Philip A. Curry

What is a criminal organization and why does the law care

The Criminal Codes in both Canada and the United States allow for criminals to be penalized to a greater degree if they are a member of an organization. We draw on the economic theory of punishment, which states that expected penalty should be proportional to the social harm caused, to put a different perspective on such regulations. According to the economic theory, additional punishments are desirable if either: (1) the social harm from a criminal act is greater for a member of an organization than for an independent criminal; or (2) the probability of conviction is lower. We examine the extent to which both of these possibilities are true and use the findings to revisit the definition of a criminal organization.

INTEGRATING MARKET ALTERNATIVES INTO THE ECONOMIC THEORY OF OPTIMAL DETERRENCE

Leading economic models of crime assume that potential criminals achieve their ends by criminal means or not at all. We develop a framework in which potential criminals can also attain their objectives through voluntary trade. Our framework helps explain several features of the legal system that have proven to be problematic for the canonical approach: why optimal sanctions should be increasing in an individuals criminal history, and why necessity may be a partial defense in some situations. Finally, the inclusion of a voluntary trade option makes the maximization of a utilitarian welfare function identical to minimizing the costs of crime, implying that a long‐standing controversy in the literature is, in part, an artifact of the assumption that criminals face a binary choice set.

Evolutionary Stability of Kantian Optimization

In Nash equilibrium, agents are autarchic in their optimization protocol, whereas in Kantian equilibrium, they optimize in an interdependent way. Typically, researchers into the evolution of homo economicus treat preferences as being determined by selective adaptation, but hold fixed the optimization protocol as autarchic. Here, we ask whether natural selection might choose the optimizing protocol to be either autarchic or interdependent. That is, will Kantian players, for whom the stable concept is Kantian equilibrium drive Nash players (for whom the stable concept is Nash equilibrium) to extinction, or otherwise? The answer depends upon whether players can signal their type to others.

Crime, apprehension and clearance rates: Panel data evidence from Canadian provinces

The Becker ( ) model of crime establishes the importance of the probability of apprehension as a key factor in a rational individuals decision to commit a crime. In this respect, most empirical studies based on US data have relied on variation in the number of police officers to estimate the impact of the probability of apprehension or capture. We measure the probability of apprehension by clearance rates and study their effects on crime rates, employing a panel of Canadian provinces from 1986 to 2005. OLS, GMM, GLS and IV estimates yield statistically significant elasticities of clearance rates, ranging from 0.2 to 0.4 for violent crimes and from 0.5 to 0.6 for property crimes. These findings reflect the importance of police force crime-solving productivity.

Social Welfare and the Benefits to Crime

There exists a large literature on the optimal deterrence of crime. Within the literature, however, there exists a controversy over what the appropriate criterion to determine optimality should be. While the most popular method is that of maximization of a utilitarian welfare function, another criterion sometimes used is that of cost minimization. The controversy stems from the question of whether the benefits to crime enjoyed by criminals ought to be included in the welfare analysis. This paper argues that the controversy is an artifact of the fact that the standard model restricts a potential criminals choice to one of committing a crime or doing nothing. We show that when potential criminals are given the additional choice of achieving their ends through voluntary methods that maximizing the sum of utilities is in fact equivalent to minimizing the costs of crime. The model developed also provides explanations for sanctions that increase in ones criminal history and why necessity may be a partial defense.

Rock Concert Pricing and Anti-Scalping Laws: Selling to an Input

This paper develops a model that jointly explains excess demand for performance events and the presence of anti-scalping laws. The explanation is based on the fact that the buyers of tickets are also an important input into the performance experience. The use of line-ups as a screening mechanism (leading to apparent under-pricing of tickets) can be profit maximizing if the input quality of a given buyer and her willingness to pay for tickets are not sufficiently positively correlated. Such a mechanism is not possible, however, if the resale of tickets above the posted price is permitted. Since resale amounts to input substitution, banning such resale is therefore efficiency enhancing.

Tax Avoidance and the Optimal Design of Tax Law

Although most individuals recognize the necessity of taxation, few like to pay taxes. Governments face costs to collect taxes; people expend resources to legally avoid taxation. Such expenditure represents social waste, as it is a form of rent-seeking. Since there is a market for tax planning methods, the magnitude of these costs depends on the market structure. We consider how a government might reduce tax planning by creating market inefficiencies or failures. We set forth a formal economic model to identify the optimal amount of tax planning the government should permit, and consider how governmentally-created market failures could be implemented.