PrepTest 64, Section 4, Question 3
Determining the most effective way to deter deliberate crimes, such as fraud, as opposed to impulsive crimes, such as crimes of passion, is a problem currently being debated in the legal community. On one side of the debate are those scholars who believe that deliberate crimes are a product of the influence of societal norms and institutions on individuals. These scholars suggest that changing people's beliefs about crime, increasing the access of the most economically alienated individuals to economic institutions, and rehabilitating those convicted of this type of crime will reduce the crime rate. On the other side are those legal scholars who believe that the decision to commit a deliberate crime is primarily the result of individual choice. They suggest that increasing the fines and penalties associated with criminal activity, along with efficacious law enforcement, is the best deterrence method. However, some recent legal scholarship has changed the nature of this debate by introducing an economic principle that shows that these two positions, far from being antithetical, are surprisingly complementary.
The economic principle that reconciles the two positions is that of utility maximization, which holds that, given a choice of actions, rational individuals will choose the action that maximizes their anticipated overall satisfaction, or expected utility. The expected utility of an action is ascertained by determining the utilities of the possible outcomes of that action, weighing them according to the likelihood of each outcome's coming to pass, and then adding up those weighted utilities. Using this economic framework, an individual's decision to commit a crime can be analyzed as a rational economic choice.
According to the utility maximization principle a person who responds rationally to economic incentives or disincentives will commit a crime if the expected utility from doing so, given the chance of getting caught, exceeds the expected utility from activity that is lawful. Within this framework the two crime-deterrence methods have the same overall effect. For instance, the recommendations on one side of the crime deterrence debate to increase penalties for crimes and strengthen law enforcement result in an increased likelihood of detection and punishment and impose an increased cost to the individual if detected and punished. This lowers the expected utility from criminal activity, thereby making a person less likely to choose to commit a deliberate crime. The recommendations on the other side of the debate, such as increasing the economic opportunities of individuals most alienated from economic institutions, also affect the utility equation. All else being equal, enacting these types of policies will effectively increase the expected utility from lawful activity. This economic analysis demonstrates that the two positions are not fundamentally in conflict, and that the optimal approach to crime deterrence would include elements of both deterrence strategies.
Determining the most effective way to deter deliberate crimes, such as fraud, as opposed to impulsive crimes, such as crimes of passion, is a problem currently being debated in the legal community. On one side of the debate are those scholars who believe that deliberate crimes are a product of the influence of societal norms and institutions on individuals. These scholars suggest that changing people's beliefs about crime, increasing the access of the most economically alienated individuals to economic institutions, and rehabilitating those convicted of this type of crime will reduce the crime rate. On the other side are those legal scholars who believe that the decision to commit a deliberate crime is primarily the result of individual choice. They suggest that increasing the fines and penalties associated with criminal activity, along with efficacious law enforcement, is the best deterrence method. However, some recent legal scholarship has changed the nature of this debate by introducing an economic principle that shows that these two positions, far from being antithetical, are surprisingly complementary.
The economic principle that reconciles the two positions is that of utility maximization, which holds that, given a choice of actions, rational individuals will choose the action that maximizes their anticipated overall satisfaction, or expected utility. The expected utility of an action is ascertained by determining the utilities of the possible outcomes of that action, weighing them according to the likelihood of each outcome's coming to pass, and then adding up those weighted utilities. Using this economic framework, an individual's decision to commit a crime can be analyzed as a rational economic choice.
According to the utility maximization principle a person who responds rationally to economic incentives or disincentives will commit a crime if the expected utility from doing so, given the chance of getting caught, exceeds the expected utility from activity that is lawful. Within this framework the two crime-deterrence methods have the same overall effect. For instance, the recommendations on one side of the crime deterrence debate to increase penalties for crimes and strengthen law enforcement result in an increased likelihood of detection and punishment and impose an increased cost to the individual if detected and punished. This lowers the expected utility from criminal activity, thereby making a person less likely to choose to commit a deliberate crime. The recommendations on the other side of the debate, such as increasing the economic opportunities of individuals most alienated from economic institutions, also affect the utility equation. All else being equal, enacting these types of policies will effectively increase the expected utility from lawful activity. This economic analysis demonstrates that the two positions are not fundamentally in conflict, and that the optimal approach to crime deterrence would include elements of both deterrence strategies.
