found when looking separately at the deviant subgroup; here, greater neuroticism was associated with more severe rule violations, in terms of illicitly fertilised acreage. (ii) In the deviant subgroup, as might have been expected, higher levels of conscientiousness were associated with less severe rule-violations. Contrary to expectations, again, higher levels of agreeableness were linked to more severe non-compliance. A substantial positive relationship was found between extraversion and the severity of non-compliance, in accordance with ex-ante expectation. For openness to experience, no noteworthy results were obtained. The results indicate that agents with heterogeneous personality traits might react differently to identical economic and institutional environments. Moreover, it is suggested that, other than traits, there is another quality in agents (e.g. social control) that may have a decisive influence on their belonging to the compliant or non-compliant subpopulation. Farmers’ responses to changes brought forward by regulators who aim to prevent rule-breaking might therefore differ as well.

Gang Rivalry and Crime: A Differential Game Approach

This study contributes to the modern literature on the economics of crime by proposing and solving two models of a differential game that considers the dynamic strategic behavior of two gangs engaged in a territorial conflict. The police force acts as the leader in the game. In the first model, each gang is concerned solely by the actions of the other, thus leading to an equilibrium wherein the greater one gang’s criminal activity, the greater the rival gang’s criminal activity. In the second model both gangs account primarily for police activities aimed at maintaining law and order, thus leading to an equilibrium wherein the gangs respond directly to the law enforcement activities of the police force. Exploratory analyses employing gang-related crime and police activities in Los Angeles provide empirical support for the main features of both models of the differential game, such as how gang rivalry fuels criminal activity and how the role of police is crucial in reducing gang-related crime.