Optimal Case Selection by Law Enforcement Agencies
44 Pages Posted: 22 Oct 2011 Last revised: 2 Aug 2013
Date Written: October 21, 2011
This article has been significantly revised. Please refer to the revised version, titled “Allocating Regulatory Resources”, which is available on SSRN at: http://ssrn.com/abstract=2304434.
This article incorporates the concept of legal placebo effects into law enforcement agencies’ case selection criteria. The article critiques the case selection framework that views enforcement as a tradeoff between enforcement costs and deterrence of wrongdoing (i.e., the effect of enforcement on potential wrongdoers’ risk perception), because it ignores the placebo effect of law enforcement: the effect of enforcement on potential victims’ risk perception. The article then identifies enforcers’ private interests that result in under- or over-enforcement. The concept of bias arbitrage (creation of legal placebos for private gain) identifies when actors have incentives for inefficient enforcement. The role of bias arbitrage in an agency’s case selection grows the more politically-sensitive the agency is. Political-sensitivity depends, in turn, on the applicable enforcement allocation structure: rules that determine which actors set the constraints that determine case selection.
Keywords: Optimal deterrence, law enforcement, case selection, placebo effect, bias arbitrage
JEL Classification: D73, D78, H40, K14, K42
Suggested Citation: Suggested Citation