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. Which of the below is correct? A. There are no efficiency gains to punishing repeat offenders and first time offenders differently. B. First time offenders should be punished more severely than repeat offenders to obtain the optimal result. C. Repeat offenders should be punished more severely than first time offenders to obtain the optimal result. D. None of the above
QUESTION 44
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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.
Which of the below is correct?
A. There are no efficiency gains to punishing repeat offenders and first time offenders differently.
B. First time offenders should be punished more severely than repeat offenders to obtain the optimal result.
C. Repeat offenders should be punished more severely than first time offenders to obtain the optimal result.
D. None of the above
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