CL2: Nudging, Deterrence & Day Fines Flashcards
What are day fines?
Fine system based on the financial capacity of the offender.
Takes into account severity of crime (in days) and proportion of income (financial capacity)
Severity of crime x (Proportion) of daily income
What is the purpose of day fines?
- Eliminate disparities in the punitive process “All offenders treated equally”
- Criminal sentencing should enhance deterrence
- Elimininate disparities in the punitive process
- Expected costs > expected benefits
Why consider the law of diminishing marginal utility of wealth with day fines?
Law of diminishing marginal utility of wealth
We get less satisfaction from each additional unit of wealth that we gain
What are ethical considerations to Day Fines?
- Fairness
Low-income offenders are no longer punished more ‘severely’ - Uniformity
Only variable is severity: all punished the same amount for the same crime - Transperancy
Clear signal to all about punishment based on offense; easy to see uniform nature of fine (or not)
What is the princple of deterrence?
Expected costs > Expected benefits
What is Individual Deterrence
Discouraging an individual from engaging in undesirable behavior by imposing on him/her costs for such behaviour
What is general deterrence?
Discouraging others from engaging in undesirable behavior by imposing on an individual costs for engaging in such behaviour
What are the Costs of Day fines?
- Efficient Breach
When maintaining the ‘contract’ is more costly than the breach of that ‘contract’ - Privacy Consideration
- Cost of information access
- Cost of enforcement and enforcement errors
What are the basic principles of deterrence theory?
- Rationality assumption
- CBA regarding severity of punishment & detection
- Expected punishment
Why do people tend to reject basic principles of deterrence theories?
- Risk neutrality
- Risk seeking
- Risk aversion
- Probability weighting
What is the relation between Deterrence and Risk?
- Individual is deterred from engaging in crime if cost of punishment > benefits of criminal activity
- Risk: probability of an adverse event occuring (risk of punishment)
- Increasing risk of punishment effective in deterring crime
What are the differences between risk averse, risk neutral, risk seeking
- Risk Averse = Preference for certainty
- Risk neutral = Indifference towards certainty in reward or instability (risky) reward
- Risk seeking = Preference for Risky reward
What is probability weighting?
- Tendency to over estimate events that have low probability of occuring
AND Under-estimating events that have a high probability of occuring
- Oversimplifying options - we no longer considers these options.
What are other challenges to deterrence?
- Overconfidence = When level of certainty exceeds frequency or likelihood of occurence
- Mental accounting = outcomes are percieved and evaluated based on context
- People quickly adapt to changes; impact of change is not lasting
- Duration neglect: tendency to remember things based on ending only
What is hedonic adaptation?
It suggests that no matter how positive or negative an event may be, we eventually adapt and revert back to our pre-event emotional state
