Negotiated Enforcement and Credible Deterrence

27 Pages Posted: 14 May 1998

Multiple version iconThere are 2 versions of this paper

Date Written: March 1998

Abstract

This paper develops a model of law enforcement in which indicted offenders and the prosecutor can negotiate the penalty prior to the completion of the investigation. The analysis focuses on the credibility of the conviction threat: the prosecutor cannot commit to any predetermined level of investigative effort should the negotiation fail. The introduction of the settlement stage brings about several novel features of the optimal enforcement policy, one of which is the possibility that maximum sanctions are not optimal. We show that the screening out of guilty defendants weakens of the overall deterrent power of law enforcement, since it lowers the prosecutor's incentive to carry out a thorough investigation after a failure to settle. Thus settlements increase both the ex-post net recovery from possibly guilty agents (cost saving) and the level of crime (deterrence dilution). This result, however, may be reversed when the prosecutor is subject to a budget constraint: in this case, settlements may actually increase the deterrent power of the given resources.

JEL Classification: K42, K41

Suggested Citation

Franzoni, Luigi Alberto, Negotiated Enforcement and Credible Deterrence (March 1998). Available at SSRN: https://ssrn.com/abstract=87712 or http://dx.doi.org/10.2139/ssrn.87712

Luigi Alberto Franzoni (Contact Author)

University of Bologna ( email )

P.zza Scaravilli 2
Bologna, 40124
Italy
0512098488 (Phone)
+39-051-221968 (Fax)

HOME PAGE: https://www.unibo.it/sitoweb/luigi.franzoni/en

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