Self-Reporting in Optimal Law Enforcement When There are Criminal Teams
Aachen Micro Working Paper 02/02
24 Pages Posted: 9 Apr 2002
Date Written: April 2, 2002
We extend the analysis of optimal self-reporting schemes to criminal teams. This leads to strategic interactions, because the fine can be made dependend on whether the accomplice self-reports or not. When the violators behave non-cooperatively in the self-reporting stage, maximum deterrence can be reached at virtually no cost by giving a break to a single self-reporter, but imposing almost the maximum fine if both self-report. Self-reporting is then a dominant strategy and both criminals bear the maximum fine in equilibrium. The first drawback of such a scheme is that it might induce cooperative behavior in the self-reporting stage. If the cooperation rate is increasing in the benefit from cooperation, it is optimal to impose less than the maximum fine if both self-report. The same result occurs for imperfect self-reporting technologies in the sense that self-reporting of one agent leads to conviction of his accomplice with a probability less than one. We compare our findings to leniency programs existing in reality.
Keywords: self-reporting, optimal law enforcement, crime, criminal teams, corruption, leniency programs
JEL Classification: D62, D82, H50, K42
Suggested Citation: Suggested Citation