The Economics of Scams

Review of Law and Economics 13(1): 1-18

Posted: 23 Feb 2017

See all articles by Derek Pyne

Derek Pyne

Thompson Rivers University - School of Business and Economics

Stan Miles

Thompson Rivers University

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

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

Derek Pyne (Contact Author)

Thompson Rivers University - School of Business and Economics ( email )

900 McGill Road
Kamloops, British Columbia V2C 0C8
Canada

Stan Miles

Thompson Rivers University ( email )

900 McGill Road
IB2008
Kamloops, BC V2C 5N3
Canada

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