Optimal Punishment Schemes with State-Dependent Preferences.
The optimal trade-off between the certainty and severity of punishment is studied in a setting in which individuals are more sensitive to changes in certainty than severity and have state-dependent preferences--being convicted of a crime reduces utility at every wealth level. In this setting, it is not optimal to set the probability of punishment at one even if it is costless in convict criminals because reducing the certainty of punishment also reduces the probability that offenders' utility functions shift downward. The optimal level of certainty is therefore lower than that implied by prior studies based on state-independent preferences. Copyright 1998 by Oxford University Press.
Year of publication: |
1998
|
---|---|
Authors: | Neilson, William S |
Published in: |
Economic Inquiry. - Western Economic Association International - WEAI. - Vol. 36.1998, 2, p. 266-71
|
Publisher: |
Western Economic Association International - WEAI |
Saved in:
Saved in favorites
Similar items by person
-
A Further Examination of Cumulative Prospect Theory Parameterizations.
Neilson, William S, (2002)
-
Reference Wealth Effects in Sequential Choice.
Neilson, William S, (1998)
-
Comparative Risk Sensitivity with Reference-Dependent Preferences.
Neilson, William S, (2002)
- More ...