The economics of crime and punishment postulates that higherpunishment leads to lower crime levels, or less severe crime. It ishowever hard to get empirical support for this intuitive relationship.This paper offers a model that contributes to explain why this is thecase. We show that if criminals can spend resources to reduce theprobability of being detected, then a higher general punishment levelcan increase the crime level. In the context of antitrust enforcement, itis shown that competition authorities who attempt to ght cartels bymeans of tougher sanctions for all offenders may actually lead cartelsto increase their overcharge when leniency programs are in place.
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