Optimal leniency and the organization design of group crime

摘要

Westudy a simple law-enforcementmodelwhere the organizational structure of a criminal group is endogenous and determined jointly with the amnesty granted to whistleblowers. We allow criminals to choose between a horizontal (partnership) and a vertical (hierarchical) organization structure, andwe study howthis choice affects the optimal leniency granted by a benevolent Legislator whose aim is to minimize crime. We show that the optimal amnestywith an endogenous organizational choice is less lenient than that grantedwhen the policy targets vertical organizations only. In the equilibrium, partnerships coexist with vertical organizations. (c) 2020 Elsevier B.V. All rights reserved.