How Policing Incentives Affect Crime, Measurement, and Justice

We develop a principal-agent model where a police officer trades off investigating and patrolling in a rich strategic environment where civilians choose between producing and stealing (and also whom to steal from). The equilibrium numbers of criminals and producers, punished or not, are summarized in a truth table of criminal justice. While scholars typically focus on only a few isolated elements — largely determined by field: economic theory, econometric analysis, or legal theory — policing incentives affect all elements of the table. For each field, we provide an insight to (and parametric example of) the major issue with an isolated approach to inform policy. A pragmatic discussion of how to move forward concludes the paper.