Rewards versus Imprisonment: The Impact of Choice
Document Type
Article
Publication Date
3-2022
Journal Title
Review of Law & Economics
ISSN
1555-5879
DOI
10.1515/rle-2021-0047
Abstract
Imprisonment and monetary rewards for non-convictions can similarly incentivize potential offenders to refrain from committing crime. Although imprisonment is expensive, it may still enjoy a cost advantage over rewards. This is because only detected criminals are imprisoned, whereas rewards need to be provided to the remaining, much larger, population. In this article, I demonstrate that the possible cost disadvantages of rewards are mitigated when people are offered a choice between an enforcement scheme involving no rewards and another involving rewards coupled with longer imprisonment sentences. Specifically, by using rewards in this manner, one can jointly reduce crime, time served per convict, and the tax burden of the criminal justice system, under the same conditions as one could by introducing rewards without choice in an environment where there is perfect detection. Moreover, monetary rewards provide incentives through wealth transfers, but imprisonment operates by destroying wealth. This leads choice-based reward regimes to be optimal unless the imprisonment elasticity of deterrence is higher than is empirically observed.
First Page
69
Last Page
83
Num Pages
15
Volume Number
18
Issue Number
1
Publisher
De Gruyter
Recommended Citation
Murat C. Mungan,
Rewards versus Imprisonment: The Impact of Choice,
18
Rev. L. & Econ.
69
(2022).
Available at:
https://scholarship.law.tamu.edu/facscholar/1826