This presentation is part of: D70-1 Public Choice

The Economics of Crime Reconsidered

Joe McGarrity, Ph.D, Economics, UCA, BBA 304, Burdick Bussiness Building, 201 Donaghey Avenue, Conway, AR, AR 72035

Abstract: The standard economic approach in the study of crime holds that a potential criminal is less likely to commit a crime when penalties are increased. This paper considers the effect of the penalty in a two player game between the police and the criminal – when policing effort is a cost that police would like to avoid. In such a setting, I find that an increase in criminal penalties: 1) causes the police to exert less effort, and 2) does not impact the criminal's decision to commit the crime. This model is examined using data from Major League Baseball. In this analogy, the batter commits a crime if he leans into a pitch, which allows him to reach a ball thrown over the outside portion of the plate. The pitcher acts like a policeman by throwing a bean ball to catch the batter if he leans into the pitch. When a pitcher can throw with greater velocity, the batter will face a larger cost from getting hit with the pitch, simply because it hurts more. This is much like a criminal facing a bigger fine if he gets caught. The game theoretic result is that the high velocity pitcher will throw inside less, because he doesn't need to do so as often. The standard approach of the economics of crime, which does not use game theory, would assume the batter, not the pitcher, would change his behavior when a pitcher can throw with above average velocity. The number of inside pitches thrown by pitchers in the 2007 season support the mixed strategy equilibrium approach.