Research Handbook on the Economics of Criminal Law

Research Handbook on the Economics of Criminal Law

Research Handbooks in Law and Economics series

Edited by Alon Harel and Keith N. Hylton

Jeremy Bentham and Gary Becker established the tradition of analyzing criminal law in utilitarian and economic terms. This seminal book continues that tradition with specially commissioned, original papers that span the philosophical foundations of the use of economics in criminal law, both traditional economic perspectives and behavioral and experimental approaches to the discipline.

Chapter 4: Accuracy in Criminal Sanctions

Robert A. Mikos

Subjects: economics and finance, law and economics, law - academic, criminal law and justice, law and economics


Robert A. Mikos 1. INTRODUCTION Law and economics scholarship suggests that criminal sanctions should equal the harm caused by a crime, divided by the probability the criminal will be detected and punished (Becker 1968; Shavell 2004). The formula for optimal sanctions is thus Si 5 Hi / p. Si is the nominal sanction imposed and Hi is the harm caused in an individual case. When the legal sanction is fixed by this formula, it is considered accurate1 in the sense that it reflects the exact harm caused in a particular case.2 For example, the sanction for causing $10,000 in harm would be exactly double (23) the sanction for causing $5000 in harm, holding p constant. As scholars have shown, accurate sanctions give persons optimal incentives to engage (or not) in criminal behavior; namely, they will do so only if the private benefits of crime (b) exceed the harms. In individual cases, however, criminal law regularly imposes sanctions that are smaller or larger than the ratio Hi / p prescribes (Mikos 2006). For example, suppose that D1 and D2 each commit a separate robbery involving the identical criminal act (actus reus); e.g., each pushes a victim and grabs a bag containing $100 cash. Suppose, however, that D1’s victim (A) dies of a heart attack triggered by the robbery, while D2’s victim (B) suffers only minor scrapes and bruises. Although D1 and D2 have caused dramatically different harms, they would be punished identically in many jurisdictions. In effect, the law would...

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