Thread by @eugen_dimant

🚨WP on deterrence & optimal design of institutions🚨
(w/ colleagues @econ_uzh @UniCologne @kielinstitute)

RQ: How to design institutions effective at deterring deviant behavior & recidivism?
A: Proper use of swiftness & uncertainty

Paper: bit.ly/2SJ9D63

Thread 1/n

Governments use substantial resources to keep society safe and punish people for criminal acts. Mass incarceration is both costly and ineffective.

Understanding how to design proper institutions is important from both the social and economic perspective.

A vast literature on criminal deterrence has focused on the relevance of the certainty and severity of punishment in deterring deviant behavior (following the Becker tradition).

We examine a third and understudied element (see HOPE program): celerity (swiftness of punishment)

Increasing a punishment's certainty or punishment's severity is costly (incarceration costs, personnel etc). We argue that the timing of punishment, & timing at which individuals are informed about the consequences, can be both powerful and available at comparably low cost.

Goal: to experimentally study the role of timing & uncertainty in the context of deterrence.
In particular, we study how the timing of sanctions (be it conviction or sentencing) & the timing of the resolution of uncertainty for sanctions affects deterrence & recidivism.

We systematically vary the celerity of a sanction within a new, stylized, experimental paradigm along the following two dimensions: first, we vary the delay between offense and detection/conviction; second, we vary the delay between offense and sanctioning.

Experimental analysis is based on a simple cheating game: subjects may cheat in some periods to increase payoffs. After these periods an investigation takes place such that cheaters will be detected and fined with a given probability. Timing as described is varied accordingly

Main (surprising) finding: deterrence is most effective when swiftness is
⋅ highest & no uncertainty (super efficient institutions)
⋅ lowest & maximum uncertainty (super inefficient institutions)
Both clearly outperform the middle cases.
Everything also holds for recidivism.

Our results cannot be explained with discounting, anticipatory utility, or intertemporal utility models (Caplin & Leahy 2001 etc.). Recently, Baucells & Bellezza (2016 MS) extended anticipatory utility by a reference point, a utility of recall & magnitude effect in discounting.

Their model allows deriving the optimal duration of anticipation for a given event, which might be interior. In our context, this potentially gives rise to a u-shaped relationship between the delay of punishment and deterrence.

Policy implications: results imply that punishment should either follow the criminal act quickly or be sufficiently delayed to maximize deterrence. As immediate punishment may be relatively costly, an optimally delayed punishment could be the most efficient solution

/end

Insights of potential interest to @jenniferdoleac @causalinf @JohnFPfaff
I don’t know that many crime economics folks on here - sharing with them is appreciated