The Economics of Scams
Review of Law and Economics 13(1): 1-18
Posted: 23 Feb 2017
Date Written: March 2017
Abstract
This paper offers one of the first economic analyses of scams. Its major finding is that, unlike other crimes, imperfect enforcement may increase victimization by deterring only low-ability scammers whose failed attempts would otherwise alert potential victims before encounters with high-ability scammers. High-ability scammers may actually benefit from partial enforcement, which reduces their competition. These results may be reinforced when failed attempts are punished.
Keywords: scams, deterrence, crime, enforcement
JEL Classification: K42
Suggested Citation: Suggested Citation
Pyne, Derek and Miles, Stan, The Economics of Scams (March 2017). Review of Law and Economics 13(1): 1-18, Available at SSRN: https://ssrn.com/abstract=2921774
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