Monday, May 10, 2010
This Chapter examines the law and economics of accuracy in criminal sanctions. It suggests that the law’s ability to impose sanctions that are accurate on an individualized level is constrained by three information problems: (1) criminals’ lack of information, ex ante, concerning victim harms; (2) courts’ lack of information, ex post, concerning harms; and (3) courts’ inability to process information concerning harms. As a result of these information problems, the law oftentimes settles for a second-best approach to sanctioning: it imposes sanctions based on the average harm caused by a type of crime (e.g., robbery), as opposed to the actual harm caused by particular episodes of that crime. This approach is second-best because it under-protects certain high-harm victims — ones who suffer greater than average harms — and over-protects low-harm victims — ones who suffer lower-than-average harms. Although we may be stuck with this second-best approach to legal sanctions, the Chapter suggests how society could (and does) correct the under-deterrence problem average sanctions generate: encourage high-harm victims to supplement law’s protection by buying precautions against crime. Crime victims do not face the same information constraints that courts do. In particular, they know more about the potential harms they would suffer from crime than do criminals (ex ante) and courts (ex post). What is more, victims can act upon that information and purchase a level of protection customized to their particular needs, including their idiosyncratic harms. In fact, imposing legal sanctions based on average harms may spur high-harm victims to buy more precautions against crime, arguably moving the combined public/private criminal justice system closer to providing an optimal level of deterrence against inefficient crime.