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IF WE CONFESS OUR SINS
Author(s) -
Silva Francisco
Publication year - 2019
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12390
Subject(s) - confession (law) , innocence , punishment (psychology) , mechanism (biology) , social planner , externality , power (physics) , planner , economics , microeconomics , social psychology , mathematical economics , psychology , computer science , law , political science , epistemology , philosophy , physics , quantum mechanics , programming language
I consider a scenario where a social planner suspects that a crime has been committed. There are many suspects and at most one of them is guilty. I characterize the optimal mechanism for the social planner under different assumptions with respect to her commitment power. I find that the optimal mechanism is a “confession inducing mechanism”: Before an investigation, each agent can confess to being guilty in exchange for a reduced punishment. I find that these mechanisms do better than the traditional trial mechanism because of information externalities: When an agent credibly confesses his guilt, he reveals everyone else's innocence.