This paper re-examines the literature on optimal penalties and the allocation of resources to enforcement from the viewpoint of incentive theory. It is assumed that an agent might perform a socially harmful act. In contrast to previous analyses, the agent might also perform profit-enhancing...

Increasing criminal sanctions may reduce crime through two primary mechanisms: deterrence and incapacitation. Disentangling their effects is crucial, since each mechanism has different implications for optimal policy setting. I use the introduction of state add-on gun laws, which enhance...

In 2007, the Wall Street Journal published an article claiming that each execution saves more than 70 lives. This example is used to show how easy it is, using simple or advanced econo-metric techniques, to produce results that do or do not support the deterrence hypothesis. Moreover, we also...