[FoRK] Formula for breaking the law

[James Tauber]

This reminds me of that story I heard last year that in some parts of  
India you can buy (black market) insurance against the fine for riding  
on the train without a ticket.

It works because the ticket price to fine ratio is more than the  
chance of getting caught.

James



On May 5, 2008, at 9:42 PM, Jeff Bone wrote:

> 	
> My earlier formulation was both imprecise and incorrect.  Here's a  
> second attempt:
>
>    L ~= B / eC + c
>
>  L is likelihood of any given person breaking a particular law
>  B is the benefit *to that person* (in economic terms) of breaking  
> the law
>  e is the likelihood of that person getting caught (enforcement)
>  C is the cost to that person (in economic terms) if caught
>  c is the cost to that person for breaking the law, independent of  
> any enforcement
>
> I.e., the likelihood of any person breaking any given law is  
> proportional to the ratio between the benefit of breaking the law  
> and all the probable costs.  Note that B, C, and c are all relative  
> to the individual in question's own value system;  you can map each  
> of those into economic terms, but mapping those values across people  
> might be difficult without some market mechanism...  (hmm...)
>
> Luis speculates that some people may place value on obeying laws for  
> their own sake;  well, whatever, that goes into c.  I would argue,  
> though, that there's obviously not some very significant near- 
> universal value placed on obeying laws for their own sake, otherwise  
> everyone would always drive the speed limit --- which, clearly,  
> almost nobody does all the time.  Different people, obviously,  
> assign different values to these variables.
>
> I will further speculate that the incidence of law-breaking overall  
> for some law and some population is proportional to, if not exactly  
> equivalent to (which might be possible if you have some kind of  
> normalization of the values of the variables across people, but  
> Arrow's Paradox suggests that might not be possible) the sum of the  
> values of L for each person for their own specific values for the  
> variables in that equation divided by the size of the population.
>
> Not going to bother with the formula for that, though. ;-)  Will  
> leave that to a Real Economist. (tm)
>
> $0.02,
>
> jb
>
> PS - for a less Saturday Morning treatment of same, consult an  
> economist.  Perhaps David Friedman:
>
>  http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_20/PThy_Chapter_20.html
>
>
>
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