For questions 44 and 45 consider the following: The town of Fenerbahce has hired world-class econometricians to investigate their criminal justice system. The researchers report an interesting finding. People who were previously detected and punished by law enforcers gain a better understanding of the functioning of the law enforcement system, and are better able to exploit laws designed to protect defendants against the state. Thus, people who have been detected and punished before are better able to avoid detection and punishment. In particular, they report the following facts: The offense of jay-walking causes social harm of $100. A person who has never been punished for jaywalking before faces a 0.5 probability of being detected while jaywalking. A person who has been punished before for jaywalking faces a probability of 0.25 of being detected while jaywalking. The town wants to implement optimal punishment schemes. It is well known that everyone in Fenerbahce is risk-neutral and rich (i.e. not judgment proof). Moreover, the town does not have an option of changing the probability of detection (they are fixed at 0.5 and 0.25 as described above). In the questions below, a first-time offender refers to a person who is being punished for the first time, and, a repeat offender is a person who has been punished before and is facing punishment again. If Sf is the punishment for first time offenders and Sr is the punishment for repeat offenders, which of the below lists the optimal sanction pair? A. Sf=$50 and Sr=$4 B. Sf =$200 and Sr =$400 C. Sf =$500 and Sr =$40 D. Sf =$50 and Sr =$400 E. None of the above report the optimal sanction pair.
For questions 44 and 45 consider the following:
The town of Fenerbahce has hired world-class econometricians to investigate their criminal justice system. The researchers report an interesting finding. People who were previously detected and punished by law enforcers gain a better understanding of the functioning of the law enforcement system, and are better able to exploit laws designed to protect defendants against the state. Thus, people who have been detected and punished before are better able to avoid detection and punishment. In particular, they report the following facts:
- The offense of jay-walking causes social harm of $100.
- A person who has never been punished for jaywalking before faces a 0.5 probability of being detected while jaywalking.
- A person who has been punished before for jaywalking faces a probability of 0.25 of being detected while jaywalking.
The town wants to implement optimal punishment schemes. It is well known that everyone in Fenerbahce is risk-neutral and rich (i.e. not judgment proof). Moreover, the town does not have an option of changing the probability of detection (they are fixed at 0.5 and 0.25 as described above). In the questions below, a first-time offender refers to a person who is being punished for the first time, and, a repeat offender is a person who has been punished before and is facing punishment again.
If Sf is the punishment for first time offenders and Sr is the punishment for repeat offenders, which of the below lists the optimal sanction pair?
| A. |
Sf=$50 and Sr=$4
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| B. |
Sf =$200 and Sr =$400
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| C. |
Sf =$500 and Sr =$40
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| D. |
Sf =$50 and Sr =$400 |
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| E. |
None of the above report the optimal sanction pair. |
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