Matteo Rizzolli

Judicial Errors and Crime Deterrence: Theory and Experimental Evidence

The economic theory of crime deterrence predicts that the conviction of an innocent individual (type I error) is as detrimental to deterrence as the acquittal of a guilty individual (type II error). In this paper, we qualify this result theoretically, showing that in the presence of risk aversion, loss aversion, or type I error aversion, type I errors have a stronger effect on deterrence than type II errors. We test these predictions with two experimental studies in which participants choose whether to steal from other individuals, under alternative combinations of probabilities of judicial errors. The results indicate that both types of errors have a significant impact on deterrence. As predicted, type I errors have a stronger impact on deterrence than type II errors. This asymmetry is entirely explained by differences in the expected utility gains from crime, whereas nonexpected utility factors do not play a significant role.

Wrongful Convictions Do Lower Deterrence

The conventional result of the theory of the public enforcement of law is that wrongful convictions of innocents are detrimental to deterrence. This proposition has been challenged recently. In some cases, wrongful convictions do not jeopardize deterrence, because they influence equally the innocent and the guilty. Therefore deterrence does not change. We show that, in general, wrongful convictions do lower deterrence. We prove that wrongful convictions do not jeopardize deterrence only in very limited circumstances or under unlikely assumptions.

In Dubio Pro Reo. Behavioral Explanations of Pro-defendant Bias in Procedures

The standard model of optimal deterrence predicts that the probability of wrongful conviction of the innocent is, at the margin, as detrimental to deterrence as the wrongful acquittal of guilty individuals. We extend the model in several directions: using expected utility as well as nonexpected utility to consider the role of risk aversion, non-linear probability weighting and loss aversion. We also consider how relevant emotions such as guilt, shame and indignation play out. Several of these factors support the intuition that wrongful convictions of the innocent do have a larger detrimental impact on deterrence and thus the policy implications are reconciled with the widely shared maxim in dubio pro reo. We then draw some theoretical implications such as a novel justification for the different standards of proof in criminal vs civil law as well as other policy implications.

The Cathedral: An Economic Survey of Legal Remedies

The law is about designing as well as enforcing rules. While economists put emphasis on the optimal design of norms, less attention is paid to understanding how the law actually enforces rules. An economic survey of legal remedies must necessarily begin with the work of Calabresi and Melamed (1972) on property rules and liability rules. In the cathedral (as the work is universally known) the two authors laid a transactional theory of remedies that captures the characteristics of most remedies across different branches of the law and that has powerful positive as well as normative implications. Since the original sketch, the literature has largely expanded the scope and applicability of the Calabresi and Melamed framework and has proven to be one of the most florid streams of literature in the law and economics field. In recent years the theory has been applied to some distant branches of the law and it has been enriched by the optional approach that borrows from the theory of financial derivatives.

Gender Effects in Injustice Perceptions: An Experiment on Error Evaluation and Effort Provision

As performances are rarely observable, evaluation errors may occur. We observe how women react to evaluation errors and wrongful reward assessment in organizations. In particular, we focus on severity and leniency errors in the evaluation of performances. Severity errors occur when workers do not receive the reward although they exerted high effort and reached the target. Leniency errors occur when workers are rewarded even when they exerted low effort and did not reach the target. They are both detrimental to motivation and effort provision. Our findings from a laboratory experiment show that, when gender is considered, asymmetric results are shown for men and women. Whereas males drop their contribution more under severity errors rather than leniency errors, female tend to do the opposite. We discuss these results contributing to the literature on organizational justice by investigating the role of gender in the perception of justice within organizations.