Self-Reporting in Optimal Law Enforcement When There are Criminal Teams

Aachen Micro Working Paper 02/02

24 Pages Posted: 9 Apr 2002

See all articles by Markus Walzl

Markus Walzl

RWTH Aachen University - Chair for Economics (Microeconomics)

Eberhard Feess

Frankfurt School of Finance & Management gemeinn├╝tzige GmbH

Multiple version iconThere are 2 versions of this paper

Date Written: April 2, 2002

Abstract

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

Walzl, Markus and Feess, Eberhard, Self-Reporting in Optimal Law Enforcement When There are Criminal Teams (April 2, 2002). Aachen Micro Working Paper 02/02. Available at SSRN: https://ssrn.com/abstract=305480 or http://dx.doi.org/10.2139/ssrn.305480

Markus Walzl (Contact Author)

RWTH Aachen University - Chair for Economics (Microeconomics) ( email )

Aachen, 52056
Germany
0049 241 809 6157 (Phone)
0049 241 809 2345 (Fax)

Eberhard Feess

Frankfurt School of Finance & Management gemeinn├╝tzige GmbH ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

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