Game theory and the Nash equilibrium concept can be used to study the interac- tion between criminals and law-enforcement agencies. Gary Becker, a Nobel Prize-winning economist, led the way on this kind of research and showed that economic analysis is extremely useful in this policy arena. According to Becker’s theory, “The optimal amount of enforcement is shown to depend on, among other things, the cost of catching and convicting offenders, the nature of punishments—for example, whether they are fines or prison terms—and the response of offenders to changes in enforcement.”6 Becker also argued that, with the optimal enforcement system, crime does occur.
Here is a game that illustrates how the government balances the social cost of crime with law-enforcement costs and how criminals balance the value of illegal activity with the probability of arrest. The game has two players: a criminal (C) and the government (G). The government selects a level of law enforcement, which is a number x Ú 0. The criminal selects a level of crime,
y Ú 0. These choices are made simultaneously and independently. The government’s payoff is given by
uG = −xc4 − y2>x with the interpretation that −y2>x is the negative effect of crime on society (moderated by law enforcement) and c4 is the cost of law enforcement, per unit of enforcement. The number c is a positive constant. The criminal’s payoff is given by uC = y1>2>(1 + xy), with the interpretation that y1>2 is the value of criminal activity when the criminal is not caught, whereas 1>(1 + xy) is the probability that the criminal evades capture. Exercise 4 of this chapter asks you to compute the Nash equilibrium of this game.
Consider the game between a criminal and the government described in this chapter.
(a) Write the first-order conditions that define the players’ best-response functions and solve them to find the best- response functions. Graph the best-response functions.
(b) Compute the Nash equilibrium of this game.
(c) Explain how the equilibrium levels of crime and enforcement change as c increases.
We confidently assure you high-quality work. We engage a number of strategies in order to guarantee top-level assignments. The projects go through a thorough system of control prior to being submitted to the customers. Studentscoursework.com guarantees that the assignments delivered are 100 percent plagiarism-free.
We never share or resell customer’s work. Therefore, once it is checked using our plagiarism software, the assignment will be original. In terms of assignment completion, we adhere to the guidelines given by you and assign the work to the most suitable writer. We assign our writers based on various factors such as academic qualification, previous customer feedback, etc.
First and foremost, we provide high-quality work. However, in case you require extra-brilliance, here is what you can do. First, select a top writer who is proficient in a certain discipline. Second, you can seek our editing services.
Our team of editors revises the assignments, checking them to ensure they comply with the standards of academic writings. Additionally, editing may entail refining the language, adding more reference material, and making sure the formatting part is properly done. The editors may also enhance papers completed by yourself in order to meet your needs.
We guarantee the following quality in our work to you:
We use the following tools to crosscheck our assignments:
We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.Read more
The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.Read more
The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.Read more
By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.Read more