When Good People Do Bad Things: Time-Inconsistent Misconduct & Criminal Law
60 Pages Posted: 10 Apr 2006 Last revised: 14 Apr 2011
Date Written: March 30, 2006
Abstract
This article develops a model of time-inconsistent criminal misconduct. It shows that people who from a long-term perspective want to be law-abiding may nonetheless engage in repeated misconduct due to the pull of their short-term preferences for immediate gratification. I demonstrate that the optimal sanctions under the standard law & economics model will always under-deter time-inconsistent wrongdoers. This is true, even for wrongdoers with a very small preference for immediate gratification. The model yields a second counterintuitive conclusion: wrongdoers who intend to engage in criminal misconduct (because it has positive expected returns) will procrastinate following through if they face sufficiently high immediate costs - i.e., they may exhibit time-inconsistent honesty. This allows policymakers to indirectly regulate behavior by exploiting the time-inconsistency of citizens. Such stealth regulation raises questions of democratic accountability, as well as numerous moral considerations. Finally, the model explains several existing criminal law doctrines that, from a standard law and economics perspective, are puzzling.
Keywords: criminal law, optimal deterrence, repeat offenders, behavioral law & economics, time-inconsistent preferences
JEL Classification: K00, K14, K42, D60
Suggested Citation: Suggested Citation