Using Bounded Rationality to Fight Crime

28 Pages Posted: 10 Feb 2013 Last revised: 25 Feb 2013

See all articles by Daniel Pi

Daniel Pi

Mitchell Hamline School of Law

Date Written: February 10, 2013


Law and economics scholars have traditionally modeled criminal deterrence as a function two factors: severity of punishment, and probability of punishment. Gary Becker’s (1968) seminal essay suggested that optimizing on the benefits of crime reduction and the cost of punishment and policing should be the policy objective of the criminal law (at least with respect to deterrence). However, this model has been attacked on two fronts. First, criminological data on crime rates fails to show a strong correlation between the predictions of economic models and crime rates in the real world. Second, developments in behavioral economics suggest that individuals (criminals in this case) often fail to respond rationally to incentives. This paper seeks to reconcile the tension between the results of economic theory, criminological data, and behavioral psychology, offering a more realistic goal for the criminal law: inducing second-order biases not to commit crime.

Keywords: bounded rationality, bias, heuristic, deterrence, criminal deterrence, benevolent biasing, cognitive leveraging

JEL Classification: D03, K14, K42

Suggested Citation

Pi, Daniel, Using Bounded Rationality to Fight Crime (February 10, 2013). Available at SSRN: or

Daniel Pi (Contact Author)

Mitchell Hamline School of Law ( email )

875 Summit Ave
St. Paul, MN 55105-3076
United States

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