Criminal law and economics rests on the expectation that deterrence incentives can be employed to reduce crime. Prison … survey evidence however suggests that a majority of criminals are biased and may not react to deterrence incentives. This … study employs an extra-laboratory experiment in a German prison to test the effectiveness of deterrence. Subjects either …

the deterrence hypothesis, namely that crime is weakly decreasing in deterrent incentives, i.e. severity and probability … and within sessions. The across subject analysis clearly rejects the deterrence hypothesis: except for very high levels of … to the deterrence hypothesis and fair-minded subjects for whom deterrent incentives backfire. …