Optimal Law Enforcement with Dissemination of Information

In this paper we discuss the implications of introducing imperfect information on the optimal law enforcement literature. We assume that individuals can be imperfectly informed about the probability of apprehension and about the sanction.Imperfect information about the probability and the sanction might pose a problem to criminal deterrence. If that is the case, there are clear incentives to disseminate information about law enforcement (probability and severity of sanction). However, note that individuals also have incentives to buy information about law enforcement: they may erroneously decide to become criminals (because they have underestimated the expected sanction) or they may erroneously decide not to become criminals (because they have overestimated the expected sanction).This paper proposed that it is optimal to complement criminal punishment with some disclosure of information.