Ballester, C., A. Calvó-Armengol and Y. Zenou
Journal of the European Economic Association – 8.1 (2010): 34-61.
Keywords: Delinquency,networks,complementarities,criminal,key player,key group,complexity,outside option,bonacich,katz,centrality
Abstract: Delinquents are embedded in a network of relationships. Each delinquent decides in a non-cooperative way how much delinquency effort he will exert. We characterize the Nash equilibrium and derive an optimal enforcement policy, called the key-player policy. We then extend our characterization of optimal single player network removal to optimal group removal, the key group. We also characterize and derive a policy that targets links rather than players. Finally, we endogenize the network connecting delinquents by allowing players to join the labor market instead of committing delinquent offenses. The key-player policy turns out to be much more complex because it depends on wages and on the structure of the network.