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Optimal deterrence with legal defense expenditure

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JournalEconomic Inquiry
DatePublished - Jul 2002
Issue number3
Number of pages14
Pages (from-to)366-379
Original languageEnglish


Legal defense expenditure by, honest and dishonest accused can increase or reduce the amount of crime, and deterrence can decrease when punishment is increased. Unregulated expenditure of innocent and guilty defendants is inefficient whether or not there is a direct social harm from ope I and 11 errors. The circumstances in which the optimal fine bankrupts convicted dishonest or honest defendants, regulation to limit defense expenditure and a tax-financed public defender system are also investigated.

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