Law and Economics

our task is to analyze the decision made by a criminal, given the following information: Annual legal earnings = $ 16,000 Value of property stolen = $7,000 Probability of arrest (see below) Probability of conviction and incarceration = 85% Length of sentence = 4 years (no parole) If arrested but not convicted, can keep the stolen property. Look up the clearance rate for your assigned property crime (see below) on the www.fbi.gov website. Use the 2018 national data for clearance rates. Last name begins with the letter: use data for: A through G robbery H through O burglary P through Z larceny theft 1 . Find the expected value of committing the crime. 2. (a) Is this a good bet, a bad, bet, or a fair bet? (b) Does the potential offender prefer risk, avoid risk, or is he risk neutral? (a) (b ) 3. Which would work more effectively in deterring his thievery, increasing the probability of going to jail or increasing the length of the jail sentence