Rizzolli, Matteo; Stanca, Luca - Dipartimento di Economia, Metodi Quantitativi e … - 2009
The standard economic theory of crime deterrence predicts that the conviction of an innocent (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,...