Determining the most effective way to deter deliberate crimes, such as fraud, as opposed to impulsive crimes, such as crimes of passion, is a problem currently being debated in the legal community. On one side of the debate are those scholars who believe that deliberate crimes are a product of the influence of societal norms and institutions on individuals. These scholars suggest that changing people's beliefs about crime, increasing the access of the most economically alienated individuals to economic institutions, and rehabilitating those convicted of this type of crime will reduce the crime rate. On the other side are those legal scholars who believe that the decision to commit a deliberate crime is primarily the result of individual choice. They suggest that increasing the fines and penalties associated with criminal activity, along with efficacious law enforcement, is the best deterrence method. However, some recent legal scholarship has changed the nature of this debate by introducing an economic principle that shows that these two positions, far from being antithetical, are surprisingly complementary.
The economic principle that reconciles the two positions is that of utility maximization, which holds that, given a choice of actions, rational individuals will choose the action that maximizes their anticipated overall satisfaction, or expected utility. The expected utility of an action is ascertained by determining the utilities of the possible outcomes of that action, weighing them according to the likelihood of each outcome's coming to pass, and then adding up those weighted utilities. Using this economic framework, an individual's decision to commit a crime can be analyzed as a rational economic choice.
According to the utility maximization principle a person who responds rationally to economic incentives or disincentives will commit a crime if the expected utility from doing so, given the chance of getting caught, exceeds the expected utility from activity that is lawful. Within this framework the two crime-deterrence methods have the same overall effect. For instance, the recommendations on one side of the crime deterrence debate to increase penalties for crimes and strengthen law enforcement result in an increased likelihood of detection and punishment and impose an increased cost to the individual if detected and punished. This lowers the expected utility from criminal activity, thereby making a person less likely to choose to commit a deliberate crime. The recommendations on the other side of the debate, such as increasing the economic opportunities of individuals most alienated from economic institutions, also affect the utility equation. All else being equal, enacting these types of policies will effectively increase the expected utility from lawful activity. This economic analysis demonstrates that the two positions are not fundamentally in conflict, and that the optimal approach to crime deterrence would include elements of both deterrence strategies.
Determining the most effective way to deter deliberate crimes, such as fraud, as opposed to impulsive crimes, such as crimes of passion, is a problem currently being debated in the legal community. On one side of the debate are those scholars who believe that deliberate crimes are a product of the influence of societal norms and institutions on individuals. These scholars suggest that changing people's beliefs about crime, increasing the access of the most economically alienated individuals to economic institutions, and rehabilitating those convicted of this type of crime will reduce the crime rate. On the other side are those legal scholars who believe that the decision to commit a deliberate crime is primarily the result of individual choice. They suggest that increasing the fines and penalties associated with criminal activity, along with efficacious law enforcement, is the best deterrence method. However, some recent legal scholarship has changed the nature of this debate by introducing an economic principle that shows that these two positions, far from being antithetical, are surprisingly complementary.
The economic principle that reconciles the two positions is that of utility maximization, which holds that, given a choice of actions, rational individuals will choose the action that maximizes their anticipated overall satisfaction, or expected utility. The expected utility of an action is ascertained by determining the utilities of the possible outcomes of that action, weighing them according to the likelihood of each outcome's coming to pass, and then adding up those weighted utilities. Using this economic framework, an individual's decision to commit a crime can be analyzed as a rational economic choice.
According to the utility maximization principle a person who responds rationally to economic incentives or disincentives will commit a crime if the expected utility from doing so, given the chance of getting caught, exceeds the expected utility from activity that is lawful. Within this framework the two crime-deterrence methods have the same overall effect. For instance, the recommendations on one side of the crime deterrence debate to increase penalties for crimes and strengthen law enforcement result in an increased likelihood of detection and punishment and impose an increased cost to the individual if detected and punished. This lowers the expected utility from criminal activity, thereby making a person less likely to choose to commit a deliberate crime. The recommendations on the other side of the debate, such as increasing the economic opportunities of individuals most alienated from economic institutions, also affect the utility equation. All else being equal, enacting these types of policies will effectively increase the expected utility from lawful activity. This economic analysis demonstrates that the two positions are not fundamentally in conflict, and that the optimal approach to crime deterrence would include elements of both deterrence strategies.
The explanation of the utility maximization principle in the passage suggests that which one of the following would be least appropriately described as a rational response to economic incentives and disincentives?
In order to reduce his taxes, a waiter conceals a large part of his tip income from the government because he believes that it is very unlikely that this will be detected and he will be penalized.
A motorist avoids speeding on a certain stretch of road because she knows that it is heavily patrolled and that a speeding ticket will lead to loss of her driver's license.
An industrialist continues to illegally discharge an untreated pollutant into a river because the cost of treatment far exceeds the fine for illegally discharging the pollutant.
A government official in an impoverished country risks prosecution for soliciting bribes because rampant inflation has rendered her government salary inadequate to support her and her family.
A worker physically assaults his former supervisor in a crowded workplace because he has been dismissed from his job and he believes that the dismissal was unwarranted and unfair.
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