Social Status and Crime
GATE Working Paper No. W.P.05-10
28 Pages Posted: 7 Jun 2006 Last revised: 10 May 2010
Date Written: November 1, 2005
Abstract
We consider a large population of agents choosing either to engage in a criminal activity or working. Individuals feel varying degrees of selfreproach if they commit criminal acts. In addition, they are concerned with their social status in society, based on others' perceptions of their values. In making their decisions, individuals weigh both the material and social risks of being a criminal and a worker. We find that introducing social status concerns may induce multiple equilibria. We also consider the implications of intragroup and intergroup interactions in an economy with two classes of earning abilities. Typically, there is more crime in the low ability group and increasing punishment reduces crime, but the opposite may also be true.
Keywords: asymmetric information, behavioral economy, crime, game theory, social identity
JEL Classification: C72, D82, K42, Z13
Suggested Citation: Suggested Citation
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