Heterogenity and Optimal Sef-Reporting

E. Feess, M. Walzl

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We consider a model of optimal law enforcement according to which self-reporting may be considered in mitigation. After committing a crime, individuals get a private update of their probability of apprehension. Hence, self-enforcing has an option value of self-reporting, since criminals can decide whether or not to come forward after they have learned their types. We show that the optimal fine reduction is decreasing in the heterogeneity of the criminals' types if types are uniformly distributed. For general distribution functions, however, there are countervailing effects, which are discussed in a concluding section.
Original languageEnglish
Pages (from-to)277-290
Number of pages13
JournalJournal of Institutional and Theoretical Economics
Volume162
Issue number2
DOIs
Publication statusPublished - 1 Jan 2006

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