Review of Behavioral Economics > Vol 2 > Issue 4

Who is Afraid of the Stick? Experimentally Testing the Deterrent Effect of Sanction Certainty

Christoph Engel, Max Planck Institute, Bonn, Germany, engel@coll.mpg.de Daniel Nagin, Teresa and H. John Heinz III University Professor of Public Policy and Statistics, Heinz College, Carnegie Mellon University, USA, dn03@andrew.cmu.edu
 
Suggested Citation
Christoph Engel and Daniel Nagin (2015), "Who is Afraid of the Stick? Experimentally Testing the Deterrent Effect of Sanction Certainty", Review of Behavioral Economics: Vol. 2: No. 4, pp 405-434. http://dx.doi.org/10.1561/105.00000037

Published: 30 Dec 2015
© 2015 C. Engel and D. Nagin
 
Subjects
 
Keywords
C91D03D81K14K42
CrimeCertaintly and severity of sanctionRisk preferenceExperiment
 

Article Help

Share

Download article
In this article:
1. Introduction
2. Related Litertaure
3. Hypotheses
4. Design
5. Results
6. Discussion and Conclusion
A.1. Instructions
References

Abstract

The empirical literature on deterrence tends to find stronger and more consistent evidence in support of the deterrent effect of the certainty than for the severity of punishment. Three distinct explanations have been advanced: (1) risk preferences of potential criminals, (2) the present orientation of potential criminals, and (3) stigma. We report an experiment that rules out the second and third explanations by design, and that provides a direct test of the first explanation. We find that risk averse participants are more deterred by severity, as predicted by theory. Yet risk seeking participants are not more deterred by certainty if the offense has a positive expected value, or if its expected value is zero. The theory is only supported if the sanction is so severe and frequent that committing the offense has a negative expected value.

DOI:10.1561/105.00000037