Microeconomics Seminar with Nicola Persico (Northwestern Kellogg)

Abstract: This paper develops an incentives-based theory of policing that can explain the phenomenon of random “crackdowns,” which are intermittent periods of high interdiction/surveillance. We show that, when police minimize the crime rate, random crackdowns can emerge as part of an optimal policing strategy. We develop several variations of the basic policing model that would apply in different monitoring situations, such as speeding, drug interdiction, or screening to deter terrorism. For a variety of police objective functions, random crackdowns can be part of the optimal monitoring strategy. We demonstrate support for implications of the crackdown theory using traffic data gathered by the Belgian Police Department and use the model to estimate the deterrence effect of additional resources spent on speeding interdiction.

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