Wirtschaftswissenschaft
Thomas J. Miceli
Escalating Penalties for Repeat Offenders: Why are they So Hard to Explain?
Jahrgang 169 (2013) / Heft 4, S. 587-604 (18)
Escalating penalties for repeat offenders are a pervasive feature of punishment schemes in various contexts, but economic theory has had a hard time rationalizing the practice. This paper reviews the literature on escalating penalties, and then develops a theory based on uncertainty on the part of enforcers about offenders' gains from committing socially undesirable acts. The analysis derives the conditions under which escalating penalties are both optimal (cost-minimizing) and subgame-perfect. It goes on to discuss several extensions and qualifications.