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Judicial Errors and Crime Deterrence: Theory and Experimental Evidence

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  • Matteo Rizzolli
  • Luca Stanca

Abstract

The economic theory of crime deterrence predicts that the conviction of an innocent individual (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, loss aversion, or type I error aversion, type I errors have a stronger effect on deterrence than type II errors. We test these predictions with two experimental studies in which participants choose whether to steal from other individuals, under alternative combinations of probabilities of judicial errors. The results indicate that both types of errors have a significant impact on deterrence. As predicted, type I errors have a stronger impact on deterrence than type II errors. This asymmetry is entirely explained by differences in the expected utility gains from crime, whereas nonexpected utility factors do not play a significant role.

Suggested Citation

  • Matteo Rizzolli & Luca Stanca, 2012. "Judicial Errors and Crime Deterrence: Theory and Experimental Evidence," Journal of Law and Economics, University of Chicago Press, vol. 55(2), pages 311-338.
    • Handle: RePEc:ucp:jlawec:doi:10.1086/663346
    DOI: 10.1086/663346
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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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